Shortage of deep tech talent which includes expertise in sectors like Artificial Intelligence (AI), Machine Learning (ML) and advanced computing may impede the fast growth of India’s enterprise Software-as-a-Service (SaaS) firms, said a report published by industry body Nasscom in collaboration with auditing and consulting firm EY.
“Deep tech requires specialized expertise, but finding and retaining skilled professionals is a challenge due to high demand and limited supply,” the report titled ‘Breaking Ground: Unraveling the deep tech potential in Indian B2B SaaS’ said on August 22.
The report has conducted face-to-face interviews with several chief experience officers (CXOs) of leading SaaS firms and has found that around 80 percent of them say that the shortage of talent in the deep tech space as well as the lack of the right deep tech infrastructure may affect growth.
This comes just a month after venture capital firm Accel’s Prashanth Prakash said at an event that Deep tech or sectors like artificial intelligence (AI), machine learning (ML), biotechnology, molecular discovery, among others have no real ecosystem in India.
India's unicorn club currently has three deep-tech unicorns including 5ire, Uniphore, and Gupshup.
Among the top Deep Technologies available, Artificial Intelligence and Machine Learning are the most leveraged deep tech with about 54 percent of use cases, followed by big data or descriptive analytics at 39 percent and intelligent automation at 7 percent, the report said.
“Attracting talent necessitates creating a stimulating work environment and offering incentives to cultivate a culture of invention,” the report said.
Along with the deep tech talent shortage, many CXOs have also pointed out that lack of patient capital, which is funding that endures extended periods without instant returns may also hamper growth.
“Striking a balance between investors' expectations and the need for sustained financial support is crucial for deep tech start-ups,” the report said.
Despite the challenges the report also said that the deep tech-focused B2B SaaS firms can potentially unlock sustained Annual Recurring Revenue CAGR of 30-50 percent.
The report also stated that 1 out of 4 (25 percent) of the Indian B2B SaaS companies studied were inventive deep tech-focused, with 1400+ patents filed between them over the past half-decade, compared to only 574 patent filings over the preceding decade.
“As we move ahead, prioritising innovative and inventive deep tech and at the same time addressing the growth impediments will be fundamental in building a globally competitive and the most attractive deep tech-led B2B SaaS destination in the world,” said Sangeeta Gupta, senior vice president, and chief strategy officer at Nasscom.
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