From UPSC perspective, the following things are important :
Prelims level : FAANG
Mains level : Paper 3- Importance of tech start-ups.
In the US, the Big Tech FAANG five are Facebook, Apple, Amazon, Netflix and Google (now Alphabet). Today, in India, Zomato’s stock market debut is a big occasion for India that could pave the path for other online successes.
Significance for economy
- It is the first among a host of domestic unicorns to have taken the IPO road, heralding a watershed moment.
- Boost for startups: It is also also a big leap for our country as a whole, which today boasts of the third largest start-up ecosystem in the world.
- Creation of online ecosystem: The response to Zomato’s initial public offer (IPO) gave us interesting insights into the robustness of the online economy in a pandemic-stricken world.
- Help creation of tech-giants: It could alter the composition as well as perception of markets, giving Indian investors a feel of new-generation, tech-heavy, assets-light and agile entrepreneurial growth stories, woven around the consumer internet ecosystem in India.
- Attracting FDI: With global liquidity at unprecedented levels and tech being the toast of the season, we could be looking at FDI inflows in unforeseen proportion in days to come.
- The ascent of new-age enterprises like Zomato and Paytm on the Stock Market, followed by likes of Oyo, Ola, Swiggy, Byju’s and even Flipkart could signal the emergence of India’s own FAANG family.
What sets the tech startups apart?
- Their reliance on big data and leveraging of ever-evolving technology, while sustaining a two-way connection with clients set them apart.
- The ‘stickiness’ and the ‘connect’ built over the years through carefully fabricated social layers puts them in the league of giant social media influencers.
- During the last few decades, two distinctive traits that have the potential to push the boundaries of limitations are the creation of a large talent pool and India’s prowess in software and data (including AI/ML) technology, both on a global scale.
As we celebrate 30 years of economic reforms, today’s debut, at least for the markets and the economy, may well be called India’s re-tryst with destiny.