(Renu Kohli is an economist with experience in macroeconomic policy and research. The column first appeared in The Telegraph on September 14, 2021)
- The rise of Indian unicorns — start-ups that reach $1 billion in valuation — has raised hopes of innovation and entrepreneurship-driven growth at a time when Covid-19 has caused much damage. This is not without foundation. Historically, recessions and pandemics are associated with both business failures and successes: natural forces arise from within and upset existing processes and arrangements, replacing these with profit-seeking innovations that increase productivity. This is the idea of creative destruction characterized by the Austrian economist, Joseph Schumpeter. India now has 100 unicorns, according to the investment bank, Credit Suisse; the Reserve Bank of India counts 10 new ones that emerged in 2019, 13 in 2020, while this year, three start-ups became unicorns each month! India hosts the third largest number of unicorns globally, after the United States of America and China, albeit at considerable distance from the former. What is the macroeconomic significance of their emergence?…
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