Time for Manufacturing Incubation Centers

India needs to provide employment to the masses and manufacturing is one of the vital domains that can help India reach this goal. Manufacturing startups are an important component of this exercise.

Startups and entrepreneurs are getting exemplary support from government and private funding agencies at the ideation phase till the prototype and Minimal Viable Product, however, the arduous last mile of industrialization is often overlooked, and startups struggle to traverse this journey. Almost 80% of startups fail in scaling their ideas and innovations as they underestimate the effort needed and fall short of making their venture financially viable. Startups working in software development and services fare better in this respect as they do not face the unique hurdles that industrialization and actual production pose.

The most expensive factor of production for startups in India is “capital” which is needed to set up manufacturing facilities required to scale.  Many entrepreneurs in the initial stage end up spending on land, buildings, and equipment and find themselves short of cash to work on industrialization, establishing market linkages, and enhancing the value proposition to the customers. By the time they reach this stage, they discover their cash has dried up stemming their operations and thus ultimately leading to the business failing at the startup stage itself.

To avoid such a demise, it is perhaps time for a collaborative mechanism jointly by the government, industry, and academia to support startups in manufacturing to provide Plug-and-Play Incubation Factories.

Government institutions need to play a significant role in this effort by way of subsidies and space, apart from industry bodies and academic institutions that need to offer expertise and managerial advice. The Incubation Factory should provide world-class infrastructure, apart from all other necessary paraphernalia like safety and security systems, compliance assistance, technical and technological apparatus, testing, and quality equipment.

A “Pay per use” model and rentals can be charged, for the space allotted to such manufacturing startups making it a self-sustaining enterprise.

A manufacturing incubation center would, therefore, significant effort, time, and capital for entrepreneurs and let them focus on growing their businesses.