Startups: Igniting Dreams for Crafting a Better Tomorrow in Tier II & III Cities

3.Abundance of Cost-effective Talent pool: In the smaller towns of the country, the opportunities are very less, but it could not affect the young talents from knowing more and developing their skills. As, these Tier II, III, & IV cities are out of the limelight of the prominent business tycoons, job opportunities are lesser than the metro cities of India.

The startups are utilizing the efficiency of these talented pools of people and turning them into talented workforce of their companies. As the cost of living is not that high in these cities, the entrepreneurs are getting cheaper workforce for their organization, which is immensely impossible in metro cities like Mumbai or Delhi.

4.Lower Setup & Operational Cost: Startups is not just about talents and skills, it is much more than that. Kick-starting a business needs a large pool of money to be invested to set-up a business from grassroot level. In the maximum cases, initially the startups don’t have investors with them, so they prefer the cost-effective options for setting-up their companies. In comparison to metro cities, the Tier II & III cities offer cheaper lands, machineries, and other overhead costs to maintain a business organization.

Umesh Uttamchandani, Co-Founder & Chief Growth Officer, DevX Venture Fund mentioned, “We have seen startups relocating to smaller cities due to lower costs of living, increased internet penetration, and the availability of semi-skilled talent”.

A recent report of Deloitte & NASSCOM, which is regarded as ‘Emerging technology hubs of India’ the number of tech talents in Tier II & III stood at 11-15%, which is expected to grow after the widespread remote work trend. It also added that, the smaller town of India is contributing 60% of India’s graduates who are offering competitive advantages for the companies.

Government Policies & Initiatives for Startups

Startup is the driving factor for the economy of a developing country like India. Indian Government is empowering the young talents and encouraging the entrepreneurs for ushering economic growth and boosting the employment in the country. The honorable Prime Minister of India, Narendra Modi has started Startup India Initiative in 2016.

Under this organization, the government has invested Rs. 945 crore in Startup India Seed fund Scheme in 2021. Added, 10,000 crore in ‘fund of funds’ for growing the domestic venture capital industry. The government launched Digital India Startup Hub programme and established a Digital India Investment Fund to Fund companies for the young startups for mentoring and guiding the startups in a well-defined path, the government has started Atal Incubation Centres (AIC). This incubator is offering young entrepreneurs from low-tier cities a vibrant ecosystem with veteran mentors, IP support, investor and market connect, learning and development programmes, amongst many others.