India continues to face “some immense infrastructure problems” affecting entrepreneurs and startups such as “internet speed is low compared to most other countries, and power outages are frequent."
Even as India continues to improve its annual Ease of Doing Business ranking, its startup ecosystem appears to be losing steam. According to the global innovation mapping and research company StartupBlink, which gathers local data of every country to rank their startup ecosystem based on the quality of startups, business environment coupled with the quantity, India has moved down from 17th position in 2019 to 23rd this year out of 100 countries. The third-largest ecosystem – India, in terms of number of technology startups, has been ranked even behind emerging ecosystems such as Estonia, Lithuania, Brazil, Denmark etc. The ranking has been led by the US, the UK, and Israel while China has improved its rank by 13 spots to 14th position this year and Japan stood at 21st spot.
Moreover, among the top 100 startup cities, only four India cities were captured. Bengaluru (down by three ranks to 14th position), New Delhi (up by three spots to 15th position), Mumbai (improved by seven spots to 22nd position), and Hyderabad (falling 21 ranks to disappointing 96th position). Last year, seven cities were ranked in the top 100 list versus four this year. “This year has shown that the leap the Indian ecosystem had registered in our 2019 rankings was a bit premature,” the report titled StartupBlink Ecosystem Rankings Report said.
India continues to face “some immense infrastructure problems” affecting entrepreneurs and startups such as “internet speed is low compared to most other countries, and power outages are frequent.” The report said urging the government to improve the infrastructure as “other countries in the region are growing fast.” Nonetheless, India enjoys a relatively better ranking vis-à-vis other countries in the Asia-Pacific region such as New Zealand (47), Indonesia (54), Thailand (50), Vietnam (59). Others like Bangladesh, Sri Lanka, Nepal and Pakistan were placed at 98, 99, 100, and 82.
StartupBlink measures ecosystems based on the number of startups, their quality and business environment. The ranking is based on data from over 60,000 startups, over 14,000 coworking spaces, 100 global influencers based in multiple cities. “A city where a Bill Gates or Elon Musk resides creates an allure that attracts more entrepreneurs and investors to the ecosystem.” Information partners such as Crunchbase, SEMrush etc. and government corporations globally also contribute to the ranking system. The ranking is carried out on the basis the impact startups have been able to make in the country, how many startups and support organisations are there such as accelerators, coworking spaces, startup events along with technology infrastructure, red tape, bureaucracy, etc.
The report comes amid the Covid times when startups have been reeling under the pandemic impact due to poor demand, supply chain disruption and squeezed inflow of funding from investors. In fact, a Nasscom survey in April suggested that around 40 per cent of startups are about to shut down or have already halted their operations temporarily this year. Moreover, 70 per cent claimed that their survival is at stake with less than three months of runway left while revenues have declined for 90 per cent of over 250 startups surveyed.