Shifting India’s Startup Focus from Consumer Apps to Deep-Tech Innovation
The Need for a Paradigm Shift in India’s Startup Ecosystem
India, renowned for its low-cost data and thriving app development scene, is at a crossroads. A top marketing professor recently emphasized the need for India to aspire towards building industry giants akin to Tesla, Huawei, and TSMC. This conversation gained momentum following comments by Commerce Minister Piyush Goyal, who criticized the current trends in India’s startup ecosystem.
Consumer-Tech Successes and the Emerging Digital Economy
Rajendra Srivastava, a distinguished marketing strategist often referred to as India’s Philip Kotler, posited that while the past decade has witnessed remarkable successes in consumer tech, it is essential for India to advance beyond quick-service applications. To establish itself as a genuine technology leader, the nation must deepen its capabilities in science and engineering.
Time for Deep-Tech Industries
Although consumer technology has prospered, Srivastava advocates for a strategic pivot towards deep-tech sectors. These include artificial intelligence (AI), electric vehicles (EVs), clean energy, robotics, and semiconductors—fields that demand extensive research and development (R&D) and “patient capital” for long-term results.
The Challenge of Long Gestation Periods
According to Srivastava, unlike a food delivery app that can reach scale within a year, ventures in deep-tech like battery chemistry or semiconductor fabrication often require 5 to 10 years of sustained investment before yielding observable results. This reality conflicts with the rapid returns that many investors in India have historically pursued.
Investor Mindset and Deep-Tech Ventures
Deep-tech startups are typically characterized by higher technical risks and uncertain immediate profits. Hence, early-stage financing must be prepared for more extended wait times for returns.
The Gap in Long-Term Funding and Policy Consistency
Srivastava highlights that historically, India has struggled with a lack of patience, enduring funding mechanisms, and consistent policy frameworks conducive to deep-tech innovation. Most private venture capital has favored less capital-intensive models that promised quicker growth, leading to an influx of consumer platforms while hardware and scientific enterprises face funding challenges.
Learning from Global Powerhouses
He cites China as an example of effective governmental support, referencing initiatives such as “Made in China 2025” and the “14th Five-Year Plan,” which identify strategic sectors and provide unwavering backing through funding and infrastructure.
India’s Unique Approach to Technology Investment
Contrastingly, India’s approach has been relatively hands-off, concentrating on improving business conditions and digital frameworks without actively directing investments into specific high-tech fields. Until recently, initiatives for manufacturing and R&D have often been sporadic or merely half-hearted efforts.
The Promise of New Policy Initiatives
In the last few years, the Indian government has taken a significant step by drafting a National Deep Tech Startup Policy. This policy aims to offer long-term funding, an intellectual property framework, and regulatory environments conducive to the growth of deep-tech firms.
Initial Steps in the Right Direction
While these developments represent promising beginnings, Srivastava argues they are overdue. India is now just starting to establish the policy framework that countries like China have cultivated over decades. Policy consistency, he insists, is as vital as available capital in the deep-tech arena.
Critique of Consumer Focus by Government Officials
At the recent Startup Mahakumbh, a government-led startup event, Piyush Goyal openly criticized the predominant focus of Indian startups on lifestyle products. He highlighted that while India’s startups are creating food delivery and artisanal brands, their counterparts in China are innovating in fields like machine learning and robotics.
A Call to Action for India’s Startups
Goyal’s remarks may have triggered discomfort within the startup community, but they underscore a critical truth: in light of India’s achievements in low-cost data and app development, the country must focus on addressing more complex issues and pursuing larger technological prizes.
Preparing for Future Waves of Innovation
Srivastava notes that the global technological landscape evolves in S-curve cycles. While India has excelled in some areas, it has missed earlier crucial waves, such as semiconductors and electronics manufacturing. The upcoming trends in AI, clean energy, space, and advanced manufacturing present another opportunity to ascend the technological ladder.
Finding Balance Between App Convenience and Deep-Tech Complexity
To ensure a robust future, Srivastava advocates for a recalibrated strategy that acknowledges both the convenience of consumer apps and the intricacy of deep-tech innovations like silicon chips.
A Vision for India’s Technological Future
In conclusion, while consumer applications have significantly contributed to India’s current economic landscape, deep-tech innovation will shape its future trajectory. By establishing a better equilibrium—tilting favorably towards deep-tech—India can position itself as a formidable technological and economic superpower in the coming decades.
Questions & Answers
- What industries should India prioritize for deep-tech innovation?
India should focus on artificial intelligence, electric vehicles, clean energy, robotics, and semiconductors.
- What is the major challenge for investors in deep-tech startups?
Deep-tech ventures require longer wait times for returns on investment compared to consumer apps.
- What role does government policy play in deep-tech development?
Consistent, long-term government policy is vital for fostering an environment conducive to deep-tech innovation.
- How does India’s approach to startups differ from that of China?
India has traditionally adopted a hands-off approach, whereas China actively steers investments into specific high-tech sectors.
- What is the significance of Goyal’s comments on consumer startups?
Goyal’s critique emphasizes the need for India’s startups to address more complex technological challenges rather than focus solely on consumer-oriented products.
