Within 18 months of its foray into China, Oyo established its presence in 337 cities, through 10,000 Oyo-branded hotels with a staggering 5,00,000 rooms. Oyo has done what very few have been able to accomplish—taking on the Chinese in their den. What makes their story even more remarkable is the success they have had penetrating successfully into China, reaching tier 3, tier 4 cities and beyond.
India’s Ola Cabs just bagged a private hire vehicle (PHV) operator licence for Greater London, expanding its U.K. footprint to seven cities and counting.
Freshworks, founded by Girish Mathrubootham and Shan Krishnasamy in 2010, has over 150,000 clients worldwide including the NHS, Honda, Rightmove, Hugo Boss, Citizens Advice, Toshiba, and Cisco.
BYJU’s is today regarded as one of the most valuable edutech companies globally.
And I can go on and on about Indian startups—both B2B and B2C—making a global mark. The likes of Oyo, Ola, Byju’s, Avaamo, Telr and Infoworks have all ventured into diverse markets, both developed and the developing ones.
Hence, the question is not whether we can produce global startups or not, but whether we can create the next set of companies that will lead the digital era? That should be the Indian ambition. And it’s an ambition that is definitely within our reach, but not if we continue with status quo.
Arguably, the first block that needs to be addressed is effective policymaking favourable to innovators and risk-bearers. Emerging as these technologies are, they require leg-room and it’s crucial that propagation precedes regulation. The burden of a punitive regulatory framework will only constrict innovation and clamp down rapid adoption. Insofar, these ventures are highly risky and the need for patient capital couldn’t have been more acute. The interest level of angel investors is on the wane, in comparison to venture capital funds and private equity investors, and this needs to be looked into. The recent waivers in the angel tax provision is most encouraging, but can we abolish it altogether without impeding the exchequer?
I am not suggesting that we act irrationally and throw caution to the wind. But we cannot hold back innovation and advancement because of the risk of misuse by a few.
We also need some bold steps in the regulatory landscape. The criticality of data brings to the fore a pressing need to deliver on a comprehensive data strategy. Data is the lifeblood of emerging technologies and if we continue to treat it in a cavalier fashion, we will soon be staring at profligacy. India needs a ‘National Data Strategy’ that sets a clear and bold vision for making India a world-leading data economy.
A major push is on the cards. The government has set up e-marketplace (GeM) about two years ago as a one-stop shop for procurement of goods and services by various ministries. It is still in an exploratory phase when it comes to buying from startups, but the initial responses have been very positive—a few startups have testified. It’s a great opportunity to kick-start tenfold growth in the domestic sector if the government decides to buy from startups in a big way. Most get rejected in the bidding process itself due to stringent criteria. This is an area which needs looking into.
The recently Cabinet-approved National Policy on Software Products is expected to foster an environment of IP creation. On cue, the guidelines on Machine-to-Machine communication and the policy on drones will have to be revisited periodically to ensure that they stay relevant in an environment which is frenetically paced. To cut a long story short, policymaking cannot be a static affair.
Next we come to infrastructure. One of the great learnings from the Silicon Valley is the clustered approach and how it has been used to build highly efficient networks. Despite being in the post digital era, it still makes great sense to have all ecosystem players within a radius of say 10 kilometres. Now, the Valley happened in an altogether different time and place, and I am not suggesting that we copy that model blindly, but perhaps we can look at smaller and vertical-specific clusters. Actually, the Software Products policy does have a provision towards this, and it gives me great confidence that we can see it through. The need for increased investments in incubators, accelerators, testing labs, co-working spaces and access to quality data, has to be amplified. Here, state governments can play an active role by partnering with private players, to create a level playing field where the latter are adequately rewarded in a timely manner.
The on-premise model is getting replaced by SaaS and Cloud architecture. Cloud spending in India is estimated to grow by 30% to touch the $7 billion mark by 2022. By then, it is believed that India will become a leading exporter of cloud-based products and account for as much as 15% of the global demand. This is a great opportunity for the government and private players to invest in Cloud infrastructure and shift the operations accordingly to this environment.
Finally, we come to the most important block—talent. India has a vast talent pool which wait in the wings every year to be gainfully employed. I am referring to the 2.6 million STEM graduates that the nation produces annually. And the existing IT workforce of about 4 million people. One, is of course about staying relevant by acing deep technologies. Towards this, NASSCOM’s FutureSkills programme is a veritable addition to the existing re-skilling models, but with a far greater emphasis on employability. Secondly, this talent pool is limited and the big names in IT are eyeing the same. If the startup ecosystem is strengthened, particularly in tier 2 locations, it will ease off some of the load to enthuse young people to work in niche areas, rather than working under big banners all the time. Thirdly, in an ‘experience only’ economy, collaborative mindsets, networks and platform-approach will supersede everything else. Lastly, we have to learn to fail fast, get up quickly and carry on regardless, with renewed vigour and enhanced skills. As a nation we aren’t short on talent or passion but what we lack perhaps is the openness to accept or even celebrate failures.
Let us pave the pathway with the right stepping stones.
Views are personal.
The author is president, NASSCOM.