How State and Central Government Bodies are Supporting Startup Innovation?

Mainstream economists, corporate innovation influencers and various think tanks across the world want minimal government intervention in the domain of innovation. The way a bureaucratic system works across the world does not inspire their confidence. However, the reality is different where the government is a primary stakeholder in sparking innovation across domains. Be it creating innovation infrastructure or promoting a culture of a fail-fast attitude, it will encourage businesses and individuals to innovate constantly.   

Israel, USA, Germany and other nations are acting as strategic investors in various innovative projects related to defence, public good, communication, health, etc. Additionally, government agencies invest in sectors like space-tech due to high failure rates. These investments have given a chance to a new breed of entrepreneurs to work in these domains and create a sustainable impact. Silicon Valley, Nokia, Huawei were possible due to the primary intervention of respective governments in their early years of setup. Currently, these institutions have created ecosystems and are disrupting the domain at a fast pace.

Dennis Patrick Leyden and Albert N Link authored a book ‘Public Sector Entrepreneurship, U.S. Technology and Innovation Policy, on the government’s role in the innovation ecosystem, where they have examined the causal effects of governmental action on various innovation-related activities.  In my opinion, the role of any government is twofold:

  • Doing things innovatively
  • Building and supporting the innovation ecosystem

In India, various state governments have embarked on initiatives, plans and programs to kick-start innovation in their states, which itself is commendable. A few of them that stand out are—Kerala’s Startup Mission, Telangana’s T-Hub and Haryana government’s Startup Haryana run by Hartron.

State governments today are conducting programs at the grassroots level, to energise the spirit of creating new enterprises and being a ‘job creator.’ Today, governments are actively creating incubators as a fertile ground to pump-prime this segment with ideas, converting them into commercial enterprises, thus not only contributing to the economic hustle and bustle but also becoming job creators. They serve as the nodal agency or institute for everything—interacting with central government initiatives and startup schemes, acting as information hubs for various state and central-level incentives, providing opportunities for international meets, seminars, pitch competitions, soft landing programs, etc. These provide an unparalleled opportunity to take one’s startup global, talk to a larger audience and get access to potential global customers and funds.

Startup India and Invest India are probably two key central government-backed agencies,  which provide guidance to leapfrog startup innovation and entrepreneurship in the country. It is significant, given the enthusiasm among entrepreneurs to start their own initiatives, mirroring what has been happening in other places around the world. These central agencies also serve as good coordination points for various regulatory items, schemes and grants. They act as nodal points for national and international startup competitions, and as agencies for various startup delegations. Apart from Startup India (Ministry of Commerce and Industry), Invest India (Department of Industrial Promotion Policy), Atal Innovation Mission (Niti Aayog), MEITY’s  MSH (Meity Startup Hub – Ministry for Electronics and IT) are some of the key central government initiatives, which are catalysing the innovation ecosystem in the country.In today’s globally competitive environment, continued technological advancements are critical to sustaining economic prosperity. I am a firm believer that inadequate investment can prove particularly costly in innovation. The government has a critical role in ensuring that society’s general interest in innovation, and the public good associated with innovation, is represented in private-sector decision making. It can be accomplished through a variety of programs and initiatives that reward innovation at all levels.

– Rama Iyer, Chief Innovation Officer, T-Hub

NOTE: The article was originally published in Entrepreneur India on October 29, 2020, with the title “How State And Central Government Bodies Are Supporting Startup Innovation“.