Until a few years ago, the buzz around deeptech was in limited circles. Technologies like AI and computer vision among others were restricted to research labs, educational institutions and select technology companies.
Today, the scenario is wildly different.
Innovation is at an all-time high, evident from the mushrooming of product startups, technology-aware investors, incubators and of course, a strategic advancement in deep tech innovation by enterprises.
Ahead of countries like UK, Germany and Israel, India is the third largest startup ecosystem in the world. Enterprise SaaS, and deep tech startups are largely responsible for India’s status catapulting as an innovation hub. Globally, there are around 3,500 AI startups, based on data from Statista. In India, there are atleast 700 advanced tech startups with AI being one of the fastest growth segments. NASSCOM data reveals that in 2018 alone, there was a 50% increase in the number of advanced tech startups in the country, specifically in areas like AR/VR, IoT, data analytics, blockchain and AI.
So what has changed in India?
A multitude of things. It’s not like the Indian tech industry was averse of new technologies. The 90s initiated a period of economic growth in India thanks to the boom in process outsourcing with this surge continuing well into the first few years of the 21st century. But, the economic crisis of 2008 drastically changed the landscape of the software industry.
The turn of the current decade brought a wave of innovation in India’s technology sector, forcing the industry to explore its USP.
Was it going to continue its legacy as one of the world’s largest outsourcing hubs or was it going to be the next innovation destination?
A number of factors contributed to India gravitating towards fostering innovation in technology, beyond being known as the world’s most cost-efficient outsourcing hub – globalisation of the IT industry, exchange of ideas and industry culture, exposure to innovation overseas and the returns it fetched from a monetary perspective, and finally, a sustained government impetus especially through initiatives like Digital India.
There is immense potential in India’s startup ecosystem today due to the high calibre of engineering graduates from premier institutions and the return of quality data scientists to India. There is a high level of problem solving capabilities, applicable to a high-growth-high-potential market like India. A cursory look at the Indian deep tech startup ecosystem will reveal some common trends – majority of the founders are either young graduates from premier institutes like IIT and IISc or Silicon Valley-returnees, who have spent years developing their skills in data science. And this is where the golden opportunity lies. Enterprises are keenly observing the quality of technical talent present in the ecosystem, as these professionals bring with them a wealth of knowledge and domain expertise in technology – and this is instrumental for a product company to thrive the initial wave of euphoria surrounding startups.
Young startups have already managed to find the perfect amalgamation of technology, especially AI and data science, solving a specific industry challenge – something that has taken IT veterans years to accomplish.
Most startups have a strong idea of solving a particular business problem, and are also working towards building IP. They have realized that IP is what determines their worth, and are seriously looking into filing patents. Where these companies face challenges is establishing scalability of solutions, profit margins, run adequate product testing, and devise competent go-to-market strategies.
This is where enterprises come in.
Over the years, almost every major technology and product company has turned its attention to startups. Be it Bosch, Qualcomm, Intel, NetApp and Walmart among many others, these are some of the most in-demand facilities for product startups to be associated with. These companies are providing startups with a host of facilities to improve product, enhance scale, build profitability, network with quality investors and conduct test-runs for products.
Major enterprises, banking on their stronghold on a specific industry, can provide startups a much-required impetus to strengthen product offerings. World-class accelerators and startup promotion programmes and initiatives are able to provide a strong foundation for fledgling product companies to scale.
Startups and small enterprises can now utilise state-of-the-art labs in GICs and other companies, harness in-house leadership expertise, access cloud credits and open source technologies. Startups can use these as tactical advantages, and focus their energies on problems that can be solved using technology.
Technology companies are now looking for companies that can build products with open APIs for easy integration into their existing data frameworks. The future of innovation in India is possible in harmony, not silos. The Innovation Quotient (IQ) of startups, combined with the seasoned expertise of large-scale enterprises can accelerate India’s position as the next major innovation hub in the world.