Have plans, need moneyWithout institutional support, start-ups risk being too early for their time.
The Covid-19 pandemic has impacted start-ups just like other businesses; but industrious entrepreneurs have turned the crisis brought about by the pandemic on its head, and created opportunities out of it. From selling local honey to comfortable clothing for pregnant women, and from setting up co-working space for millennials to selling home-cooked meals, start-ups have ventured into wide-ranging service areas to cater to the needs of consumers. In many cases, they have catered exactly to the "new normal" of the post-pandemic age, a case in point being the growth of apps delivering food and beverages as more and more consumers prefer eating and drinking safely at home rather than going out.
The rise of start-ups is not a unique phenomenon in Nepal. Globally, there has been a new phenomenon of "start-up boom" despite—or even as a result of—the pandemic. If the pandemic has changed consumers' ways of interaction, shopping, travel and food consumption, start-up entrepreneurs have shown that their services can be customised to suit the "coronavirus economy". What is important to note is that the start-up boom in the online world has not come at the cost of brick-and-mortar establishments, but has come in addition to these traditional establishments. In that sense, it is a win-win for both the old and the new. This means that a large number of start-ups could continue to prosper even when the pandemic is over.
Start-ups are not just the innovative but transitory ideas of young college pass-outs who are keen to "do something" in a gap year before they take up "something serious". The growth of technology, changing work environments and changing customer behaviour has created new entrepreneurial experiments to flourish. But the government has not been able to catch up with the changing scenario, leading to policy gaps when it comes to supporting and regulating the start-ups. While the KP Sharma Oli government had in the budget for the current fiscal year envisioned a policy to provide Rs2.5 million at 1 percent interest to encourage start-ups, the revised budget brought by the Sher Bahadur Deuba government has bypassed them, leaving new entrepreneurs in the lurch. Clearly, the start-up community has fallen victim to a policy gap that forms during a change of government.
The draft Business Credit Flow Work Procedure 2021, which was envisioned to provide subsidised loans to new firms, has yet to take off. This has left young entrepreneurs disappointed, as the failure on the part of the government follows a pattern of big announcements failing to translate into action. Without institutional support, the start-ups risk being rendered "great ideas whose time has not yet come in Nepal”. As a result, young entrepreneurs who show promise and commitment to innovate, experiment and grow within the country become frustrated due to the lack of an institutional support system, and move abroad looking for opportunities that suit their competence levels. We cannot continue complaining about brain drain if we cannot think of ways to make a conducive environment for start-ups to prosper.