In a recent report, the State Planning Commission (SPC) has presented its recommendations to strengthen the startup ecosystem through a variety of suggestions as discussed in the report titled Start-Up Ecosystem in T.N.: Opportunities and Challenges. The core of the report is to increase access and ease operations to existing government schemes and funding systems. It claims that the introduction of a simpler application procedure to the funding of the State government is going to have a direct positive impact on the number of people applying to the important schemes.

Symmetric improvements and infrastructure

In addition to funding, the report also emphasizes systemic change, indicating that there is a need to have a stronger talent ecosystem and support systems. It also requires an active strengthening of social and spatial inclusion, and the tactical exploitation of best practices used in other States.

Some of the other recommendations are that sustainability needs to be part of the ecosystem, failures must be accommodated in the ecosystem, and regulatory processes and compliance have to be made lean and simple to optimize operations among startups. On Tuesday, the SPC ex-officio vice-chairperson Udhayanidhi Stalin and SPC executive vice-chairperson J. Jeyaranjan submitted the report to Chief Minister M.K. Stalin in Chennai.

Although there are policies in place that ensure the consideration of key aspects of the startup support program, including identification and support of entrepreneurship and funding avenues, the SPC report indicates that there are still issues in the changing ecosystem. Besides capital limitations, the report also notes obstacles in the human resources category, where talent sourcing and retention remain a challenge to startups.

Mr. Jeyaranjan said, “Academic incubators, government funding and public procurement have been instrumental in driving success across Tamil Nadu’s startup landscape, particularly for non-IT ventures. However, as with any evolving ecosystem, challenges persist. Access to funding remains a critical need, especially for manufacturing startups where infrastructure availability is equally vital. Talent acquisition and retention continue to pose hurdles, and the regulatory environment has to be further simplified to boost operational efficiency.”

Quotation Source: The Hindu  

Focus on public procurement from startups

The report particularly mentioned the contribution of various factors towards the success of the startup in the State, especially in non-IT businesses. It indicated that the key drivers of this success have been the academic incubators, government funding, and public procurement. With the importance of funding, the report realized the critical role of funding through the development of multiple funding programs that have been established by the government, including the TANSEED, where the ultimate aim is to jump-start the flow of capital into startups privately.

The State Planning Commission described a strong point of improvement in market access, specifically, in the area of public procurement by startups. Though the government has been promoting startups to procure through the government, there have been poor registration and participation trends.

The report indicated a number of factors, such as the lack of awareness amongst the startups, that there are perceived to be very long procedures, and that the eligibility to participate in the government tenders is very strict. These barriers are specifically addressed in the recommendation of simplifying market access processes, which will boost the movement of business between the government sector and the emerging companies.

Conclusion

The report submitted this week by the State Planning Commission provides a clear mandate to the government to go beyond the formulation of startup policies and devote special attention to implementation by simplification and making it more accessible. The main recommendation of streamlining the procedures in funding is important in making sure that the government capital and schemes are able to reach more businessmen, especially within the manufacturing industry. Addressing the urgent problem of talent retention, regulatory complexity, and the minimal role in the process of public procurement, the report gives a comprehensive map of ways of transforming the State into a more open-minded, efficient, and growth-driven driver of the economy.