Written by Debasish Mitra, VP Engineering, Mihup
In recent years, we have seen the digital technology grow exponentially in terms of usage and scope. At present, when the world is combating a pandemic, the impact made by technology driven startups has been tremendous. The enablers of digital transformation and SaaS based solutions have been quick and efficient to capitalize on the opportunity. Deep tech is now integral to this flourishing startup segment. A NASSCOM report mentioned recently how 19% of all tech-driven startups in India are already leveraging deep tech innovations to enhance their product offerings and revenue generation. Most prominent among these deep tech areas have been the AI/ML powered startups and they accounted for 87% of all investments in this area in 2020 as per the report.
Deep tech in future
The pandemic created an unexpected disruption and necessitated an urgent access to smart automation and hands-free tech. Today, the buzz is around creation of technologies that are smart, self-monitored, intuitive, personalized and capable improving on-the-go. With over 1.3 billion people to serve, the deep tech solutions have the potential to deliver unlimited benefits in different walks of life. The first quarter of 2021 has been encouraging for the Indian tech startups and the numbers are impressive. India as a country has now achieved 55% digital maturity compared to 34% in 2018. The NASSCOM report on Indian tech startups predicts a 40%-45% CAGR for the deep tech and startup hubs. It is not surprising that investments dipped in 2020, but, now the curve is moving upwards and we are likely to match or even go beyond the 2019 levels despite the pandemic impact. The unicorn club is set to expand and a lot of acquisitions, mergers and IPOs are also in the works for the year ahead.
Deep tech potential in India
Time is ideal for Indian technology sector to bring in the kind of economic prosperity that sustained technical innovation brought to US and Europe in the last couple of centuries. We have several multi-billion dollar startups which are now in the hyper-growth trajectory. In fact, the potential and the work being done by the startups as well as the possibilities that will emerge from the NASSCOM, FICCI and GOI backed startup initiatives are quite exciting. India’s reputation as a global IT powerhouse is already well established and we have the ideal breeding ground for the deep-tech startups. It is crucial to make the best use of the expertise available in the country and develop a digital-first infrastructure in all sectors. The Government of India is already taking dedicated steps and has been supportive of building a digital ecosystem in the country. There have been a lot of encouraging moves in the last two union budgets on this front. The industry, especially the IT sector, is also mindful of it and now the aim is to stack the existing digital infrastructure with innovations that can impact the global markets in the years ahead.
To make this happen, we need to adopt a continuous, collaborative and sustained investment based model with free-to-move third-party partners. If harnessed to its full potential, the Indian deep tech sector can greatly enhance the existing technologies. Under the aegis of industry bodies such as FICCI and NASSCOM, the plan is to build an ecosystem featuring Big Tech – Deep Tech – Academia, and SME sectors. NASSCOM is already moving ahead with its 10,000 startups programme and there is no reason why the number of startups can’t be multiplied to even a million plus.
The power of collaboration
Deep-tech startups are being led in the right channel by the efforts of major enterprises and industry bodies and initiatives such as the Deep Tech Club programme by NASSCOM are crucial to extricate the full potential of the startups. Today, we are witnessing a lot of such collaborations taking place in non-captive development of AI, ML, Big Data, NLP and Blockchain etc. The future will see greater emergence of tech incubators where startups nest their solutions/frameworks and also use the platforms to sell their products.
Such a research cum marketplace ecosystem is going to be a win-win scenario for all. The startups get to generate revenues faster and also to use the deep-tech platforms as R&D facilities. The clients get faster and better solutions within the network, and the platform can offer services on a pay-per-use model through the reusable assets provided. This is how companies can make the most of their Capex and Opex investments and even the startups with negligible financial resources can use the same level of tech to build solutions as available to the bigger brands. This kind of deep-tech driven framework is the future for Indian tech startups — and the future is definitely bright!