An Empirical Study on the Role of Digital Startups in Employment Generation

Abstract Since the Startup India program, digital businesses have emerged as a critical component of India's economic growth and employment creation. Using time-series data from 2015–16 to 2024–25, this study examines the effect of digital startups on employment. The dependent variable is recognised startups, while the explanatory variables include startup investment, internet users, and income from the IT–BPM industry. The Granger causality test and descriptive techniques are used in the study to evaluate the correlations between these variables. The findings show that startup investment (p = 0.4244) and internet users (F = 5.81410, p = 0.0929) do not substantially predict startup employment. On the other hand, IT-BPM revenue is strongly predicted by startup employment (F = 20.2711, p = 0.0181). According to the study's findings, employment generation is impacted by a number of variables other than investment and internet availability, even if digital startups are crucial to the development of the digital economy. To increase the employment potential of digital startups in India, it is advised to improve skills, put supporting legislation into place, and encourage inclusive entrepreneurship.