Only 26,164 patents were granted in India between 2010 and 2014, compared to a staggering 1,275,787 patents in the US, according to the World Intellectual Property Organisation (WIPO). In 2012, 15.5% start-ups in the Silicon Valley had an Indian founder and this number is growing. This highlights a substantial loss of intellectual human resource to India resulting from the celebrated ideology of finding careers and building businesses in the US. Has the lauded career path of getting accepted into one of the IITs and consequently joining an Ivy League institute in the US lost India the incredible opportunity to create Indian innovation at a global scale?

Many Indian start-ups, including Altizon and Axiom Research Labs, have created world-class, unique, unreplicable technologies, known as ‘deep tech’, which have been showcased globally. However, commonly, the Indian entrepreneur creates ideas that are either limited to solving a domestic challenge or adopts and mirrors an existing technology for implementation in the Indian context.

Innovate local, sell global

Do entrepreneurs believe that a local market within India’s 1.2 billion population is large enough to serve their business growth aspirations, or do they fear the unknown, preventing the creation of global, scalable companies? Naturally, deep tech innovations require the early support of investors—investors who have an appetite for risk and patience to witness the rewards of their investment. First-time entrepreneurs Druva and InMobi are positive examples of successful Indian global product innovation.

Indian entrepreneurs’ focus on short-term gains has led to a rise in the number of start-ups that mirror the technology of mature, established companies. Unsurprisingly, the high failure rate of these ‘me too’ companies (PepperTap, TinyOwl) mean they are a less attractive option for investment. With world-class universities like the Indian Institute of Science, the potential to build great, innovative technology is available, but India lags behind due to their talent pool supporting the growth of global companies outside of the country. An alarming 78% of patents filed in India in 2015 were by non-residents. A lack of awareness of the advantages of owning a patent and using it for wealth creation is likely inhibiting growth of deep tech in India.

So, what is deep tech?

Deep tech has put start-up ecosystems on tech radar. Global start-up ecosystems like the US, the UK and Israel are expanding because of their ability to commercialise deep tech. Start-ups in deep tech focus on R&D to build unique, disruptive technologies that are often difficult to replicate, unlike the majority of tech start-ups that function on commonly available technology. Deep tech is based on invention and IP creation of a new product or process that uncovers new market opportunities across industries with different applications of the same underlying technology. It could be a combination of hardware and/or software such as drones, IoT, robotics and AR/VR, among others.

From an investor standpoint, deep tech offers the opportunity to disrupt an existing industry to even spawn an entirely new industry. For example, Sergey Brin and Larry Page invented Google as a part of their PhD research project at Stanford University. Within one year, Andy Bechtolsheim invested $100,000 in Google even though it was just a year old. Why would an investor take such a risk by investing in a company that hasn’t made any money? The answer is his foresightedness about the technology and its future possibilities. The ability and appetite of investors to take a risk on an innovative technology and an inexperienced team has led to the growth of successful companies, including Apple.

Crossing the chasm

The growth rate of the Indian R&D market is burgeoning and was valued at $20 billion in 2015, according to the India Brand Equity Foundation. MNCs like Walmart, Microsoft and BMW moved their R&D into India because of the enormous potential the country has. The Indian education system has produced world-class

Source: The Financial Express