{"id":4798,"date":"2021-01-18T14:19:33","date_gmt":"2021-01-18T08:49:33","guid":{"rendered":"https:\/\/www.tactyqal.com\/blog\/?p=4798"},"modified":"2024-05-18T12:20:20","modified_gmt":"2024-05-18T06:50:20","slug":"role-of-startups-in-an-economy-why-every-government-promote-startups","status":"publish","type":"post","link":"https:\/\/tactyqal.com\/blog\/role-of-startups-in-an-economy-why-every-government-promote-startups\/","title":{"rendered":"Why Should Governments Support Startup Businesses?"},"content":{"rendered":"

[vc_row][vc_column][vc_column_text]Every transformation in the world begins with an idea. When an idea — big or small, acts as a catalyst for change it becomes an innovation. Precisely, <\/span>startups<\/span><\/a> are nothing but innovative ideas to solve problems and transform lives.<\/span><\/p>\n

An abstract definition of a \u2018startup\u2019 will describe it as a state of mind to forgo stability and combat uncertainty in exchange for tremendous growth opportunities and a <\/span>steep learning curve<\/span><\/a>.<\/span><\/p>\n

A simple and more pragmatic definition would describe a \u2018startup\u2019 as an enterprise that has recently commenced operations. Commonly used synonymous phrases for startups are \u2018fledgling business organizations\/enterprises\u2019 or \u2018budding companies\/firms\u2019.<\/span><\/p>\n

However, in recent times, rapid technological advancements and an increase in the number of STEM (Systems-Technology-Engineering-Mathematics) graduates have led to a proliferation of technology entrepreneurs or tech-startups. Thus, startups are now largely attributed to budding technology companies.<\/span><\/p>\n

Many countries in the world including India have experienced massive growth in the number of startups launched every year. While it is difficult to ignore an increasing number of startup businesses going kaput every year, the indispensable role of startups in shaping an economy cannot be denied.<\/span><\/p>\n

Now let us examine <\/span>how startups drive economic growth<\/span><\/a>.<\/span><\/p>\n

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Role of Startups in an economy<\/b><\/h2>\n

There are primarily two types of startups. They are :-<\/span><\/p>\n

Subsistence startups<\/span><\/i>: Startups that want to achieve a decent level of financial independence while enjoying their work but do not aspire to make it big. These companies are also known as lifestyle businesses.\u00a0<\/span><\/p>\n

Transformational startups<\/span><\/i>: Startups that significantly impact the economy and aspire to continually expand their client base within their country of origin and abroad. The last few years have witnessed a rapid expansion in the number of transformational startups being launched each year. These are the startups that create ripples in an economy.<\/span><\/p>\n

They impact the economy in the following ways:-<\/span><\/p>\n

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Drive technological growth<\/strong><\/h3>\n

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