Even as the world continues to grapple with the covid-19 pandemic, the remarkable resilience of India’s tech industry has been on display, with investments soaring to a mammoth $38 billion. A significant portion of these investments went to software as a service (SaaS)-based companies, which witnessed a major growth brought about by an increasing demand for digital tools and automation amid the current crisis. Unsurprisingly, eight of the world’s 10 richest companies grew and expanded because they are tech companies. The fastest-growing jobs on LinkedIn’s list of emerging jobs globally are artificial intelligence specialist and data scientist. During the covid period itself, Apple, Microsoft, Amazon, Facebook and Google enhanced their market capitalization by over $1 trillion.
India is the youngest country in the world with a vibrant startup ecosystem. In 2019 alone, over 1,300 startups were added, thereby solidifying India’s position as the third largest startup ecosystem in the world. This opportunity did not go unnoticed with private equity investments hitting a 10-year-high in 2019, attracting $17.3 billion and registering a yearly growth of 60.5%. Investor confidence in India has never been higher; India has, in fact, been able to turn the covid-19 crisis into an opportunity by positioning itself as the preferred investment destination.
The strong and sustained growth and innovation in the technology space presents a unique opportunity for India to position itself as the ‘Tech Garage of the World’. Through the development of innovative digital and technology solutions, India can successfully find solutions to the massive and intractable challenges across sectors such as healthcare, education, financial inclusion, modernisation of agriculture and others. The role of government in crafting such tech solutions at scale to tackle these challenges is critical but must be augmented through the nimbleness and creativity of the private entrepreneur. As John Maynard Keynes said in 1926, “the important thing for the government to do is not to do what individuals are doing already and to do them a little better, but to do things that are at present not being done at all”. To rephrase Keynes—the government and the private sector can together do what has not yet been conceived let, alone done, devise solutions that cannot occur in silos and to execute to perfection.
India’s IT/ITeS industry is a global powerhouse, but there is a noticeable dearth of world-class platform companies. The massive $167 billion IT industry mostly comprises companies that provide software services and backend IT support. While there is a plethora of new-age product startups in the consumer internet and enterprise space, the shortcoming lies in the absence of platform companies that can compete with global players. The templates for platform-based models do exist in India, which could serve as the blueprint for the emergence of future platform companies. In fact, National Health Stack and Aarogya Setu were developed envisioning a cohesive future for a healthtech ecosystem in India with public and private participation. The development of Health Stack is an excellent example of the government laying down the building blocks, essential in implementing digital health initiatives, to successfully achieve convergence that can be deployed by both public and private health providers. Perhaps one of the most powerful examples of the potential that India has is the success of the UPI platform in the digital financial inclusion space. UPI, which is just 4 years old, reports 10 times the number of transactions as compared to the decades-old Amex. Our ability to scale up UPI as a global platform could well make it surpass the number of transactions of both Visa and MasterCard in the next few years.
Silicon Valley faces a glass ceiling on innovation. Its innovations like driverless cars are for the developed world. India’s problems are far more complex and provide an opportunity to use tech and innovate at scale. Templates for this already exist and are being developed as we speak. The Prime Minister recently entrusted NITI Aayog with the task of developing technological products in partnership with the private sector, which would enable India to leapfrog in the post-covid era. As a result, seven technological solutions were developed that addressed themes ranging from financial inclusion to healthcare to telemedicine to a digital higher education university; these products are currently in different stages of evolution. The Prime Minister also launched the Aatma Nirbhar Bharat App Innovation Challenge to encourage the creation of world-class made in India Apps. The response was overwhelming. The Atal Innovation Mission (AIM) is driving Atal Tinkering Labs with AI, and robotics and 3D printing are being taught from class VI onwards. AIM also supports incubators and has catalysed a creative and innovative culture.
My belief is that the development of these world-class products requires skilful application of artificial intelligence. This necessitates five critical inputs: flow of data-hungry young entrepreneurs, AI algorithm engineers, computing powers, and AI-enabling policy environment. While India has humongous data, thanks to mobiles and low data costs and top-class start-up entrepreneurs, it severely lacks in product managers, AI scientists, product designers and software engineers. Our IIITs and IITs must be reoriented to produce AI engineers who can partner tech entrepreneurs to launch cutting-edge global tech companies.
The government has a crucial role to play in positioning India as the Tech Garage of the World. It should act as a catalyst, and bring together the synergies of the private sector with the aim of innovating for India and the world. It has the potential to provide an enabling environment and a favourable regulatory ecosystem for the development of technology products and provide the size and scale necessary for their rollout. The product development should ideally be undertaken through private entrepreneurship, with the government acting as a facilitator. The key principles of product design should incorporate transparency, security and ease of access. The products must have open architecture, should be portable to any hosting environment and should be available in official and regional languages.
The irrevocable shift brought about by covid-19 presents opportunities to develop new technology platforms. In this process, data integrity, authenticity and privacy should be embedded into the design of a product. A balance needs to be struck between regulation and product design through a dynamic collaboration between the government and technology entrepreneurs. Going forward, the government should strive to envision a direction for technological change and invest in that direction by creating markets and opportunities that can be seized by willing private sector companies. The collective synergies of the private (creativity, inventiveness and product design) and public (scale, size last mile connectivity) have immense potential to maximize the impact of tech-driven development.
India as a Tech Garage also encapsulates the principles of Aatma Nirbhar Bharat—not just confident, outward-looking and non-insular, but also one that develops indigenous technology solutions at super scale for complex problems. As the world’s Tech Garage, our ability to develop technological solutions for a country as vast and diverse as India will also provide us with the unique opportunity to present a roadmap for addressing the needs of the next 7.5 billion people of the world who will move from poverty to middle class in the next decade.
Amitabh Kant is CEO, NITI Aayog. – Livemint