Nurturing Startups As Engines Of Economic Growth And Job Creation

Startups play a very important role in economic growth and employment creation. They also drive innovation and create fresh competition for the incumbent firms, thereby lowering costs and enhancing efficiency.  As these startups grow, they contribute significantly to the economic dynamism of the cities and regions they inhabit, attracting more firms to these regions and creating a virtuous cycle of innovation, economic growth and employment generation. We just need to look at how Infosys transformed Bangalore, Microsoft transformed Redmond and Google changed Mountain View to understand the multiple impacts that startups can have on the economic growth of cities and regions.  As they grow and become public, they also generate immense wealth for their employees and shareholders.

How can a developing country like India benefit from nurturing startups? As a nation grappling with the issue of employment generation for the masses, we must realize that most of the new employment has to be created by the private sector. It is in this context that promoting startups, and entrepreneurship in general, can play a crucial role in our economy. However, how strong is our startup ecosystem and what policies are needed to make it grow further? Some estimates suggest that today, India is home to close to 50,000 startups from just around 7,000 in 2008. In terms of the size of the ecosystem, we are the third largest in the world, next only to the US and China. As per a study by NASSCOM and Zinnov Consulting, during the last five years alone, around 7,500 technology based startups have been incepted and the overall startup base has grown at a rate of 12-15% during 2018. Total investment into startups has also grown sharply to $4.2 billion in 2018. India is now home to 18 unicorns, startups with a valuation of over $1 billion. Eight of these unicorns have been added during the last year alone. These startups have directly created around 40,000 new jobs during 2018 with the indirect jobs created estimated at around one lakh. The main verticals where a majority of the technology driven startups are emerging include enterprise software, FinTech, e-commerce marketplaces, HealthTech and EduTech. Advanced technologies driving the expansion in these verticals include data analytics, AI, IoT, Blockchain, and AR/VR.  

There are some key features of the fast evolving startup ecosystem in India. Contrary to popular perception, over 40% of the new startups are being incepted outside the main metros in the country, though Bangalore, Delhi NCR and Mumbai continue to lead as the main startup hubs. However, newer hubs like Jaipur, Trivandrum, Chandigarh, Ahmedabad and Pune are fast emerging. To support the growth of startups, over 200 incubators and accelerators are active across the country, supported by the industry, educational institutions and governments. There has also been a significant rise in international exchange missions, allowing the homegrown startups to expand globally.   

What are the key drivers behind the growth of the startups in India? India is the world’s fastest growing major economy with a growth rate of over 7% and has an internet user base of over 56 crores, which is second only to China in the world. A fast growing economy combined with a large internet user base is opening up unprecedented opportunities for technology focused startups to grow with innovative products and business models. It has also attracted huge funding for the startups. Increasing digitalization in the government through initiatives like the Digital India programme and policies focused on financial inclusion are also driving growth in this sector. The growing number of incubators and accelerators across the country has also helped the startups to get mentor support, tap various sources of funding and develop linkages with the industry.

Initiatives like Startup India have helped the sector through tax exemptions and easy access to financing. Over 20 states have their own focused policies for supporting the startups in their states. These policies focus on mentorship, setting up institutional structures to support the startups, developing partnerships with the industry, online accessibility and improving the ease of doing business. Some states like Karnataka have specific policies to encourage women entrepreneurs.

How can our startup ecosystem grow further and become more competitive globally? To achieve this objective, some specific initiatives must be taken. Early stage startups face two key problems: that of access to finance and markets. Institutional support, both by the government and the private sector, must be strengthened to address these twin issues. Government must also encourage procurement of good and services from the startups by its departments and organizations. Startups should also be supported for obtaining quality certifications, testing, patent filing, etc. at affordable costs. Finally, the governments and the industry must work together to strengthen the growing ecosystem of incubators and accelerators to provide well-developed toolkits, focused training programmes, access to funding, industry linkages and a well-connected network of mentors. With quality institutional support from the government and the industry, startups can certainly contribute much more to innovation, economic growth and employment generation in the country and become competitive globally.

(The above article was originally published on May 6, 2019 in DT Next. It is available at: https://www.dtnext.in/News/Business/2019/05/06005513/1116987/Nurturing-startups-as-engines-of-economic-growth-and-.vpf).

Foundation for a Future India: Digital India

India today ranks amongst the largest economies of the world and has become the fastest growing large economy. However, it is still a lower middle income country in terms of per capita income with substantially high levels of poverty and deprivation and significant regional imbalances in development. The vision of a future India must aim at holistic development in all sectors of the economy and society so that overall human development and quality of life is improved in the country.

Can technology led transformation lay the foundation of a future India?  In this article, I examine this central question with reference to the recently launched Digital India programme of the Government of India that aims at transforming the country into a digitally empowered society and knowledge economy. The programme weaves together a large number of ideas and thoughts into a single, comprehensive vision so that each of them is seen as part of a larger goal. The focus of Digital India is on being transformative – to realize IT (Indian Talent) + IT (Information Technology) = IT (India Tomorrow) and on making technology central to enabling change.

This futuristic vision of the programme is centred on three key areas, namely, digital infrastructure as a utility to every citizen, governance and services on demand and digital empowerment of citizens. The idea is to transform the entire ecosystem of public services through the use of information and communication technologies (ICT) and build holistic capabilities across a wide range of sectors, e.g., ICT infrastructure, e-governance, software services and delivery platforms, electronics manufacturing, Internet of Things (IoT), IT skills and job creation, etc. The focus is on making ICT as a key driver for transforming every sector of the economy and society. In order to achieve this futuristic vision for a developed India, Digital India focuses on several key developmental strategies. These include promoting investments through improving ‘ease of doing business’, encouraging entrepreneurship across various sectors through leveraging IT, capacity building and creation of jobs in the IT sector, providing easy access to public services anytime from anywhere, promoting financial inclusion through mobile banking and micro ATMs, promoting literacy through e-books and other digital contents, faster services and dissemination of information to promote growth in diverse sectors such as agriculture, education and healthcare, and encouraging more participation from women in various sectors of the economy and society. 

In order to lay the foundation for future India, Digital India has identified nine key pillars of growth areas. These include broadband highways, universal access to mobile connectivity, public internet access programme, reforming government through technology, electronic delivery of services, information for all, electronics manufacturing, IT for jobs and early harvest programmes. The pillars provide a number of specific targets and activities within those growth areas so that the concerned sectors can benefit from IT enablement.  The figure 1 below depicts the nine pillars of the programme.

Figure 1: The nine pillars of the Digital India Programme

The first pillar on broadband highways aims at expanding high-speed connectivity to all 250,000 village panchayats in the country and ensuring high-speed internet access for all.  It also aims at creating a National Information Infrastructure to provide cloud infrastructure and next generation network services to connect all government institutions and service delivery centres up to the village level.

The second pillar on universal access to mobile connectivity aims at expanding mobile connectivity across the entire length and breadth of the country by covering all the over 55,000 uncovered villages. The third pillar on public internet access programme aims at universalizing internet access through an expanded network of 2,50,000 common service centres, one in every panchayat. The 1,50,000 post offices are also proposed to be converted into multi-service centres.

The next two pillars on e-governance aim at holistic transformation of governance and delivery of public services through the use of ICT. Comprehensive government process reengineering (GPR) would be made mandatory in every domain before deployment of ICT to improve delivery of services. Use of common platforms such as online authentication through Aadhaar, Mobile Seva for mobile phone based delivery of services, Digital Locker for online storage and sharing of government issued documents, online and mobile payment gateway, adherence to uniform standards and guidelines across multiple applications and databases and single sign-on mechanism for seamless navigation and access to services across multiple government portals would be encouraged to ensure integration of services and their interoperability. The recently approved e-Kranti or the National e-Governance Plan (NeGP) 2.0 framework has expanded the number of Mission Mode Projects (MMPs) in e-governance from 31 to 44 and covers every possible domain providing citizen and business-centric services. This plan covers all central government departments and all states and Union Territories (UTs). To enable the implementation of these e-governance projects using common platforms and to ensure interoperability and integration of services, the Government of India has already approved a slew of policies that include policies on adoption of open source software, open Application Programming Interfaces (APIs), e-mail, use of IT resources, collaborative application development and application development and re-engineering guidelines. Ensuring cyber security is a vital part of the entire strategy. Futuristic technologies such as Internet of Things (IoT) would also be mainstreamed in the relevant sectors in future. Use of social media, mobile, cloud platform and analytics form the key components of the overall strategy.

The sixth pillar on information on all aims at facilitating open and easy access to information for all and pro-active engagement with citizens through social media. The government’s open data platform (data.gov.in) has the vision of sharing all publicly available government data through a single portal that can be used by the developer community to develop apps for various purposes. MyGov.in platform engages with citizens to obtain their inputs and ideas on various governance issues.

The seventh pillar on electronics manufacturing has set a very ambitious target of net zero imports in the electronics sector by 2020. It is estimated that the total size of the electronics sector in the country would be worth around US$ 400 billion by 2020. In the absence of any policy interventions, India would need to import almost US$ 300 billion worth of electronic goods and components by 2020. In order to encourage domestic manufacturing in this sector, a range of measures has been announced by the government. These include subsidies on investment and elimination of cost disadvantages through rationalization of the duty structure to promote domestic manufacturing. The focus areas in this sector are fabs, fab-less design, set top boxes, mobiles, consumer and medical electronics, smart energy meters, smart cards, etc. There is also a huge emphasis on producing highly skilled personnel in this sector through schemes such as scholarships for students for Ph.D. programmes at premier institutions.

The pillar on IT for jobs aims at training 1 crore youth from smaller towns and villages in the IT sector over the next five years. Business Process Outsourcing (BPO) enterprises would be set up in the north-eastern states to facilitate IT enabled growth in these areas. There is also emphasis on training at least 5 lakh rural workers by the telecom service providers (TSPs) to cater to their own needs in expanding access to telecommunication and broadband services in these areas. 

The last pillar on early harvest programmes aims at early implementation of projects in selected areas so that benefits could be realized quickly. These include setting up an IT platform for messages to be sent to people, providing wi-fi facilities in universities, biometric attendance in offices, ensuring secure email infrastructure within government, providing public wi-fi hotspots, converting all school books to be e-Books, a national portal for lost and found children and an SMS based weather information and disaster alert system. Many of these initiatives have already been made operational.    Digital India is a visionary programme that lays a solid foundation for a futuristic India driven by technology-led transformation. However, there is a need for concerted efforts by all the stakeholders to ensure that all the components of the programme are implemented holistically so that the intended benefits can be realized and the overall vision of the programme achieved.

(The above article originally appeared in ICT Connect, Magazine of ICT Academy of Tamil Nadu, March 2016, 6-8.

Transforming the Government Digitally: Challenges and Opportunities

India is witnessing a great digital transformation today in all spheres of economy and society. Digital technologies are being deployed by both the public and the private sectors to increase efficiencies, transform business processes and deliver greater value to their stakeholders. The government has launched the ambitious Digital India programme with the goal of transforming the government and the economy using digital technologies.

How are these digital technologies going to impact governance in the coming decade? How are the existing business processes and public service delivery models going to change? What are the challenges to such a transformation? In this article, I examine these aspects with specific reference to the advent of the latest technologies such as cloud, big data, analytics, social media, mobile, automation, Internet of Things (IoT), artificial intelligence (AI) and robotics. Some of these technologies are rapidly becoming mainstream and are significantly impacting the industry and the way applications are being developed and deployed in various domains.

Some of these new technologies are already being used by the government to make the delivery of public services more efficient and improve the government-citizen interaction. For example, the Mobile Seva project of the Government of India has significantly improved access to public services by bringing a large number of them on the mobile platform. The Digital India programme has also made cloud as the platform of choice for many departments for efficient use of computing resources and quick deployment of applications. The government is also using social media effectively to communicate with the citizens and other stakeholders. MyGov.in platform is being used by many departments to solicit views of all stakeholders on various government programmes.

Can the other emerging technologies such as big data, analytics, automation, IoT, AI and robotics impact governance? The potential of these technologies to transform business models and bring new products and services is enormous. Industries in several sectors have already started using these technologies to increase efficiency, reduce costs and improve their customers’ experiences. For example, automation of repetitive and rule based tasks is causing a significant disruption in the information technology (IT) services industry causing fears of layoffs. Government processes can be reengineered to take advantage of automation to make the delivery of services more efficient and accessible. Similarly, robots can also be used to improve citizen interaction when people visit government offices for seeking information or availing services.  

Big data and analytics are being used by a number of industries to generate new insights into consumer behavior and offer customized services. Government departments can also effectively use these technologies to analyze patterns in citizen demand for various services and tailor delivery mechanisms accordingly. Big data and analytics can also help the government in transitioning to a data driven and evidence-based policy environment to improve the quality of outcomes.

Internet of Things has the potential to lead to a truly connected world and enable real time responses to various events and situations. Missions such as smart cities can very effectively exploit IoT to deliver a truly seamless and connected urban infrastructure and improve the living experiences of citizens.

What are the enablers to such digital transformation of the government in future? There are four critical factors that can help the government in fully exploiting the emerging technologies to become more efficient and dramatically improve the quality of governance and delivery of services to citizens and businesses. First, the government must have a clear and long-term digital strategy aimed at taking full advantage of the potential of these technologies. The digital strategy must aim at end-to-end transformation of the entire business processes and not just the service delivery interface.

Secondly, leadership is critical to such a digital transformation of the government. Presence of leaders capable of understanding the full implications of the emerging technologies of the future and driving change within the organizations accordingly to transform business processes and public interface is extremely important. In India, this would require massive capacity building efforts at senior management levels across the government to prepare the leaders adequately. Government should also involve capable leaders from the private sector to drive this transformation.

Thirdly, achieving a government wide transformation would require massive capacity building and skilling of the government workforce. Presently, these capabilities are singularly lacking in government organizations despite recent efforts in this direction. Capacity building is required at all levels across the entire government and not just in the specialized units dealing with computerization.

Next, the government would also need to ensure that appropriate applications using the emerging technologies are developed and deployed effectively and used across various domains to derive the desired outcomes. This would entail creating and sustaining an organization wide digital culture and focus on change management to ensure that the entire organization is committed to digitally driven transformation.

Finally, such a massive programme would need the holistic involvement of all the stakeholders, in particular the citizens and businesses and the industry partners to succeed. The citizens and businesses, who are the primary beneficiaries, would need to enhance their digital literacy to take full advantage of a government wide digital transformation. The efforts being undertaken to make the citizens digitally literate under the Digital India programme augur well for such an endeavour in future.

What are the challenges that the government might face in making this transformation a reality? The key challenges include developing leadership and building workforce skills, finding adequate financial resources, addressing security concerns and developing a digital culture within the organization and amongst the stakeholders. The government would also need to put in place a suitable legal framework to drive the digital transformation. These challenges need to be adequately addressed to make this entire endeavour a success. The emerging technologies present a great opportunity for us to transform our governance digitally to make all services truly online, end-to-end, connected and integrated in the next decade. We must overcome the challenges in achieving this vision through strategic planning, devoting adequate resources, building capabilities at all levels, developing and deploying appropriate applications and involving all the stakeholders. We are the world leaders in IT and it is the right time that we take the lead to use these technologies for transforming the quality of governance in the country.

(The above article was originally published in the eGov Magazine in its July 2017 issue. It is available at: https://egov.eletsonline.com/2017/08/transforming-the-government-digitally-challenges-and-opportunities/).

Target Olympics: How to Win More Medals?

The recently concluded Rio Olympic Games have grabbed the attention of everyone in the country, not least because of the dismal performance by India, which won just two medals this time compared to the six it had won at the previous edition in London just four years ago. A lot has been written about the reasons for such a poor performance by our athletes. These include lack of world-class sports and training infrastructure, lack of adequate incentives for the players, sports not being a viable long-term career option for sportspersons, lack of a sporting and fitness culture in the country, infighting and indiscipline in the sports federations which select and train the players and poor oversight and management by the government.

Is there any hope for us to improve our performance and achieve sporting glory in the foreseeable future? When small countries like Fiji and Kosovo can win gold medals at the Olympics, why can’t we, a nation with over 125 crore population? We must realize that long-term and sustainable improvement in sports cannot be brought about by this once-in-a-four- year obsession with the Olympics alone in our cricket-crazy nation. It requires sustained development and promotion of a sporting culture in the entire population with specific focus on the school going children from where our future sporting champions would come. This needs to be matched with creation of quality sports infrastructure reaching right up to the village level to ensure that access to such facilities is widened and made more equitable. Instead of the overall size of the population, what is more important is how many people have access to quality sporting infrastructure. Unfortunately, the proportion of the population having access to good sports infrastructure probably does not exceed more than 15% in our country. Widening the participation, spotting the right talent at a young age and grooming them to become future champions hold the key to success in sports. This is the strategy that worked so successfully in producing champions in athletics in countries like Jamaica.

While the central and state governments need to play a critical role in creating the sports and training infrastructure across the country, the various sports federations need to play an equally important role in selecting and training the sportspersons. However, in many sporting disciplines, the federations are ridden by factionalism, corruption and lack of transparency with no proper focus on promoting the game. Reforms in the federations on the lines of the Supreme Court mandated reforms in the BCCI are long overdue. Such a move would help in addressing many of the current ills in the system.

Though the government has substantially increased the cash incentives and employment opportunities to successful sportspersons, sports are still not seen as a viable full time career option by many. This needs to change through participation by the private sector in providing suitable employment opportunities. To think that the government alone can provide employment to all of them is unrealistic.

Wider private sector participation also holds the key to rapidly improve sports infrastructure and groom the talented sportspersons. Suitable public-private partnership (PPP) models should be devised to allow the private sector to invest in creating quality infrastructure across the country. Specialised centres of excellence or academies in various disciplines should also be created through PPP model to groom the talented sportspersons to achieve excellence at international level. This approach is already yielding good results in a few disciplines such as badminton and squash. To achieve the objectives outlined above, the present level of investments in creating the necessary infrastructure and training and supporting the sportspersons in the country needs to be enhanced manifold. We cannot hope to win medals at the Olympics with the current level of facilities and support that we provide. While a substantial part of the enhanced investments have to come from the government, both at the centre and in the states, the private sector needs to contribute too in a significant manner. Hopefully this would happen once the participation levels expand and there is more focus on achieving success in Olympic disciplines at the international level. Britain, after its relatively disappointing performance at the 1996 Olympic Games where it won just one gold medal and a total of 15 medals, increased its investments in sports and training of athletes substantially through its national lottery programme. As a result, during the past two decades, its performance has improved dramatically with the country winning 27 gold medals and coming second overall in the medals tally at Rio. If we have a strategic action plan in place as outlined above, there is no reason why we cannot win, say, 10 medals at Tokyo in 2020 and more in the future Olympics.

(The above article was originally published in Deccan Chronicle on September 11, 2016. It is available here: https://www.deccanchronicle.com/sports/in-other-news/110916/target-olympics-how-to-win-more-medals.html)

Digital India: What Next?

A flurry of projects is being launched under the Digital India programme on a regular basis. Some of the major projects include the digital payments app BHIM, Government e-Market (GeM), Aadhaar linked e-Sign and digital locker, Mobile Seva, MyGov, Bharat Net, National Scholarship Portal and e-Hospital. Digital India is a very ambitious programme aimed at transforming India into a digitally empowered economy and knowledge society. It was approved in August 2014 with great expectations to usher the country in a new era of digitally driven growth and prosperity. How has the programme performed in its nearly three years of implementation and what lies next for it? What mid-course corrections, if any, can be made to enable it to achieve its desired outcomes in the future?

Digital India is centered on three key vision areas. The first element of the vision is to provide digital infrastructure to every citizen and create access points for delivering digital services. The second vision area focuses on providing access to government services on demand. The third vision area focuses on capacity building and empowering citizens so that they can become active participants in a digitally driven economy. The programme covers nine pillars of growth areas which include broadband highways, universal access to mobile connectivity, public Internet access programme, reforming government through technology, electronic delivery of services, information for all, IT for jobs, electronics manufacturing and early harvest projects.

The achievements under the programme have been noteworthy though the full impacts of the projects are yet to be realized. Under the Bharat Net project, optical fibre connectivity has reached over 75,000 panchayats, covering about 30% of all the panchayats. Government data centres and wide area networks have been established in almost all the states. Over 3 lakh common service centres (CSCs) to deliver government and business services have been established across the country. These CSCs cover over 1.72 lakh panchayats. The government has keenly pushed JAM (Jan Dhan, Aaadhaar and Mobile) to ensure financial inclusion. Aadhaar enrolment has crossed 112 crores while the Direct Benefit Transfer (DBT) has shown promising results in schemes like scholarships, PAHAL, public distribution system, MGNREGS and the National Social Assistance Programme. The Mobile Seva project has brought about a transformation in delivering government services through mobiles. Both Digital Locker and the MyGov platforms have over 40 lakh registered users.

Though the projects under Digital India have made a good beginning, it is clear that they are yet to achieve their desired outcomes considering the large population (especially in rural areas) and geographical expanse of the country. How can the programme achieve its full impact within the targeted timeframe? It must be realized that the penetration of e-governance services is still low in the country due to lack of ICT infrastructure and low digital literacy. Lack of local language support is also an important barrier. Further, the full potential of the mobile platform for delivering government services has not been realized and new technologies for enhancing the effectiveness of the applications, such as data analytics, Internet of Things and GIS, have not been exploited fully. The performance has also varied significantly across the states.  

What can be done to enhance the effectiveness of the projects under Digital India?  We must aim at enhancing the reach and impact of the projects with focus on rural areas and economically weaker sections. For this, the projects must aim at increasing both their scale and scope. While the scale involves enhancing both geographic reach and number of transactions, scope implies that the applications be made end-to-end involving completely paperless, faceless and cashless transactions. Mobile must be made the default access mode for applications to enhance reach and coverage and local language interfaces must be seamlessly integrated. The digital locker ecosystem must be expanded and large scale digitization of records initiated to make all transactions paperless. Similarly, for making all transactions faceless and cashless, Aadhaar should be made the primary mode of authentication and payments. The network of CSCs must be increased to cover every panchayat. We also need to focus on cybersecurity to ensure that our electronic infrastructure and transactions are safe and secured. Institutionally, all states and union territories must be brought on board as key stakeholders in implementation.

To truly enhance the reach of Digital India, we must develop digital villages and digital markets. A digital village would focus on connectivity and applications to provide services digitally in villages, such as tele-health, virtual classrooms and skilling and capacity building. A digital market would help in integrating the rural economy at regional and national levels and bring better remuneration to farmers and artisans. 

Ensuring that every citizen is able to benefit from Digital India would require massive efforts at capacity building, especially in the rural areas and amongst women. Government and private organizations also need to enhance their capacities manifold at all levels to deliver their services digitally.

Digital India is transformational in its vision. However, we need to ensure that it reaches each and every Indian to truly achieve this vision.