NEW DELHI: The number of incubators in the Indian ecosystem has grown steadily, with more than 1,100 active incubators dotting the Indian startup ecosystem, said the latest report released on Friday.
A joint research report jointly released by NSRCEL, the startup incubator at the Indian Institute of Management (IIM) Bangalore and the Centre for Research on Start-ups and Risk Financing (CREST) Indian Institute of Technology (IIT) Madras highlighted that the southern region leads the pack, housing 45 percent of all incubators and having the highest density of incubators.
Chennai has a high proportion of academic incubators (82 per cent), whereas Bengaluru and Gurugram have a high proportion of industry incubators at 71 per cent and 84 per cent, respectively, according to the report ‘India Incubator Kaleidoscope 2024.’
Moreover, tier-I cities house almost half of all incubators 48 per cent.
The mix of incubators hosted by academic institutions, industry, and the public sector shows significant variation across cities.
The incubator density is 0.8 incubators per million population, whereas countries like the US, the UK, and China range between 8 and 10 incubators per million population. This indicates the need for setting up more incubators in the country, the report added.
Incubation is sought after by students, young professionals, women founders, and those with modest financial resources. “This is a positive trend that indicates that the support system is working for those who need it,” the report said, adding that the rate of incubation is high among deep tech sectors such as AI/ML, data analytics, biotech, and other sectors.
All of them have an incubation rate upward of 12 percent.
The contribution of the incubated startups to the economy has also been significant. The annual average revenues in the initial years for every 100 incubated startups have been about ₹1590 crores.
The average value of assets for every 100 incubated startups by the ninth year from incorporation has been estimated at ₹10627 crore. However, the revenue performance of startups associated with industry incubators is 50 percent higher as compared to those supported by academic incubators, it said.
Launching the report, Amitabh Kant, G20 Sherpa and ex-CEO of NITI Aayog, said, “In the growth of the Indian startup ecosystem, incubators play a very crucial role, and their contribution has been expanding in recent years. Conceptualised initially to facilitate the formation of start-ups, today, Incubators perform multiple roles, such as bringing together scientific and business expertise, channelling capital to promising start-ups, and increasing awareness of startups in society."
“For the government, incubators are becoming the last link in identifying startup beneficiaries for various schemes and monitoring their progress. I am happy to note that two of the best institutions in the country have joined hands in bringing this timely as well as relevant publication on incubators. Their findings vindicate the policy emphasis on incubators while giving suggestions on how the incubation landscape can be further enriched through various interventions,” he added.
Prof. Rishikesha T. Krishnan, Director, IIM Bangalore, said, “The value of innovation cannot be overstated. Incubators play an important role in supporting the unique needs of diverse creators not only by accelerating grassroots development but also by levelling the playing field.”
Among the various significant findings of this collaborative research undertaking is that the cities of Chennai and Bangalore lead the startup ecosystem with their high concentration of industry and academic incubators. As IIMB stands at the heart of India’s knowledge capital, we look forward to continuing our sustained contribution to the city’s deep roots—its history and investment in the future of growth and innovation,” he said.
Prof. V. Kamakoti, Director of IIT Madras, said, “For Bharat to become a superpower, we must aspire to make our country a startup nation. This effort involves interactions between multiple stakeholders. This report addresses this crucial point and the challenges.”