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Why Tier 2 and 3 cities are emerging as India’s startup hotspot with the fastest rate of growth?

Entrepreneur Bus by Entrepreneur Bus
January 20, 2023
in Latest, Startup
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Why Tier 2 and 3 cities are emerging as India’s startup hotspot with the fastest rate of growth

The day when startups and entrepreneurship were only practiced in major cities has long since passed. In India today, Tier 2, as well as Tier 3 cities, are home to almost 50% of the acknowledged start-ups.

The continuous technological revolution taking place in tier 2 as well as tier 3 cities is accelerating economic development in the nation and bringing about social change on a worldwide scale.

According to industry experts, increased infrastructure support, faster internet, favorable workplace conditions, better transportation communication, and access to a huge talent pool have all made a significant difference in the growth of start-ups in small cities.

Additionally, he continued, possibilities in the local market have been created as a result of changing consumer behavior, which is attributable to higher internet usage. According to a BCG survey, 50 percent of internet customers reside in smaller cities. By 2030, it is expected that this percentage will be 60%.

The co-founder and chief technology officer of Mahindra & Mahindra-funded Carnot Technology, Pushkar Limaye, stated that there is a lot of untapped potential in Tier II and Tier III cities for start-ups. Entrepreneurs who dare to dream big in little places are a genuine sign of India’s rise.

We’re always amazed by how much skill and creativity there is when we travel to smaller towns, rural regions, or agricultural expos. “It has always existed, but is now taking off as a result of increased technology and internet use, together with a boost in self-assurance.”

In India, development has reached Tier 2 and Tier 3 cities in addition to the metro areas, per Dinesh P. Singh, co-owner of WoodenStreet.

“The essential reason for the rising number of entrepreneurs from these sections of the country is the ability to solve local problems and offer solutions at scale in varied sectors like healthcare, education, manufacturing, agriculture, etc.,” Dinesh Pratap Singh stated.

Additionally, tier 2 towns like Jaipur, Ahmedabad, Indore, and Surat have had economic growth rates of over 40%. According to him, this is due to the availability of larger premises at low and reasonable prices, which allows startups to operate on a larger scale.

Tier 2 and Tier 3 enable quality infrastructure at a cheaper cost. These cities also have reduced living and survival costs. In general, people’s attitudes toward entrepreneurship in these cities are shifting. availability of both professional and unskilled workers at a less expensive rate compared to Tier 1 cities,” stated Dr. Vishesh Kasliwal, director of Medyseva.

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