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India Needs to Boost R&D Spending to Be Globally Competitive: DRIIV CEO

© AFP 2023 MANJUNATH KIRANIn this photo taken on January 10, 2017, founder of startup company Hacklab.in Vikram Rastogi works in his office in Bangalore.
In this photo taken on January 10, 2017, founder of startup company Hacklab.in Vikram Rastogi works in his office in Bangalore. - Sputnik India, 1920, 26.01.2023
Despite being one of the most prominent countries in terms of start-ups, India faces a stern challenge as the number of failed startups in the country remains high.
The Indian government recently launched the Delhi Research Implementation & Innovation, or DRIIV, initiative in order to facilitate and support enterprises’ commercialization and go-to-market strategies.
The initiative aims to help organizations accelerate the transition of product/technology from laboratories to consumer markets.
In an interview with Sputnik, DRIIV CEO Shipra Mishra explained the evolving start-up ecosystem in the country and how innovation could be taken to the mass market.
Sputnik: India has emerged as one of the most prominent countries for start-ups. What reasons do you see behind such a vibrant start-up industry in the country?
Mishra: The start-up ecosystem was waiting to happen as it is technology-related, and with the advance of technologies, it was bound to evolve. Obviously, Silicon Valley led the way, then the UK and the rest of the world joined the bandwagon. Then gradually as the venture capital (VC) ecosystem evolved; they [start-up entrepeneurs] obviously see India as a big market.
The reason behind this is that the US is fairly self-contained. And even outside the US, if you look at the UK or other countries, the geographies are fairly limited.
So, they need a large market. And India is obviously a large market and a large tech talent pool. For example, Bengaluru has become the hub of tech talent.
So, these two things combine to make a good enough use case for any venture capitalists to come and invest in India.

Along with this, research-based technology by institutes like IITs and others, along with progressive government policies and economic development, have played a crucial role in the evolution of a start-up ecosystem.

So all the ingredients are there, it was just a matter of time before people had confidence, VCs had confidence to start investing and I think that that curve has been kind of scaled now.
Sputnik: Despite so many start-ups emerging, the increased number of failed start-ups remains a major challenge. What are the reasons that start-ups fail?
Mishra: It’s the nature of the beast. The start-up ecosystem is such that there can only be a handful of success stories. We have the habit of thinking in terms of unicorns (start-up of over $1 billion). We do have enough unicorns, but not every success story becomes a unicorn.
Then some people go a long way, they make good-enough businesses not to be scaled up to the level of a unicorn but to the level of a profitable business that they are able to sustain.
If you talk about what can be done to facilitate the journey, we can create an ecosystem (industry) which is more conducive to support these start-ups. But because of the nature of the beast, there are going to be valleys of death in between, right from the idea stage to creating the first prototype.
Then the ancient kind of scene is required, angel investment* is required and I feel a number of angel groups have come up in India and more should come, of course. But I feel like we are much better now than ten years ago.
Even if you look at the US start-up industry or the UK, the success rate is very low.
Sputnik: Start-ups are more about innovation. So, what in your opinion can be done to ensure that innovations don’t only remain a good intention but they bring impact on the ground? What should be the roadmap for innovators to bring their innovations to the mass market?
Mishra: Right now, growth in the Indian start-up sector that we have seen has mainly been in terms of digital start-ups, where a kind of existing business model is there and what they have done is digitalize it.
For example, food delivery start-ups, product delivery start-ups, and grocery delivery start-ups have come up.
Now, Fintech [financial technology] is the next area that is seeing a lot of growth and ultimate maturity, where a lot of credit card companies or short-term financing start-ups are coming up.

What really needs to happen is that we need the kind of start-ups that address India-specific problems, both environmental as well as societal problems, like in the area of, for example, waste management or air pollution. They need to be more science-driven and more solution-driven.

Many start-ups in the education sector have also come up, but again, the gamut of services that need to be provided in the education sector needs to expand.
Right now, [they are at] the first level where the beneficiaries are individuals and it’s more like a desire than a necessity.
Therefore, when you expand the use case to beneficiaries being greater society, a lot of bodies become interested in those services.
So, for example, when you're looking at government or public bodies or the corporate sector as a market, you are looking at society as a market.
Therefore, these kinds of cases need to be expanded to the copied business model of the US business model, that is based on science and technology that are actually addressing some real-life problems.
Sputnik: There are a lot of incentives being provided or initiatives taken by the federal government for start-ups. Do you think that the onus only lies with the government or does there need to be a larger collaboration like community engagements to address immediate concerns related to start-up culture in the country?
Mishra: Yes, the government has done a lot in terms of facilitating the start-up journey and in terms of seeing that incorporation is quite smooth. But in terms of creating the market, obviously private players need to come.
So, firstly, there needs to be many more enablers. We do have a kind of vibrant ecosystem of accelerators and incubators. But we need more of such bodies which are empowered and grounded to actually facilitate connects with the industry where the corporate sector can come and partner with these start-ups to help them get more market coverage.
From the government side also, there needs to be similar efforts. Wherever there are needs, there should be a proper channel for the start-ups to come and implement or deploy their solutions with them.
For example, [this can be seen in] one of the pilot projects that DRIIV is conducting with a couple of government bodies in and around Delhi-NCR. We are implementing a project SAMEER which is Solutions for Air Pollution Mitigation through Engagement, Engineering and Research.
We are executing a pilot project with Gurugram Metropolitan Development Authority (GMDA) and the Delhi Pollution Control Committee (DPCC). One of the prominent features of the pilot project is science and technology intervention.
Around 15 startups from across India have come and offered their solutions for free. Their solutions range from monitoring air pollution to mitigating solutions.
So there's a range of solutions that can be deployed to bring down PM 2.5 and PM 10 (air polution) levels.
There will be a period of time when these deployments will happen and independent validation of these technologies will be done by experts from the Indian Institute of Technology in Delhi and a report will be submitted to government agencies saying that this is how these solutions have performed.
After that, it would be up to the government to either adopt those solutions, the ones that have worked successfully, or for private participants can come in, for example, the CSR arms of the corporate sector and support those technologies through their CSR funding.
As of now, some of our start-ups which are part of the project have already received either government funding or CSR funding.
So, these kinds of initiatives, although at a small scale and on a few-month basis, are being taken up and more such efforts need to be done where there is a collaborative effort, a public-private partnership, based on real-life cases where these start-ups can manage to perform.
Sputnik: What role does DRIIV play in enabling the start-up sector? What are the focus areas? What are the key interventions?
Mishra: So basically, DRIIV has been created to build the ecosystem; not just start-ups but the innovation ecosystem, which includes lab research. So, we work with most of the premier institutes within the Delhi-NCR region, IIT Delhi thing the nodal organization, other organizations include institutes like the All India Institute of Medical Science (AIIMS), the Energy and Resources Institute (TERI), government CSIR labs, Delhi University and private corporations as well, that can come together and support innovations going from a lab to the market.
So DRIIV is creating this platform where all these different stakeholders can come and start joint efforts for environmental and societal relevance.
Then, there is the pooling of resources and expertise. So, if any start-up requires access to any research facility. For example, there is an EV (electric vehicle) start-up that is looking for a lab that is well-equipped in experimenting with EVs or looking for experts, DRIIV can facilitate that access.
DRIIV can also help in facilitating them in showcasing their products or solutions to the government as we have an umbrella MoU (memorandum of understanding) with various government bodies.
The third aspect is creating a kind of funding mechanism for them. So we have partnered with institutes like the India Health Fund that can support and fund healthcare-related start-ups. We have tied with Central Park, which is now interested in creating a corporate-backed accelerator that can not only provide funding to relevant start-ups, but also the entire incubation and acceleration facility, including workspace.
So, these are the kind of things that DRIIV is pooling together to facilitate the journey of these start-ups.
As far as focus areas are concerned, we are aligned with the national missions that are relevant for the environment. We also have eight thematic areas.
First is 'waste to wealth', where we look at fuel from either municipal solid waste or agri waste. Second is water security, which is looking at things like desilting existing water bodies, refreshing water reservoirs, then recycling industrial wastewater and making it more usable.
Then, we are dealing with air pollution which is a third vertical. Fourth is the use of AI and ML in healthcare. Fifth is e-mobility under which the Delhi government has already adopted the One Delhi app, which DRIIV created with one of its member organizations, IIIT Delhi. The Odisha government has also adopted it now. It is for digitizing public transport.
Then we have effective education, where we have the entire network of universities and schools in the Delhi-NCR region through whom we can create a lot of impact via information, education and communication (IEC) activities.
Sputnik: Why do you think there was a need for the government to form a cluster of science and technology?
Mishra: These types of technology clusters are not a new concept. They have been there from 30-40 years in the Western system. Why do you think the US is where it is in terms of innovations? Silicon Valley is the biggest cluster.
So, why success happened and why that kind of thing exploded is because local geographic factors were there and expertise was pooled together. Therefore, a system got created and expertise was pooled together, which acted as a catalyst for attracting more capital and more tech talent.

Although Silicon Valley is not the only cluster, there are multiple other clusters that exist across Europe. These clusters have played an instrumental role in bringing people together, coming up with collaborative projects, and ideas which led to exponential growth in the region.

So given India's story, investment in research and development (R&D) in the country is abysmal. It is less than one percent. It is around 0.7 percent compared to the global average of three percent and some of the countries which are very aggressive in terms of R&D expense are spending around five percent of their GDP.
If India wants to become globally competitive (because our economic success is determined by our technology success because now, going forward, we can't avoid leveraging technology - and it's not just technology but rather science based on R&D technology) then we need to boost R&D spending.
In order to boost it, these formal science and technology clusters were required, otherwise there will be no platform. A lot of work was happening in silos. Academia collaborations were happening but the impact was fairly limited because it's only bi-party engagement. There was no platform where multi-party engagement could happen in which local public bodies, the corporate sector, start-ups, MSMEs can come and work together.
For example, recently a green hydrogen mission was launched. In the absence of these science and technology clusters, it would be impossible to deliver on such missions that require multi-party stakeholder engagement.
So, there needs to be some umbrella body that can drive these kinds of initiatives.
*Angel Investment is done by wealthy private investors focused on financial small businesses in exchange for equity. They use their own net worth to finance the businesses whereas venture capital investors are employed by a risk capital company (where they invest other people's money)