Entrepreneurial Ecosystem Quality and Technology Startup Survival in India
Author(s): Rajiv Misra, Kalpana Devi Suresh, Vinod Chakravarthy
Affiliation: Department of Management, Motilal Nehru National Institute of Technology, Prayagraj, Uttar Pradesh, India
Page No: 44-47-
Volume issue & Publishing Year: Volume 3, Issue 3, 2026/03/09
Journal: International Journal of Modern Engineering and Management | IJMEM
ISSN NO: 3048-8230
DOI:
Abstract:
India’s startup ecosystem has expanded from 471 DPIIT-recognised startups in 2016 to over 1,17,000 in March 2024, making it the third-largest globally by recognised startup count. This rapid quantitative expansion masks a stark geographic concentration — Bengaluru, Mumbai, and Delhi-NCR collectively account for 61.4% of DPIIT registrations, and over 68% of disclosed venture capital investment — and significant survival rate heterogeneity: preliminary data from DPIIT’s MAARG portal indicates that only 34.2% of startups founded in 2016-17 remained operationally active by 2024, compared to 58.7% of startups that received formal angel or venture capital investment. These patterns raise fundamental questions about the relative contributions of location-specific entrepreneurial ecosystem quality versus firm-level attributes to startup survival.
This study applies Cox Proportional Hazard regression to a longitudinal dataset of 2,847 DPIIT-recognised tech startups founded between 2016 and 2020, tracked through March 2024 using annual MCA-21 filing status, GSTIN activity, and DPIIT recognition renewal as survival proxies. The entrepreneurial ecosystem quality is operationalised as a composite index across five dimensions — finance, talent, regulation, infrastructure, and culture — built from publicly available data (NASSCOM ecosystem reports, World Bank Doing Business Indicators, IIM-Bangalore StartupBlink city index, and NITI Aayog Innovation Index). Kaplan-Meier non-parametric survival curves by location tier and funding status provide the descriptive survival landscape, followed by Cox PH regression that simultaneously estimates the hazard ratio contributions of ecosystem quality, funding, founder characteristics, and team composition.
Startups in Tier-1 metros demonstrate significantly higher survival probabilities throughout the observation window (HR=0.48 relative to Tier-3 cities, p<0.001), but angel/VC-funded startups in Tier-2 cities exhibit comparable survival to unfunded Tier-1 metro startups, suggesting that access to quality funding partially substitutes for ecosystem advantages. Cox regression identifies angel/VC funding (HR=0.48), government incubation (HR=0.61), serial entrepreneurship (HR=0.64), team size ≥5 (HR=0.68), and ecosystem health score (HR=0.87 per unit) as significant protective factors against startup failure. Sector affiliation and founder educational credentials show smaller but statistically significant survival benefits.
Keywords:
startup survival, entrepreneurial ecosystem, Cox proportional hazard, Kaplan-Meier, DPIIT, venture capital, angel funding, Bengaluru, India, hazard ratio, startup failure, tier-2 cities, serial entrepreneurship, team composition
Reference:
[1] Audretsch, D. B., & Mahmood, T. (1995). New firm survival: New results using a hazard function. Review of Economics and Statistics, 77(1), 97-103.
[2] Cefis, E., & Marsili, O. (2006). Survivor: The role of innovation in firms' survival. Research Policy, 35(5), 626-641.
[3] Cox, D. R. (1972). Regression models and life-tables. Journal of the Royal Statistical Society: Series B, 34(2), 187-202.
[4] DPIIT. (2024). Startup India Progress Report: March 2024. Department for Promotion of Industry and Internal Trade.
[5] Guo, H., Tang, J., Su, Z., & Katz, J. A. (2017). Opportunity recognition and SME performance. Small Business Economics, 49(2), 375-397.
[6] Isenberg, D. J. (2010). How to start an entrepreneurial revolution. Harvard Business Review, 88(6), 40-50.
[7] NASSCOM. (2023). Indian Tech Startup Ecosystem: Annual Report 2023. NASSCOM Research.
[8] Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1), 217-226.
[9] SIDBI. (2023). SIDBI Fund of Funds for Startups: Annual Report. Small Industries Development Bank of India.
[10] Stam, E. (2015). Entrepreneurial ecosystems and regional policy. European Planning Studies, 23(9), 1759-1777.
[11] Stinchcombe, A. L. (1965). Social structure and organizations. In J. G. March (Ed.), Handbook of Organizations (pp. 142-193). Rand McNally.