India Inc India Inc: Monday, 28 July 2014 10:24

Tech Speak with Nitin Dahad - India’s Digital Vision reflects new mood in buoyant tech sector

by Nitin Dahad

India is an exciting place for the technology sector at present, with huge momentum based on the constant flow of news I am seeing daily.  There’s so much going on, from the Digital India policy announced in the budget, the smart cities vision, Infosys’ ex-chairman partnering with Amazon, and India’s own Flipkart on a roll, with reports of acquisitions, fundraising, diversifying into e-learning and so on. There’s even talk about Powai Valley, Mumbai’s answer to London’s Silicon Roundabout.

All this is just touching the surface, but it demonstrates that India’s numerous emerging tech community and clusters have an ambition and aspiration probably not seen before in India, from a new confident youth as well as those returning from the USA.

As I mentioned in this column back in January, the then Prime Ministerial candidate Narendra Modi had outlined his vision for the tech sector in India. The first stage of this announced in the recent budget is the new Digital India policy.This policy goes beyond simply looking at the broadband network infrastructure. It will look at the whole end-to-end usage of digital information in real time, and ensuring relevant interfaces to enable e-government and e-services. As part of this policy, there is also a vision to build 100 ‘smart cities’.

Commenting on the budget, R. Chandrashekar, president of India’s software association, NASSCOM, said, “By identifying the core issues and allocating funds, the recognition given to leveraging technology for growth is a commendable step towards the vision of Digital India. Emphasis on start-ups and innovation has been the pivot in this budget with multiple announcements regarding funding, incubation network and skilling. The proposal to set-up a Rs. 10,000 crore fund for start-ups and entrepreneurs will act as a great booster for the growing start-up landscape and will help drive innovation and solutions for the global as well as the domestic markets. The role of technology clearly finds prominence in the government’s vision of an Inclusive India.”

Highlighting initiatives targeted towards delivery of government services for all citizens being a clear priority for India, he adds. “The Digital India vision has a sharp focus on rural areas as well with budgetary allocations for providing broadband connectivity to all villages and a specific provision for ‘Start Up Village Entrepreneurship Programme’ which will provide a fillip to entrepreneurs who are based out of rural India and those who provide IT based solutions in these sectors.”

“The emphasis on 100 smart cities, Export Promotion Board, intent to make SEZs more effective, introduction of e-visa, portability of PF accounts, accelerated implementation of GST, etc. are all positive steps towards enhancing a tech-enabled environment. The direction is right and what needs to be closely watched is how quickly and effectively these plans are rolled out and how impactful they can become.”

Smart cities and the Internet of Things (IoT)

The smart cities vision is particularly interesting, and as I highlighted in this column last December, the role of the IoT (Internet of Things), with connected devices and connected cities will be extremely important. For those of you reading this column still not sure about what smart cities means, it is the use of technology to monitor, analyse, and resolve urban challenges in the city. For example, this might involve sensors monitoring all kinds of variables in the city – like traffic flow, congestion, pollution, energy usage, water levels, waste management – and continuously transmitting the data via wireless connections to a control centre that can take appropriate action to alleviate any problems arising. Or it could involve the use of social apps that allow citizens to report problems (eg. potholes), or share information (eg. about congestion), that is used by city officials to take corrective action.

Earlier this month, The Times of India reported that Singapore offered to build some of the smart cities in India. Water management technology seems to be high on the agenda, given Prime Minister Modi’s focus on rejuvenating India’s rivers. On his visit to India earlier this month, the UK’s George Osborne also offered a £1billion credit line to British companies willing to invest in Indian infrastructure projects.

Online retail growth, diversification

At the time of writing this article, rumours abound of India’s biggest online retailer, Flipkart, raising around US$1 billion in funds from investors, making this potentially one of the largest fundraising rounds for an Indian company, and also on a global scale, one of the biggest this year behind the Uber $1.2 billion funding round in the USA.  It’s reported that Flipkart could aim for an IPO (initial public offering) in the USA within three years at a valuation of US$20billion.

The e-commerce platform is also reported to be diversifying into e-learning course material and online tests for students in schools and colleges.

Looking at exploiting the untapped potential of online retailing in India, Amazon has teamed up with N.R. Narayana Murthy’s (co-founder of Infosys) new venture, Catamaran Ventures, to support small and medium sized offline retailers to go online. According to the Reuters report, Amazon will support the venture with logistics and technology expertise.

Powai Valley – India’s answer to Silicon Roundabout

Since start-ups and tech entrepreneurs are a key part of India’s digital vision, it’s no surprise that tech clusters are emerging in all sorts of places. One of these is becoming known as Powai Valley, located near the Powai Lake area of Mumbai. It has all the right ingredients for a ‘Silicon Valley’ like ecosystem, with the talent, in the form of graduates from one of India’s leading engineering colleges, IIT Bombay, relatively low rentals compared to other parts of central Mumbai, angel investors and returning entrepreneurs from the USA to provide the much needed experience.

This ecosystem is already reported to be home to at least 50 new startups in the internet and mobile space, making it a hot emerging competitor to London’s Silicon Roundabout.  One group of angel investors, Powai Lake Ventures, sums up the spirit of the cluster on the home page of their web site: “We are a bunch of people who love the Powai Lake in Bombay…. Many of us just hang around in the cafes around the lake, sipping a cold beer while soaking in the warm breeze. We love to meet founders who build companies from their hostel rooms on the northern bank of the lake. When we like them, we fund them.”

One well known investor in the Mumbai scene, Sasha Mirchandani of Kae Capital, said in The Times of India this month that he invested in three start-ups from the Powai area – Squeakee, Shopsense, and Palet.ly. He suggests that Powai Valley could easily gain enough critical mass for VC firms to be attracted to set up in the area.

With the Digital India policy, the emphasis on encouraging the emerging tech ecosystem to bring something of value (for example startups building technology and applications as part of the smart cities vision), and the growth of India’s own billion dollar companies like Flipkart, it is clear that India now has all the ingredients for indigenous tech innovation to happen. And maybe even nurture its own global tech titans; so we could see the next Google or Facebook actually coming from India.

Nitin Dahad is a consultant and adviser in the electronics, semiconductors and wireless industry, with over 25 years experience in various roles in working with large corporations as well as start-ups globally – particularly the UK, US and India. He is also the brain behind a number of successful technology and B2B publications.

 

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