World Entrepreneurship Day Special : Let the gene of inventiveness express itself ! - Arifa Khan, Genius Incubator
Saturday April 17, 2010 , 9 min Read
This is a guest post by Arifa Khan on World Entrepreneurship Day. Arifa is the Founder and Managing Director of Genius Incubator Limited. Arifa has an MBA from Wharton School of Business, University of Pennsylvania with a Finance major, a B.Tech from Indian Institute of Technology, Madras in Chemical Engineering, and a Post Graduate Diploma in Business Management from XLRI in Marketing and Finance.
In his excellent memo ‘Looking ahead” on the occasion of IIT Madras’ golden jubilee , Director of IIT Madras, and my ex-Professor Dr M.S. Ananth reminds us of the words of Bharat Ratna Rajagopalachari, the first Indian Governor General of free India, “If the scientists of India make up their minds, they can raise India’s prestige to a degree which will more than make up for any failures or defects in other fields”. While the Indian scientists such as Venkatraman Ramakrishnan are indeed bringing glory to higher research institutions they are associated with, it is the innovating Indian entrepreneurs like Desh Deshpande, Vinod Khosla, Narayana Murthy, Dr Reddy and Ratan Tata that have brought home laurels, elevating brand India to a global pedestal.An entrepreneur has long term vision and is a grand dreamer. Mohandas Karamchand Gandhi is the best entrepreneur I know – he dreamt and achieved a breakthrough in the collective consciousness of India that is making our myriad and glorious ambitions in the 21st century a possibility! His Charkha was the first seed of entrepreneurship that he had sowed in India. I am using entrepreneurship loosely here to encompass not just business ideas that manifest a creative leap, but pioneering vision, and courage to dream what has not been done before and breathe life into a mere mental map.
Pundit Nehru was a visionary who boldly dreamt of today’s IITs that are spawning the world’s best, most innovative and richest entrepreneurs. Sportspersons like Sachin Tendulkar, Leander Paes, Sania Mirza and actors such as Amitabh Bacchhan and Shahrukh Khan are also entrepreneurs because they break new ground and do what has not been done before, and in the process create new paths for followers to emulate. That is entrepreneurship to me, and that separates men and women who shape their destiny and ours, in the process fulfilling their unique life purpose, from those who are happy to play the hand that is dealt to them in the seemingly arbitrary game of cards called life.
India is increasingly being acknowledged as a source of innovation. The Mumbai dabbawalahs, the $2500 Tata Nano, strides in biotechnology by Shanta Biotech, Serum Institute of India, bollywood’s indelibly glamorous mark on the global entertainment industry, the IPL are a few examples.
India is a blessed land with the mighty force of a billion entrepreneurs behind it. I say this because the average Indian who ekes out a living, by whatever means, even with no social security, no infrastructure, and no predictable environment of the developed world is an entrepreneur, and absent the brainier Indian exports that are busy making their rich adopted countries richer. India still holds tremendous promise that the rich countries can only dream of.
Where else can they find our born hungry entrepreneurs who are battle tested at every step and naturally trained in managing with zero budgets. Can we do more than just eke out a living for ourselves? Sure, we can. Dhirubhai did just that creating the organisation that perhaps employs the largest number of people in India.
India has a lot of catching up to do in innovativeness and to achieve what we are capable of. According to some statistics presented at the Pan IIT 2009 Chicago, Revenues per employee metric is linked to the innovativeness of the company, Google and Apple being at the top of the global companies on this metric.
Indian companies such as Tata and Infosys average $40k/year revenues per employee.
Microsoft’s revenues per employee are about $650k/year (120k employees)
Google $1101 k per employee ($22 billion revenues earned by 20k employees).
Oracle $260k per employee
Intel $448k per employee
Apple $1015k per employee
(Here is a side story on India’s product innovation in outsourcing.)
India’s invention deficit (presented at the Pan IIT 2009 Chicago):
India’s GDP $3 trillion
USA GDP $14 trillion
India’s licensing revenues $0.015 billion
USA licensing revenue $1.5 billion
If India were to catch up with USA in proportion of licensing revenues to GDP, India would earn about $320 million a year from licensing.
India can leverage its strong information technology (IT) base, IT and english trained workforce, intelligent leaders at the helm like Manmohan Singh, stellar entrepreneurial visionaries scattered across the diaspora, intellectual horsepower of our scientists and economists like Amartya Sen, and low cost research and development (R&D). Featured below are a few promising sectors for Indian entrepreneurs that can propel us to the next echelons of the progress that India is destined for:
Biotechnology
Indian biotech sector is poised to grow exponentially over the next few years, with an expected global market share of 10% from just 2% in 2003.
The GOI has doubled the biotech research outlay, from Rs 6.2 billion in the Ninth Plan (1997-2002) to Rs 14.5 billion in the 10th Plan (2002-2007). GOI has also eased the regulatory framework by approving genetically modified crops, recombinant-DNA products (rDNA) and ethical stem cell research. GOI made changes to the Patents Amendments Act (second amendments) in 2002 making Indian patents comparable to WTO and TRIPS.
The Govt. of Andhra Pradesh set up the Genome Valley, an area of 600 sq km, in 2000 to host biotechnology firms, providing high quality infrastructure at a reasonable cost.
R&D Outsourcing
R&D outsourcing has been recognised as India’s bastion for over a decade now with peripheral towns such as Pune, Mysore, and suburbs of Hyderabad gaining traction with global outsourcers as preferred R&D locations for abundant supply of affordable scientists. Pune is the new Princeton! The BusinessWeek-BCG survey asked companies where they planned to increase R&D spending – 44% answered India, 44% said China, and 48% said Western Europe.
Amazon India Development Center has been instrumental in developing a9.com, Amazon’s search technology. The Google R&D center has been set up in India to create google’s next killer innovation (s). Here’s another story on India’s untapped potential to reincarnate itself as a niche manufacturer of Electronic Products
Grassroots innovation is another concept that is catching on with the educated elite, and Anil Gupta, a Professor at IIM Ahmedabad is one such proponent of micro-innovation. IIT Madras’ Rural Technology & Business Incubator helps and incubates rural entrepreneurs.
Microfinance
The estimated demand for microfinance is a staggering Rs1.2 trillion of microcredit from 120 million households. The Indian microfinance sector is estimated to have provided about Rs160 billion worth of loans as of March 2009, out of which MFIs account for Rs114 billion. The recent spate of VC deals related to Microfinance is a proof of the humungous appetite for microfinance by the common man and secular growth trend in the sector.
If you are a sexy startup (aspiring to be the next google or facebook), here are things you must know that I picked up from my VC read
Aim to scale, aim for the stars (VC money) and not the moon (angels) -
What all startups should aspire for
What repels new money in a startup and how to eliminate it
Figure out the surprising thing your customers are doing with your product. (It may not be what you intended your product to be – example Twitter)
If you are a not so sexy startup, but just a traditional SME intending to grow your business, you can still innovate..
Approximately 6-7% of India’s GDP today comes from small and medium enterprises in India (SMEs) which constitute over 15 million units and employ over 30 million people. SMEs have contributed to over a third of India’s exports consistently over more than a decade. SMEs are often beset with resource constraints that put them at a disadvantage to larger competitors who can better afford investments in innovation and R&D.
To bridge this gap, Department of Science & Technology, Govt. of India’s Technology Information, Forecasting and Assessment Council (TIFAC) has embarked on Technology Vision 2020 in the year 2000, and has taken several key emerging areas under the “Umbrella Scheme on Technology Vision 2020 Projects in Mission Mode”:
- Agriculture and Agro Food Processing Sectors
- Health Care Services & Herbal/Natural Products
- Mission REACH
- Road Construction and Transportation Equipment
- Technology Development / Up gradation of Textile Machinery, Processes & Products
- Technology Upgradation of Select SME Clusters
- Pottery
- Synergizing S&T with Judicial Processes
- Bioprocesses and Bioproducts Programme
TIFAC invites proposals from SMEs under the above programs and offers R&D support and financial help to SMEs such as providing 50% of project cost, excluding land and building, as soft loan with a moratorium period of 6 months for the Healthcare & Herbal/Natural products. Browse all sectors here. Read about the Effective public – private partnership for innovation – an Indian experience
I aim to continue to feature other exciting sectors such as fashion retailing, education, renewable energy in future.
Arifa Khan, Founder of Genius Incubator Limited, has five years investment banking experience in London specializing in Private Equity sponsored Leveraged Buyout deals, and has worked for two Swiss banks Credit Suisse and UBS. She was most recently Vice President, Leveraged Finance and High Yield, Europe.
Prior to her investment banking stint, Arifa worked in Mumbai in the financial services sector. She is excited about sectors such as luxury goods, fashion, media and entertainment, healthcare, and education, and is passionate about initiatives to encourage and unleash entrepreneurial ambitions in the young. She is also an amateur fashion designer, painter and writer.
Services Offered by Genius Incubator
Genius Incubator has an extensive network of the brightest minds and offers the following paid-for services to Start-ups and Small & Medium enterprises
Raising early stage and growth stage capital for entrepreneurs
Mentoring and Advisory services for incubatees
Market Research / Feasibility Study
Idea Architect
Business Plan Creation
Advisory Services (on setting up a new company)
New Product Launch Strategy
Marketing & Communications Strategy
