By Ayushman Baruah and Tushar Goenka
The tech industry sees government’s digital push as a viable proposition to boost technological innovation and digital advancements to fuel India’s growth in this decade of technology, also referred to as ‘techade’.
Prime Minister Narendra Modi said on Monday that Digital India initiatives have spurred the growth of startups in the country with a lot of talent coming from tier II-III cities. The government is focusing on technologies, such as 5G, semiconductor manufacturing and optical fibre cables, to bring about the digital revolution at the grass-roots level. “We are ensuring that optical fibre reaches each and every village until the last mile. I am fully informed that the dream of Digital India will be attained through rural India,” he said.
Industry experts believe that with the right assistance, India can indeed become the technology hub of the world. “Indian technology companies and startups are ranking high-up in the world, and the growing number of unicorns are a shining example of our progress over the years. A collaborative industry-government association is helping bridge gaps in digital talent, innovation by setting up CoEs, deployment of emerging technology and policy changes are helping the economy flourish, innovate and progress,” Nasscom said in a statement.
Startups have been investing in research and development (R&D) in India to spur growth. Ola Electric, which just launched its new electric two-wheeler and aims to introduce a premium electric car by 2024, claims to be investing heavily in core technologies to make in India, for the world. A bulk of these technologies are being developed at Ola’s internal R&D facilities.
Last month, the company promised to invest $500 million in developing its own cells, used in electric vehicles (EVs), at Ola’s battery innovation centre (BIC) in Bengaluru. “We genuinely believe we can make India the EV hub of the world…the EV revolution around the world is just getting started, just a few years in. For India to lead this change, we have to, as an industry, invest now, invest aggressively, invest at scale. And not just invest into selling products made elsewhere, or only manufacturing products but genuinely doing the core R&D, or the anusandhan behind all of this,” said Bhavish Aggarwal, founder and CEO of Ola.
IBM India was the second-highest contributor after the US, with 930 patents being granted in 2020 to its employee inventors in the country. The technology major said its employee inventors worldwide received 9,130 patents in 2020 and topped the US Patent List for 28th consecutive year with innovations in artificial intelligence, hybrid cloud, quantum computing, and cyber security.
Filing of intellectual property (IP) patents in India rose 30% in the last five years while the number of patents granted during the same period almost tripled, according to the Economic Survey 2021-22. The survey noted that 58,502 patents were filed in India in 2020-21, up from 45,444 in 2016-17. To be sure, the survey pointed out that the number of patents granted in India remains a fraction of China, the US, Japan, and South Korea.
A large part of this technological growth is also coming from the tier II-III cities as companies look beyond the saturated markets. Indian IT services firms like Tata Consultancy Services, Infosys, Wipro, HCL Technologies, and Tech Mahindra are increasingly looking to tap the nascent talent pool from smaller towns to drive the next phase of their growth.
Modi also said that currently, 40% of the global real-time digital financial transactions are happening in India. Sandeep Patil, partner, head of Asia – QED Investors, a fintech-focused venture capital firm, acknowledges that while the pace of innovation is high, the Indian regulators can take further steps to accelerate the fintech push. He said that primarily, the government should aim to convert savers into domestic investors by providing tools and techniques to invest in alternate asset classes and go beyond the mindset of parking money in savings accounts.
“Also, simplifying the mechanisms on the foreign capital and from where it can come into India, the kind of rules, restrictions and implications need to be clearly mentioned so it becomes a level-playing field and there is a clear idea on how to go about investment plans. There are efforts on this front but some more clarity would be appreciated,” Patil explained.