Tamil Nadu ranks among top start-up destinations in India: KPMG-CII report
Chennai, 27 September 2016: Today, business transformations are driven by digital advancements, introducing disruptive products and services, thereby enhancing customer experiences while keeping technology at the centre of the business. According to the KPMG-CII report titled ‘Building the Digital State: Fostering the Ecosystem’ launched today at the CII CONNECT 2016, India has witnessed a significant growth in the number of start-ups over the past few years, especially in the technology, e-commerce, consumer services, and the hyper-local services spaces.
The report brings to light the digital transformation the world is witnessing. It deep dives into Tamil Nadu’s strengths and capabilities in the information technology and start-up ecosystem along with how new competencies are being seeded and built to scale in creating a supply chain which would be both bold and innovative.
Tamil Nadu is increasingly focusing on fostering the startup ecosystem in India. The state ranks among the top start-up destinations in India and the state government along with industry associations is planning to encourage investments in the state. The government is also encouraging entrepreneurs to come up with innovative solutions for common problems.
KK Raman, Partner and Head, Business Excellence, KPMG in India, says,“Today’s consumer is technology driven with over 402 million internet users. The Indian economy is shifting to being mobile driven with existing 220 million smartphone users. This rise in mobile usage has facilitated e-commerce sales of approximately USD 12 billion. The Indian start-up ecosystem has been climbing the evolution curve in the last few years, and with the number of start-ups crossing 4,200 last year, India has emerged as one of the fastest growing countries for start-ups worldwide. This is a huge advantage for us and the state governments take this forward by forming associations that bring together investors, budding start-ups, industrialists, andorganisations and make ‘promotingentrepreneurial culture in the state’ their key purpose.”
Major IT companies in Tamil Nadu have declared expenditure of INR 10,950 crores in the state, over a period of time resulting in over two lakh job opportunities. The planned investments would be to set up IT parks, research parks, development centers, etc. The state has also received an FDI inflow of USD17.8 billion for the period 2000-2015 (USD6.8 billion from April 2000 to March 2011 and USD11 billion from April 2011 to April 2015). The state ranks third in IT/ITeS sector investment, accounting for about 11 per cent of the total industry.
A substantial growth has been witnessed in the number of computer software and electronic goods exported from Tamil Nadu. The number grew by 18 per cent from USD 8, 870 million in 2011-12 to USD 12,380 million in 2013-14.
As the third largest manufacturer of electronic hardware in India, there has been a significant increase in the contribution of Tamil Nadu to the national electronic hardware output. The number has shot up from 10 per cent in 2008-09 to 18 per cent in 2012-13. Tamil Nadu has over 233 Electronic Hardware Technological Parks (EHTPs) located in major IT centric Special Economic Zones (SEZs) of Sriperumbudur, Oragadam, and Mahindra World City.
The report identifies Chennai as a fast emerging Software-as-a-Service (SaaS) hub of India. Leading SaaS companies founded in Chennai, have been in direct competition with some of the global pure-play and traditional SaaS providers. The companies in Chennai that operate in the SaaS space and have recently received venture funding are mainly into billing platform, customer support, social media brand intelligence and product database.
Chennai has also emerged as a hub for start-ups and is building an ecosystem of its own. Chennai has also emerged as a hub for start-ups and is building an ecosystem of its own. In a bid to encourage innovative start-ups, the state government should focus on creating an entrepreneurial ecosystem, support in skill development, design low-cost credit schemes for start-ups, expand funding options and simplify regulations during the initial years of operations. It may also be helpful to form an association that brings together investors, budding start-ups, industrialists, and organisations whose main aim would be to promote entrepreneurial culture in the state.
Start-ups are the future of our economy. It is the need of the hour for the Government of Tamil Nadu to work with industry partners and policymakers to create and nurture a robust environment for start-ups to thrive in the state for many years to come.
