An Assessment of Competitiveness of Technology‑Based Startups in India

International Journal of Global Business and Competitiveness

Technology-based entrepreneurship has emerged as one of the credible instruments of job creation, innovation and wealth creation across the world. India is no exception to this trend, and has emerged as the third-largest startup ecosystem in the world in terms of the number of startups.  However, there is one major challenge – that failure rate among the technology-based startups is very high, and most technology-based startups do not see the light of the day beyond the first couple of years of operations. Very little is known about how few startups are able to address the challenges in their initial years and grow in the Indian context. This study aimed to fill this gap. It examines the role played by the entrepreneurial, firm-specific and external environment-related parameters in impacting the competitiveness of Indian high-tech startups, considering startup survival as a milestone and using survival analysis techniques for the analysis.

The results of the study reveal that startups that possessed strong sales and R&D capabilities during the initial years of operation are able to overcome the challenges and enhance their competitiveness. For practitioners, there are some important takeaways from this study. The results of this study indicate that a lean sales team with the founders or co-founders taking on the role of sales enablement would enhance the chances of startup survival in the early years of operations. From the study, it is found that a healthy regional economy at the state level enabled the survival of the startups.  From a macro-economic perspective, startup survival probability increases in regions where there is good economic growth—implying that presence of an addressable market is very important for ensuring technology-based startup competitiveness.