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Editorial of the Day: Startup20 and the Potential for Change

Exam View: Startups in India, Benefits of start-up, Challenges faced by startups, Government initiative for supporting start-up, Startup20 and G-20.

In News: As India assumes its G20 presidency, it has introduced Startup20, an engagement group that has the potential to revolutionize the G20.

More on Startup20 and the Potential for Change

  • Startups are essential for driving economic growth and innovation. They are critical for achieving the Sustainable Development Goals (SDGs).
  • India, home to 107 unicorns with a combined valuation of $340.79 billion in 2022, exemplifies this success through their adaptability and flexibility in the face of changing market conditions.
  • India has become the 3rd largest start-up ecosystem in the world after the US and China.
  • Need for Startup20: By collaborating through the Startup20 Engagement Group, member country startups can identify and address key issues in developing innovative products or services that address social and environmental challenges, collaborating with local communities and organisations to address issues such as poverty, inequality, and climate change, and leveraging their unique skills and resources to drive positive change.
    • Startup20 can play a crucial role in advancing the SDGs and creating a more sustainable and equitable future.

Benefits of Startup20

  • Provide a common platform: Startup20 can provide a common platform for the development of actionable guidance to the G20 countries on a range of issues, like simplifying regulatory processes, streamlining application processes, and navigating complex rules and regulations.
  • Addressing the distinctive challenges: It can also play a role in addressing the distinctive challenges faced by startups operating in an international context. For example, startups may face additional regulatory hurdles when entering new markets, such as differences in legal frameworks, cultural norms, and business practices.
  • Facilitating collaboration: The group will serve as a global point of contact, facilitating collaboration and the exchange of knowledge between top startups and established companies, and governments from G20 countries.
  • Provide easy navigation: This will help provide startups with easy navigation of issues such as cross-border regulatory compliance, access to funding and capital, and navigating cultural differences.
  • Better Cooperation among G20 countries: It will foster greater cooperation among G20 countries to develop such platforms to promote a more inclusive start up ecosystem globally.
  • Bridge the gap between the developed and developing world: By bringing together startups from both developed and developing countries, Startup20 can facilitate the transfer of knowledge, technology, and resources, helping to level the playing field and accelerate progress in the developing world.
  • Address some of the political challenges: It will also help address some of the political challenges faced by developing countries. For example, many developing countries struggle with weak institutions and lack of transparency.

Challenges faced by Start-up Ecosystem in India

  • Lack of formalised funding: For running a start-up, a significant amount of working capital is required. Many start-ups in India, especially at early stages, are bootstrapped, i.e., self-funded through the founders’ own savings, since domestic financing is limited.
  • Strict Regulatory Environment: The laws and regulations are not always tailored to the needs of startups, which can make it difficult for them to comply. The complex compliance and legal requirements that startups have to adhere to can be a hindrance to their growth.
  • Lack of proper infrastructure and logistics: The inadequate transportation, warehousing and logistics infrastructure can make it difficult for startups to reach customers and deliver their products on time. This can be a major hindrance to their growth and success.
  • Poor revenue generation: Several startups fail due to poor revenue generation as the business grows. As the operations increase, expenses grow with reduced revenues forcing startups to concentrate on the funding aspect, thus, diluting the focus on the fundamentals of business.
  • Lack of Mentorship and Guidance: Startups frequently don’t have access to mentors with relevant experience, which can make it challenging for them to understand the business environment and make wise decisions.

Government Measures to Promote the Startups

  • Start-up India Seed Fund Scheme (SISFS): It provides financial support for designing prototypes, testing goods, and launching their businesses.
  • Start-up Awards: This program recognizes and rewards outstanding start-ups and ecosystem enablers contributing to economic dynamism by stimulating innovation and competition.
  • National Initiative for Developing and Harnessing Innovations (NIDHI): NIDHI is an end-to-end plan for start-ups to double the number of incubators and start-ups in the duration of five years.
  • Shanghai Cooperation Organisation (SCO) Start-up Forum: Established in October 2020 as a means of developing and improving start-up ecosystems in SCO member states.
  • Women Entrepreneurship Platform (WEP): The WEP provides support to women entrepreneurs, including access to finance, mentorship, and networking opportunities.
Government Measures to Promote the Startups
Government Measures to Promote the Startups

Way Forward

  • Simplify regulatory processes: To address these challenges and support the growth of startups, it is important to simplify regulatory processes, promote entrepreneurship education and training, and provide infrastructure and support services that make it easier for startups to do business.
  • Creating funding mechanisms: Policy makers have a crucial role to play in addressing this issue by creating funding mechanisms and incentives that promote the growth and success of startups.
  • Investing in Infrastructure and Logistics: The government should invest in infrastructure and logistics, to improve the delivery of products and services.
  • Encouraging Innovation: This can include setting up R&D centres, providing tax incentives for companies that invest in R&D, and connecting startups with universities and research institutions.
  • Collaboration: By bringing together startups and policymakers from the developed and developing world, Startup20 can help promote good governance and the rule of law, leading to more stable and prosperous societies.


  • The Startup20 Engagement Group has the potential to make a lasting impact on the global economy; drive economic growth, stability, and innovation while making a positive impact on the global political landscape; and to be a game-changer in empowering global progress.
  • This is especially relevant during India’s G20 presidency, as the theme of “One earth, one family, one future” emphasises that the success of one country or region will have a butterfly effect on the rest of the world.

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