⁠Andhra Pradesh is rewriting what a state can build

For nearly three decades, Indian states have competed on a familiar playbook. Attract factories, announce investment commitments, build industrial parks, and create jobs. That conversation is now beginning to change.

Across the world, traditional employment is under pressure. Artificial intelligence, automation, and changing business models are enabling companies to produce more with fewer people. Even the largest technology companies continue to grow revenue while hiring at a slower pace than in previous decades, and manufacturing is becoming steadily more automated.

The pressure is sharpest in a young country. By various estimates, close to one crore Indians enter the workforce every year, while the country's colleges now enrol a record 4.5 crore students, according to the latest All India Survey on Higher Education, and send millions of graduates into the job market annually. If large employers alone cannot absorb them, where will tomorrow's jobs come from?

This leads to a more fundamental question: How do states create entrepreneurs, not just employment? Because while companies hire people, entrepreneurs create companies. Every successful startup has the potential to become an employer for decades, generating new industries, supply chains, and opportunities that governments alone can never produce.

Andhra Pradesh is attempting to answer that question with one of the country’s most ambitious state-led entrepreneurship strategies. When the NDA alliance of the Telugu Desam Party (TDP), the Jana Sena Party led by Pawan Kalyan, and the BJP took power in June 2024, it inherited a young state hungry for jobs.

In the two years since taking office, Chief Minister Nara Chandrababu Naidu and Minister for Information Technology, Electronics and Human Resource Development, Nara Lokesh, have begun building a "founder economy", an ecosystem where entrepreneurship itself becomes public infrastructure.

The idea has a lineage. In her book The Entrepreneurial State, economist Mariana Mazzucato argues that governments can act entrepreneurially themselves by funding research, taking early risks on innovation that the private sector will not, and shaping markets before companies move in.

Andhra Pradesh is extending that idea one step further. Rather than backing only innovation, it is treating entrepreneurship itself as public infrastructure, with the aim of enabling thousands of founders to emerge across the state. The distinction from conventional industrial policy matters. Industrial investment creates jobs today, while a founder-led economy creates businesses that keep creating jobs for decades, and that becomes more critical in an era when traditional employment is being reshaped by technology.

From industrial policy to entrepreneurship policy

Most state economic strategies focus on attracting companies. Andhra Pradesh is trying to build the conditions that allow thousands of companies to emerge from within the state. The policies recognise a simple reality. Governments cannot employ millions of young people, and government recruitment, however ambitious, can only fill a handful of the roles a young state needs. Large corporations alone cannot absorb India’s demographic dividend either. Only entrepreneurs can continuously create new businesses, new markets, and new employment at the scale the country will require.

It marks a shift from measuring success through MoUs and investment announcements to building long-term entrepreneurial capacity. Krishnasharma Gudipudi, an ecosystem enabler who has worked with Startup India and the Andhra Pradesh Innovation Society, says the state’s strength lies in a “policy first mindset” that “creates institutions that endure beyond individual tenures”, and calls it “an approach that other states can learn from”.

The AP MSME and Entrepreneur Development Policy 4.0, approved in October 2024, is built around a single guiding mission, 'One Family One Entrepreneur', the state's goal of nurturing an entrepreneur in every household.

The state's Innovation and Startup Policy 2024-29 carries that ambition into the startup ecosystem. It sets a target of nurturing 20,000 startups over five years, offers incentives for women, Scheduled Caste, Scheduled Tribe, minority, and differently-abled founders, and envisions a Ratan Tata Innovation Hub in Amaravati with five regional centres offering mentoring, access to finance, and venture capital connections. When the policy was launched, the state had around 6,658 startups, of which 1,158 were founded by women.

An ecosystem spread across a state, not a city

There is a second, quieter choice embedded in the roadmap. Most successful technology ecosystems in India have pooled into a single city. Andhra Pradesh is attempting to spread its own across the map. Visakhapatnam in the north is emerging as the knowledge and IT anchor, and is the chosen home for Google’s artificial intelligence hub.

Amaravati at the centre is being rebuilt as the capital and hosts the Quantum Valley Tech Park. Sri City in the south has become a magnet for electronics and Korean manufacturing. The government has said it wants co-working hubs in all 26 district headquarters, pushing opportunity beyond the capital and into the districts.

It is the harder path, because it asks a government to build infrastructure and confidence in many places at once. But an ecosystem distributed across regions keeps founders closer to home and taps talent that would otherwise migrate away. The ambition is also changing what that ecosystem is being built for.

Murali Krishna Gannamani, CEO of Fluentgrid and immediate past chairman of CII Andhra Pradesh, describes a startup ecosystem “rapidly transitioning from traditional IT services to deep-tech and advanced emerging technologies”, and says it is on track to become a “premier Indian powerhouse” for deep-tech innovation.

What founders want, and how Andhra is answering

Ask most early-stage founders what they need, and the answers rarely change: capital, talent, affordable workspace, a strong founder community, and, increasingly, access to serious computing power.

On the computing front, the state has anchored two assets most founders could only wish for. Google’s roughly $15 billion artificial intelligence hub in Visakhapatnam, announced on October 14, 2025, and the company’s largest investment to date in India, will bring gigawatt-scale infrastructure to the coast.

Meanwhile, the Quantum Valley Tech Park in Amaravati, being built with IBM and Tata Consultancy Services (TCS) around what the partners describe will be India’s largest quantum computer, is designed to give startups and researchers cloud access to advanced computing services even before the hardware is commissioned, with deployment targeted for September 2026.

More than one lakh learners from Andhra Pradesh have already enrolled in a national quantum computing course, an early sign of the talent pool forming around these assets.

On infrastructure and mentorship, the district hubs and the Innovation Hub lower the cost of starting up, while the AP Startup One portal is meant to simplify access to registration. On capital and market access, IT Minister Nara Lokesh has carried the pitch abroad, proposing an India-Korea startup corridor with a dedicated Korea Desk and joint incubation programme. For founders already building in the state, the optimism is real but conditional.

"As a founder building AI-first businesses right here in Vizag, I am genuinely optimistic about where our state is heading. I see a government that is actively trying to create an ecosystem where entrepreneurs can build, innovate and scale. If this momentum continues with consistent execution, faster approvals and stronger support for startups across Tier II cities, Andhra Pradesh can become one of India’s most exciting innovation hubs."

-Ajay Manchukonda, founder and Managing Partner, GAAP Tuff Glass LLP

The government appears to share that emphasis on execution. In March 2026, minister Lokesh was candid that the goal was not about signing MoUs, but about ensuring investments materialise on the ground, and what finally counts is how many jobs get created rather than how many agreements get inked.

The state has reported drawing 756 projects worth Rs 21.64 lakh crore over 23 months, and has set September 2026 as the deadline to ground approved projects.

India’s next economic competition

The next decade will not be defined solely by which states attract the largest factories. It will be defined by which states produce the largest number of entrepreneurs. In an AI-driven economy, employment can no longer depend on a handful of large employers. It must also come from thousands of new companies being built every year.

Factories create jobs. Founders create industries. And industries create generations of jobs.

The states that succeed will be those that build complete entrepreneurial ecosystems, combining infrastructure, talent, capital, research, policy and execution into a single development strategy.

Andhra Pradesh has begun constructing that roadmap. Whether it becomes India’s benchmark will depend not only on attracting investment, but on whether thousands of entrepreneurs choose to build enduring companies from within the state.

Because in the coming decade, the most valuable economic asset a state can cultivate may not be the factory it attracts, but the founder it enables.