Volume 8, Issue 6, June – 2023 International Journal of Innovative Science and Research Technology

ISSN No:-2456-2165

A Study on Startups and it's Impact on Msmes in

India with Special Reference to Uttar Pradesh
Nikhilesh Kumar Sonker
Prof. Krishna Kumar Agarwal

Abstract:- Startups are powerful drivers of innovation, One of the key ways in which startups are contributing to
growth, and competitiveness for MSMEs. By the development of MSMEs in Uttar Pradesh is by providing
collaborating with startups, MSMEs can access new access to capital. Startups have access to a range of
ideas, technologies, funding, and talent, enabling them to financing options, including venture capital, angel investors,
expand their market reach and stay ahead of the and crowdfunding. By investing in startups, MSMEs can
competition. This study is an attempt to examine the access these financing options and use the capital to expand
impact of startups on micro, small, and medium their businesses, invest in new technologies, and develop
enterprises (MSMEs) in India. The study explores the new products and services. Startups are also promoting
significance of startups as catalysts for innovation, innovation and technological progress in MSMEs by
economic growth, and employment generation in the offering new ideas and technologies. Many startups in Uttar
Indian MSME sector. Special attention is given to the Pradesh are working on cutting-edge technologies such as
role of government policies, financing, and mentorship artificial intelligence, blockchain, and machine learning. By
programs in promoting the startup ecosystem. The partnering with startups, MSMEs can benefit from these
research employs a mixed-methods approach, including technologies and improve their productivity and
surveys, interviews, and case studies, to gather data. The competitiveness. Startups are also helping MSMEs access
results indicate that startups have positively impacted new markets, both within Uttar Pradesh and beyond. Many
the growth and competitiveness of MSMEs in India, startups are focused on creating new marketplaces and
creating new markets and job opportunities. The study platforms, that can provide MSMEs with access to a broader
concludes with recommendations for enhancing the customer base. Startups can also help MSMEs reach new
startup ecosystem and facilitating a symbiotic markets by providing marketing and distribution support.
relationship between startups and MSMEs in India. Finally, startups are promoting an entrepreneurial culture in
Uttar Pradesh. By encouraging individuals to start their own
Keywords:- Startups, MSMEs, Innovation, Economic businesses, startups are creating a new generation of
Growth, Mentorship Programs, Competitiveness, New entrepreneurs who can drive economic growth and job
Markets, Job Opportunities. creation in the state. Startups are also providing training and
mentoring support to entrepreneurs, which can help them
I. INTRODUCTION overcome the challenges of starting and growing a business.
Startups have a significant role to play in the development
Startups have been identified as a key driver of of MSMEs in Uttar Pradesh. They can provide access to
economic growth and development, particularly for micro, capital, promote innovation and technological progress, help
small, and medium enterprises (MSMEs). In Uttar Pradesh, MSMEs access new markets, and promote an
the startup ecosystem has been flourishing in recent years, entrepreneurial culture. The government of Uttar Pradesh is
and its impact on the development of MSMEs in the state taking several steps to support the development of startups
has been significant. MSMEs play a crucial role in the in the state, including providing funding, creating incubation
Indian economy, accounting for a significant portion of centers, and promoting startup events and competitions. By
employment and GDP. They are an essential component of supporting the startup ecosystem, Uttar Pradesh can
the country's industrial structure, particularly in the accelerate the growth and development of MSMEs, promote
manufacturing and service sectors. However, they face job creation, and drive economic growth in the state.
several challenges, including limited access to finance,
technology, and markets, which inhibit their growth and II. REVIEW OF LITERATURE
competitiveness. Startups have the potential to address these
challenges by offering innovative solutions, access to The role of startups in promoting the growth and
capital, and new markets. They can also promote development of MSMEs has been a topic of significant
entrepreneurial culture, create jobs, and drive technological interest in recent years. Several studies have examined the
progress. The development of startups, therefore, is critical impact of startups on MSMEs in different regions, including
to the growth and development of MSMEs in Uttar Pradesh. Uttar Pradesh.

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Volume 8, Issue 6, June – 2023 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
 Gupta and Gautam (2021) Conducted a study on the IV. AN OVERVIEW OF STARTUPS OF INDIA
impact of startup incubation centers on the growth of In India, a startup is typically defined as a company or
MSMEs in Uttar Pradesh. They found that startups can entity that was incorporated or registered in India not more
help MSMEs overcome challenges such as limited than ten years ago, has an annual turnover not exceeding
access to finance, inadequate infrastructure, and lack of INR 100 crores (approximately USD 13.6 million), and is
technology adoption. Startups can provide access to engaged in developing or innovating a new product, process,
funding, technology, and networks that can help MSMEs or service or significantly improving an existing product,
expand their customer base and streamline their process, or service. Additionally, startups in India should
operations. have a scalable business model with a high potential for
 Chandra and Sharma (2021) Conducted a study on the employment generation or wealth creation. The definition of
impact of government policies on the growth of startups a startup in India has been provided by the Department for
in Uttar Pradesh. They found that government policies Promotion of Industry and Internal Trade (DPIIT), which is
that promote innovation and entrepreneurship can the nodal agency responsible for the formulation and
significantly improve the startup ecosystem in the state. implementation of policies related to industrial development
These policies can include tax incentives, funding and entrepreneurship in India. This definition is used for the
programs, and regulatory support. purpose of availing various benefits and schemes offered by
 Sharma et al. (2020) Conducted a study on the role of the government of India to promote the growth and
startups in promoting the development of MSMEs in development of startups in the country. India has emerged as
Uttar Pradesh. They found that startups can help MSMEs one of the leading startup hubs in the world in recent years.
adopt digital solutions, which can significantly improve The Indian government has implemented various policies
their productivity and competitiveness. Startups can and initiatives to promote entrepreneurship and innovation
develop digital marketing solutions, e-commerce in the country. Here is an overview of startups in India:
platforms, and online payment systems that can help
MSMEs expand their customer base and streamline their  Industry Focus: Indian startups are primarily
operations. focused on technology, e-commerce, fintech,
 Sharma (2019) Found that networking can help startups healthtech,edtech, and foodtech. In recent years,
and MSMEs connect with other businesses, industry there has been a surge in the number of startups in
associations, and government agencies, providing access agritech and cleantech as well.
to new markets, information, and resources that can help  Funding: India's startup ecosystem has seen a
them grow and develop. significant increase in funding in recent years.
 Overall, the literature suggests that startups can play a Venture capital firms, angel investors, and
crucial role in promoting the growth and development of government initiatives are the primary sources of
MSMEs in Uttar Pradesh. Startups can provide access to funding for Indian startups. According to a report
funding, technology, networks, and market linkages that by NASSCOM, Indian startups raised a total of
can help MSMEs overcome challenges and grow their $12.7 billion in funding in 2020, despite the
businesses. However, government policies and pandemic.
networking opportunities also play a critical role in  Unicorn Club: India has 48 unicorns, startups
creating an enabling environment for startups and valued at $1 billion or more. These unicorns
MSMEs in the state. include companies like Flipkart, Ola, Paytm,
Byju's, and Zomato. Indian startups have also
 Objectives of Study gained global recognition, with Oyo Rooms,
 To Make an Overview on Startups of India. Freshworks, and Zoho being some of the successful
 To study the impact of startups on MSMEs in Uttar companies.
Pradesh.  Government Support: The Indian government has
 To Study the Role of Startups on the 5 Trillion $ introduced various schemes and initiatives to
Journey of the Indian Economy. support startups, such as Startup India, Make in
India, and Digital India. These initiatives offer tax
III. RESEARCH METHODOLOGY benefits, funding opportunities, and mentorship
programs to startups
Research methodology provides a framework for
investigating the role of startups in the development of V. IMPACT OF STARTUPS ON MSMES IN
MSMEs in Uttar Pradesh. The study will use secondary data UTTAR PRADESH
sources and employ descriptive and analytical research
methods to explore the topic. The study's limitations and The impact of startups on micro, small, and medium
ethical considerations will be carefully considered to ensure enterprises (MSMEs) in Uttar Pradesh is a topic of great
the validity and reliability of the findings. The secondary interest, as it provides insights into the role of startups in
data will be collected through a review of existing literature driving economic growth and employment generation. Uttar
on the topic. Relevant articles, reports, and publications will Pradesh is the most populous state in India and is home to a
be identified and reviewed to provide a comprehensive large number of MSMEs. The state has seen a surge in
overview of the current state of research on the topic. startup activity in recent years, with the government actively
promoting entrepreneurship through various schemes and

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 Volume 8, Issue 6, June – 2023 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
initiatives. The research paper aims to analyze the impact of aims to create a favorable environment for startups to thrive,
startups on the growth and development of MSMEs in Uttar which can in turn support the growth of MSMEs and
Pradesh. The study will employ both qualitative and contribute towards achieving the goal of a 5 trillion dollar
quantitative research methods to gather data and insights economy in India.
from MSMEs and startups in the state. The research will
focus on the following areas: VII. FINDINGS OF THE STUDY
● Impact on Innovation: Startups are known for their
innovative products and services. The study will explore ● Startups can play a crucial role in driving economic growth
how startups are impacting the level of innovation in and innovation in India. They can bring in new ideas,
MSMEs in Uttar Pradesh. technologies, and business models, which can create new
● Impact on Employment: Startups are significant job markets and opportunities.
creators, especially in the early stages of their growth. ● By fostering a culture of entrepreneurship and innovation,
The research will examine the impact of startups on startups can contribute towards the development of a
employment generation in MSMEs in Uttar Pradesh. thriving ecosystem that can support the growth of MSMEs
● Impact on Competition: Startups are often disruptive and other businesses in India.
and can challenge established businesses. The research ● According to a report by NASSCOM, the Indian startup
will analyze the impact of startups on the competition ecosystem has grown significantly in recent years, with over
faced by MSMEs in Uttar Pradesh. 50,000 startups in the country as of 2021.
● Impact on Access to Finance: Startups are known to ● These startups have generated over 1.5 million jobs and
face challenges in accessing finance, but they also bring have attracted more than $63 billion in investments.
in new sources of funding. The research will examine Furthermore, the Indian government has launched several
how startups are impacting the availability of finance for initiatives to support startups and entrepreneurship in the
MSMEs in Uttar Pradesh. The research findings will be country, such as the Startup India scheme, the Atal
valuable for policymakers, entrepreneurs, investors, and Innovation Mission, and the Digital India program.
other stakeholders interested in the startup ecosystem in ● These initiatives aim to create a favorable environment for
Uttar Pradesh. The study will provide insights into the startups to thrive, which can contribute towards achieving
opportunities and challenges faced by MSMEs in the the 5 trillion dollar goal. Overall, the role of startups in the
state and help identify ways to support their growth and Indian economy is significant, and their contribution
development. towards achieving the 5 trillion dollar goal cannot be
overlooked. By fostering innovation, creating new job
VI. ROLE OF STARTUPS TOWARDS THE PATH opportunities, and attracting investments, startups can play a
OF 5 TRILLION DOLLAR JOURNEY OF vital role in driving economic growth and development in
INDIAN ECONOMY India.

Startups have the potential to make a significant impact VIII. SUGGESTIONS BASED ON THE STUDY
on the growth of MSMEs (micro, small, and medium
enterprises) and contribute towards achieving the goal of a 5 Here are some suggestions on the topic of the role of
trillion dollar economy in India. Here are some ways in startups in achieving the 5 trillion dollar goal of the Indian
which startups can play a role: economy:
● Job creation: Startups can create new job opportunities for  Encourage more startups: The government should
skilled and unskilled workers, which can boost employment continue to encourage and support the growth of startups
and economic growth. in the country through various initiatives, such as tax
● Innovation: Startups are often driven by innovation and incentives, funding opportunities, and mentorship
disruptive ideas, which can help MSMEs to improve their programs. This can help to create a more vibrant
products and services, and stay competitive in the market. ecosystem for entrepreneurship and innovation.
● Funding: Startups can bring in funding and investments,  Focus on innovation: Startups can drive innovation in
which can help MSMEs to scale up their operations and various sectors of the economy, such as healthcare,
expand their businesses. agriculture, education, and technology. The government
● Technology adoption: Startups often rely on technology to can encourage startups to focus on these areas and
drive their business models, and this can encourage MSMEs provide them with the necessary support to develop new
to adopt new technologies and digital solutions to improve products and services that can create new markets and
their efficiency and productivity. opportunities.
● Collaboration: Startups can collaborate with MSMEs to  Foster collaboration: Collaboration between startups,
create new business models, products and services, which MSMEs, and larger companies can create synergies that
can help them to access new markets and grow their can help to drive growth and innovation in the economy.
businesses. The Indian government has recognized the The government can facilitate such collaborations by
importance of startups in driving economic growth and has providing networking opportunities and other forms of
launched several initiatives to support the startup ecosystem support.
in the country. Some of these initiatives include the Startup  Improve access to funding: Access to funding remains
India scheme, the Atal Innovation Mission, and the Digital a significant challenge for startups in India. The
India program. Through these initiatives, the government government can work towards improving access to

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Volume 8, Issue 6, June – 2023 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
funding by creating more opportunities for venture http://www.ijrar.org/viewfull.php?&p_id=IJRAR19-
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educational institutions to develop programs that can y%20on%20Startup%20and%20its%20impact%20on
produce more skilled entrepreneurs and innovators. By %20MSME%20in%20India%20with%20special%20re
implementing these suggestions, the government can ference%20to%20Maharashtra%20State.pdf
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and other businesses. Overall, the study emphasizes the
significant and positive contribution of startups towards
driving economic growth, innovation, and job creation in
India.

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