Still waters run deeptech: Why India should bet heavily on its deeptech startup ecosystem
November 17, 2022, Updated on : Thu Nov 17 2022 12:16:24 GMT+0000
Quietly yet surely, India’s deeptech startups have taken the world by storm, by proving they are at the cutting-edge of innovation. They have been growing and leveraging disruptive technologies such as AI/ML, NLP, and blockchain to fast solve for many socio-economic challenges like clean water and energy, hunger, climate change etc, on top of enabling all sectors from BFSI to IT to drive ahead India’s $5 trillion economy goals.
Backed by digital talent and research, deeptech startups are showcasing their innovation through the development of new products along with intellectual property rights. This is a vast and growing ecosystem of companies that are doing combinatorial work – essentially science-driven, with AI/ML as one of the key areas – for a broad range of applications. As of 2021, India recorded around 3,000 deeptech startups, accounting for 12 percent of the country’s overall entrepreneurial ecosystem. Of these, roughly around 500 are truly inventive - in terms of having patented solutions and a higher share of employees with deeptech skills. But is this number nearly enough for this section of the ecosystem to actually reach its potential and the scale of impact it can have? And what’s holding them back?
The problem is not the access to skilled talent. With 1.6 million+ digitally skilled talent, India today is one of the largest destinations of highly skilled STEM talent base. Patient capital, understanding of the technology, and timing are the most critical elements of deeptech financing. Investors in this domain need to have a strong understanding of deeptech, so they can truly appreciate its lifecycle and support the startups with a co-creation mindset. Academia and corporates can act as enablers in providing research guidance and opportunities for commercialisation of products and services. And finally active support from the government in providing regulatory support and ease of doing business becomes equally important for the sector’s growth in India.
The good news is that none of these problems are impossible to solve. With immediate action, the ecosystem can achieve incredible results for deeptech startups. Some of the ways the industry can fill existing needs are:
1. Building framework for evaluation and patient funding: Deeptech VCs need to build custom framework for evaluating products and technologies. VCs also need to invest the necessary dry powder in deeptech startups in the form of patient capital for an extended gestation period.
2. Collaboration with academia: Most talent in deeptech startups comes directly from leading technology institutions in India. Introduction of new and focused curricula would help in developing select skill sets for bridging the talent gap at an entry level. Further academia-corporate collaborations with flexible tech transfer policies can lead to the idea getting the best of both worlds. The USA is a brilliant example. The country’s deeptech-focused investors, universities, knowledge sharing ecosystem, and translation of patients into products have contributed significantly to the country’s rich deeptech ecosystem.
3. Support industry-specific world-class innovation clusters: Focused efforts to bring together industry, academia, corporates and startups into specific clusters will deliver strong compounding interest for the sector. Focusing on solving problems that fulfill SDGs for India can become a strong case in point to develop an India-specific model for the deeptech ecosystem. Israel has set up multiple CoEs as well as its innovation derived from academic and defense-related R&D has helped them create a niche in technologies like semiconductor, quantum computing and space tech.
4. Market access and POC-led engagements with corporates: By virtue of their nature, deeptech startups take longer time to market. Setting up POC support programs to explore global markets will provide the confidence boost to Indian deeptech startups in the long term.
5. Policy support: Targeted policies and strategies from the government will also help in identifying and creating a roadmap for deeptech implementation across sectors.
The growth of deeptech startups is going to be essential to India’s trillion-dollar economy roadmap. As a nation, we need to significantly amp our focus and commitment to growing this sector. It is what will make or break our ability to drive world-class From India.
The author is Senior Vice President and Chief Strategy Officer at NASSCOM.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)