Can India be the next Silicon Valley?

Last updated 9 Mar 2016 . 3 min read

For over many decades the US was the land of opportunities, but India today is its modern day equivalent. The IMF (International Monetary Fund) has projected that India will overtake China as the fastest growing emerging economy in 2015-2016 by clocking a growth rate of 7.5% on the back of recent policy initiatives, pick-up  in investments and lower oil prices.

At present India boasts of the biggest consumer market and this continues to grow every year. Most of the major cities in India have a population greater than most European countries.  These are some of the unique factors that can make India the next Silicon Valley. 


Over 300 million people in India are off-grid and have no access to electricity. Silicon Valley companies like Simpa Networks and Tesla have renewable solar battery packs and can light up every home 24 *7 with efficient and low-cost energy. These companies give affordable and clean energy.

India is now innovating by finding more accessible solutions which can be used here and in other countries. India can leverage its strengths of her human capital and ICT services to become as major global economy. However supportive laws, good infrastructure, skilled labour force, research and development spending and innovative financial options are needed for entrepreneurs.

Entrepreneurial Spirit:

In India, the outsourcing industry boosts the entrepreneurial spirit. Home to almost 3000 startups, India is creating Unicorns at a pace that can match the best in the world. Global in their ambition, the new breed of Indian startups are already creating waves in the Venture industry with VC funding tracking firm Tracxn stating till April, 2015 that an amount $2.36 billion in funding has been raised by startups this year, which is more than three times the figure for the first four months of 2014 ($716 million). The number of $10-million-plus deals till April, 2015 has reached 35, more than double the 14 such deals till April-end, 2014. The whole of 2014 saw 50 such deals. Global investors have cashed in on sectors like e-commerce and transportation, with segments like classifieds, digital wallet & recharge, and food tech seeing significant investment.

Demographic dividend:

About 50% of India’s 1.2 billion population is below the age of 25 and two-thirds are below 35. We can continue to benefit from being a cost competitive destination that has low labour cost. India also has significant numbers of English-speaking people.

Today, as a young nation, we have 605 million people below the age of 25. While in the age group 10-19, poised for higher education, we have 225 million. This means that for the next 40 years we would have a youthful, dynamic and productive workforce when the rest of the world, including China, is aging.

The International Labor Organization (ILO) has predicted that by 2020, India will have 116 million workers in the work-starting age bracket of 20 to 24 years, as compared to China's 94 million.

So the demographic dividend can turn into a major advantage provided, of course, that we can educate and train our new generation(s) to take advantage of the opportunities that the 21st century world offers.

New policies in FDI (Foreign Direct Investments), initiatives like the Make in India program / Digital India Project are other  factors that can  help India become the next Silicon Valley.

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Radha Sivakumar
Radha Sivakumar is an educationalist and IT Professional. She loves teaching and fixing computers.

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