It is difficult to ascertain a precise moment when major economic transition takes place. During this transition every aspect of society changes: go
It is difficult to ascertain a precise moment when major economic transition takes place. During this transition every aspect of society changes: government, business, finance, education, medicine, energy, technology, art, and science all get upgraded. Humanity has seen three such transition: Horticulture to agriculture, agriculture to industrialization and most recent industrialization to information age. It took tens of thousands of years to switch to industrial economy from agrarian one while it took only couple of centuries to be digital economy from being industrial economy.
Over the last 20 years, a significant portion of job and economic growth has come from technology driven companies. Invention of the computer and internet has been main driver of this information age. However it took time realize potential of both. Perhaps Steve Jobs was one of the early visionary to recognize potential of synergy between internet and electronic gadgets which prompted him to start name of Apples every product with “I” of internet.With two billion broadband Internet users and billions of smartphones now entering circulation, the necessary tools and infrastructure are in place for the Information Age to burst into full bloom, moving beyond the confines of just the technology world to transform all aspects of society. Therefore, the role of technology entrepreneurship in our global economy is now more important than ever. Increasingly, it is becoming clear that technology entrepreneurship will be the primary growth engine of this new economic era.
So many startups have burst on the global scene that The Economist likened the entrepreneurial explosion to the Cambrian Explosion in earth’s biological history. So, what is happening behind the scene to foster this kind of sudden explosion?
Firstly, startups can be built for thousands of dollars instead of millions of dollars. Cost of products development has fallen by a factor of 10 over the decade. Codes and API are available freely in the market and once costly servers has given way to pay as you go service.
Secondly sources of finance has changed over time.When a VC is required to spend millions of dollars on an investment,they must make a small number of big bets. But the decrease in capital needed to start a software company has opened up the VC space to new types of investors: angels, accelerators, and micro-VCs. The investment they make are smaller, which means they can make a whole lot of small bets and give birth to a larger number of startups.
Thirdly speed of consumer adoption of technological change. The ease of global access to users and customers all aroundworld and the increasing speed of technological adoption byconsumers and businesses has enabled startups to grow at a significantly faster rate.
Startups have penetrated in almost every sector of the industry rather they have created new sectors like ecommerce, service aggregators, social platforms. Even after being just 5 to 10 years old, valuation of these startups are more than some of the companies that has been around for decades. But beyond wealth, startups also bring jobs. Lots of jobs. In fact, they are the only ones who bring new net job growth. In the coming decades, the ecosystems with the most thrivingstartups will enjoy the most thriving economies.
This startup revolution is not confined to a particular nation. It has permeated through entire world. Nations like Israel with the highest per capita startup has shown way to the world how startup ecosystem can help country take advantage of the technology. It has been a boon to emerging markets which usually lack resources. Realising potential of startup eco system government over the world has formulated policies to support this ecosystem and has given birth to many star up nations.
But is it sustainable?
Having gone through dot com bubble it is understandable that many people imagine same fate for the start up revolution. Rather than seeing this revolution as sign of coming bubble, we should see it as harbinger of wealth creation over coming decade.