The study shows that Chennai has the highest number of academic incubators

The Indian Institute of Management, Bangalore and the Indian Institute of Technology, Madras have released a report on the startup incubator ecosystem.

Indian Incubator Kaleidoscope 2024 is a joint venture between NSRCEL of IIM Bangalore and Center for Research in Startup and Risk Finance (Crest) of IIT Madras.

A. Thillai Rajan, director of Crest and professor of finance at the Faculty of Management Sciences, and Srivardhini K. Jha, professor of entrepreneurship at IIM Bangalore and chairman of NSRCEL, led the effort. The report provides insights and recommendations for policymakers and business leaders on creating and supporting startup incubators, essential to job creation and economic growth.

Ms Jha said the report recognized the gap between incubator activities and impact, which is not well understood, and highlighted the need to increase incubator activity and improve the quality of incubation efforts across the country.

There are currently over 1,100 incubators in the startup ecosystem, with the southern region accounting for 45% of all incubators. About 48% of incubators are located in tier 1 cities, with Chennai having the highest percentage of academic incubators at 82% and Bengaluru and Gurugram having 71% and 84% of industry incubators, respectively. The report said more incubators need to be set up in India as the incubator density is 0.8 per million population compared to 8-10 incubators in the US, UK and China.

Students, young professionals and female founders with modest financial resources are looking for incubators, while the incubation rate is high in high-tech sectors such as artificial intelligence, machine learning, data analytics and biotechnology.

The study also found that incubated startups won more awards and were more involved in creating intellectual property. Such startups had five times more published patents than non-incubated ones.

Thillai Rajan said the study showed that incubators increase the credibility of the startups they support. Amitabh Kant, G20 Sherpa and former CEO of Niti Aayog, who released the report, said the survey findings validated the policy emphasis on incubators, he said.

IIM Bangalore Director Rishikesh T. Krishnan said that incubators support the unique needs of diverse creators, accelerating grassroots development and leveling the playing field.

IIT Madras Director V. Kamakoti said the report’s recommendation would be beneficial to all stakeholders.