The State’s start-up ecosystem has its fare share of detractors.
They argue how majority of start-ups are destined to perish owing to inherent risks and incompetence of people without experience and bright ideas. Only a handful of start-ups survive, and still fewer flourish!
Binu Jacob, secretary of GTech (Group of Technology Companies), says there is no point focussing on quantity and bragging about the number of start-ups, which seems to be the case in Kerala, since quality is more key to creating employment and ensuring success.
“So, the State government should set aside 10% of its tax share from the IT industry, which stands at around ₹1,200 crore, for investing in different baskets, including start-ups, to give a push to this sector which holds the highest potential for Kerala. Also, the funding for start-ups should be based on the validation by professional private equity or venture capital funds so as to guarantee a higher success rate,” he says.
Mr. Jacob says that State’s obsession with product start-ups, ignoring service-based start-ups, is also flawed. He was also scathing about what he termed a flawed rental policy that facilitates indiscriminate rise of 5% in rent annually without considering market realities.
While cities such as Chennai and Hyderabad are attracting investors with potential freebies, the unilateral rise in rent sometimes make the space costlier than even those cities with far better infrastructure and favourable conditions, he says.
Joseph C. Mathew, IT advisor to V.S. Achuthanandan when he was Chief Minister, wonders why the State had not thrown up a defining company in the IT sector over the years.
“Nurturing Information and Communication Technology entrepreneurs should begin at the level of high school, if not earlier. This also calls for a better curriculum and will make our classrooms more interactive. It is critical for an entrepreneur to have a domain perspective and indiscriminate diversion of people without that perspective to entrepreneurship will only amount to ruining their career,” he says.
Mr. Mathew also stresses the need for the government to allocate more work for the survival of start-ups and called for a screening mechanism, including verification of shareholders of individual start-up firms, to ensure that work meant for start-ups isn’t usurped by budding firms of established companies.
