- Hindol Sengupta
Are Indian start-ups showing the path to peaceful hegemony?
In the study of power between countries, or what we call international relations, hegemony is created through the military and material power of states. When these states promote cultural influence, it is described as the hegemony through ‘soft power’, a phrase created by theorist Joseph Nye.
In the industrial era, trade became an integral part of the hegemony of nations and the age of global corporation expanded that vision. The tech powers, Google, Facebook, and Twitter, continued that path, promising democracy where the (Dutch, Portuguese or English East India) Company once promised better trade while furthering hegemony. If US foreign policy uses Facebook and Twitter, China seems to be using Huawei and many others, having cleverly blocked its own territory from being taken over by Google, Facebook, and Twitter.
What does this mean for the future? It means a world where not only the global corporation, but the ecosystem of startups is where the quest for global influence shall begin, or rather, already begins. It is in a startup ecosystem that the ambition of global influence—even before that influence is attained—is seeded.
This is something I saw with interest in 2017 while visiting Israel’s famed startups in security, agriculture, robotics and finance which has earned it the moniker Startup Nation.
The steady growth of this kind of ecosystem in India and its links to the wider ‘rising India’ theory is little understood. Let us look at the numbers as noted by Invest India, the nodal organisation for startups in the country. India now has the second-largest startup ecosystem in the world with more than 20,000 startups in the country.
Invest India data shows that the country has 270 incubators, 2,200 angel investors, more than 200 venture capital firms, 22 unicorns (firms with a valuation of more than $1 billion) and a total unicorn valuation of more than $75 billion. At an average, even the most basic start-up creates, upon inception, 11 jobs.
Some of these startups are well-known, including digital financial service provider Paytm, online seller Flipkart, hotel rooms aggregator OYO and restaurant search and discovery service Zomato; some are only starting to get attention like online tutor Byju’s and logistics firm Delhivery, and some others are little-known but with immense potential like data analytics company Mu Sigma, merchant platform Pine Labs, and fantasy sports platform Dream11.
The Startup India website has become the country’s biggest virtual incubator—this even though it is state-run—and has more than 300,000 users.
Between 2014 and 2019, India’s startup ecosystem pulled in funding of almost $43 billion spread over 3,789 deals and with a CAGR (compound annual growth rate) of 22% in 2014-18, according to Invest India.
All this is still the tip of the iceberg for a country with a $2.8-trillion economy (the third largest in the world in purchasing power parity terms) which has leapt 42 places to reach the 77th spot in the World Bank Ease of Doing Business rankings in the last three years. To see the opportunity, note that India has 50 cities that are setting up metro rail systems and expenditure on investment in logistics is likely to hit $500 billion by 2025. It has created a fascinating platform called AGNII devoted to commercialisation of technology from Indian science laboratories to the market.
In fact, Invest India itself is not doing too badly—it is the world’s most awarded IPA or investment promotion agency. Among other things it won the UNCTAD (United Nations Conference on Trade and Development) award in 2018 for promoting investment in sustainable development.
The most interesting thing in all this, viewed through ramifications of rising India theorising, is that there is little anxiety about India’s startups. The reasons are clear—India does not propel armament startups, or, at the moment at least, has no arms unicorns which might destabilise power in any part of the world through illicit tech or guns transfer, and, unlike in China, there is no worry of technology theft or spying via any Indian unicorn. For instance, the U.S. Justice Department has said that since 2011, more than 90% of the department’s economic espionage prosecutions have some connection or the other with China.
These are no small issues. These are critical factors why the world is not worried about India’s rise—whether political or economic. And if India could keep it that way, it would show the true measure of its civilizational merit—that a nation could rise to world power status without disrupting global peace, and it shall have the opportunity to usher in a new paradigm, peaceful hegemony.
Courtesy : Fortune India