Problems Faced by Startups In This New World

By Ravi Kiran

Posted on February 2, 2017

We live in a time when centre right parties are taking over the world. It is a  movement that has happened in India as well, with Narendra Modi’s surge to power, continued with the Donald Trump election and with events like Brexit. So with right wingers in both France and Germany waiting to pounce, one can never tell. Therefore how does this affect the startups environment in both India and abroad?

Most of the governments in power are extremely conservative. They are not likely to make too many changes to benefit business building. While they may have won elections on claims of encouraging entrepreneurs and startups, the bureaucracy, which is delegated to do the actual work, can be a major roadblock to freedom. Procedures are established to safeguard the interest of the common man. But, sometimes, they take a huge amount of time, which can be better used for other purposes. This can be a huge issue for startups. While under no circumstances, corruption can be justified, it is a bitter truth that it is rampant ins bureaucratic departments. Even private sector is not spared by it. As it hampers growth of the business, it is a challenge for budding entrepreneurs.

Lack of manufacturing capability in India has been attributed to red tapism and corruption, but the low productivity of labour is also a big factor. In the early days of off shoring, firms from the US and Western Europe preferred to set up manufacturing facilities in Thailand, Mexico, and China, rather than in India. Though these countries too had an equally bad record of red tapism and corruption, the labour in these countries were found to be more productive. An active workers’ union is not bad, but sometimes, in India, there may be more than one union, with differing agendas, claiming to represent the workers’ interests.

Since India is a secular country, religious beliefs of every religion are respected. So, it has holidays on occasions such as Christmas, Good Friday, Holi, Diwali, Muharram, Id-ul-Zuha, Guru Nanak’s Birthday, Buddha Jayanti, and Mahavir Jayanti. There are also holidays on occasions of national importance. As a result, the number of working days in a year is reduced. Furthermore, long breaks in work brought about by bandhs, regional unrest, and breakdown of supporting infrastructure in times of floods, earthquakes, and other natural calamities also disrupt the work.

When it comes to the rest of the world, it doesn’t paint a much prettier picture either. Most of the countries are now looking inwards for business. Donald Trump is trying to build a wall to protect USA’s interests. Brexit is in process, which is an attempt to limit the British to their own land. All this is done to ensure a country’s needs are put ahead of companies’ needs. All of this shows that right now, despite measures taken to promote economic growth, there are a new set of challenges for startups. Real successful startups should do their best to face all these challenges to ensure their company grows, whether it rains or shines.

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Problems Faced by Startups In This New World