In this chapter, we discuss in detail the factors that lead to the emergence of high-tech start-ups in India. The emergence of high-tech start-ups has been studied under different theoretical approaches. Notable among them are approaches related to economics (Brenner 1987), psychology (Katz 1992), and population ecology (Aldrich 1990). The 1990s also saw a few empirical contributions that attempted to explain the phenomenon of high-tech start-up emergence. Bhave (1994), Reynolds and Miller (1992), and Carter, Gartner, and Reynolds (1996) made useful contributions to enhance the existing knowledge on start-up emergence in this regard. However, the major criticism of all the initial contributions was that researchers examined high-tech start-up emergence as a linear process, with a sequential set of steps that entrepreneurs carried out to achieve the milestone of formal creation of a new venture.
To address these criticisms, the next decade of contributions to the study of start-up emergence primarily focused on modelling start-up emergence as a process. During this period, many terms associated with the emergence of high-tech start-ups were coined, as part of examination of the phenomenon. Firm gestation (Reynolds and Miller 1992), organizational emergence (Gartner, Bird, and Starr 1992), pre-organization (Katz and Gartner 1988), and start-up (Vesper 1990) were the key constructs under which the emergence of new ventures was discussed.
Katz and Gartner (1988) suggested four emerging properties that indicate that an organization is in the process of coming into existence. These properties include the intention to gather information for the creation of an organization; boundary-establishment activities that distinguish the venture from the rest of the world (such as incorporation, partnership/management agreements, the establishment of physical offices, and a phone line), the acquisition of financial resources needed to operate an entity (including payments for rent, a phone bill, and equipment), and finally, exchanges with external suppliers and customers, culminating with initial sales and/or initial hiring.
In the context of this study, the boundary-establishment activity pursued by entrepreneurs is the focus of examination and analysis. This act of formal incorporation of the start-up by its founders serves as a signal to interpret many different phenomena related to start-up emergence that simultaneously are at play.