It’s often asked why India, with its abundant tech talent, hasn’t been able to produce a Google, Microsoft, Facebook or Amazon. The answer is probably because the country lacks a culture of sustained research and innovation.
The National Association of Software and Service Companies (Nasscom) is hoping to remedy that. The country’s IT trade body is working on a plan to get select US universities to work with Indian startups and help bridge the gap in technology research.
And that, according to Nasscom, may soon see the cream of US universities tying up with Indian tech startups to work on cutting-edge research programmes. Nasscom didn’t identify which universities would be approached.
“Silicon Valley did not get built overnight. It took them some 30 years to get to a high level,” Ramkumar Narayanan, chairman of Nasscom’s Software Product Council, told Moneycontrol.com. “This was enabled by the quality of academia-industry research partnerships in the US. This is what we got to do in India as well. Here at Nasscom, we are hoping to get some of these world-renowned universities to partner with some of our best talent.”
According to Nasscom, the global software product ecosystem is worth $540 billion and India remains on the fringes, with $8.9 billion in revenue. The country’s relatively weak academia-industry partnership is one of the underlying reasons for this situation.
On the other hand, India’s exports of software services are better. They stood at $128.6 billion during 2019-20, registering a 9.1% growth over the previous year, according to the Reserve Bank of India’s annual survey on exports of computer software and information technology-enabled services (ITeS).
Incubation programmes and accelerators
In the US, university-linked incubation programmes help startups establish deep roots quickly. Programmes such as the Start-up Aggieland at Texas A&M University, 1871 at the University of Illinois, Emerging Technology Centre at Johns Hopkins University, and Los Angeles Cleantech Incubator at the University of California, Los Angeles, are cases in point.
Often in the US, universities offer student entrepreneurs the funding and the environment to set up the base for hugely ambitious projects.
Last year, 15 US universities joined hands to establish the University Technology Licensing Program LLC to create a centralised pool of licensable intellectual property. Brown, Caltech, Columbia, Cornell, Harvard, the University of Illinois, Michigan, Penn, Princeton, UC Berkeley, UCLA, the University of Southern California and Yale are part of the consortium.
The initiative has come about as colleges act as business accelerators, offering students not only resources but also helping them to connect with venture capital funds.
“Universities in the US are well-funded and enjoy the backing of the industry. The industry linkage enables the universities to recognise the market needs,” said P.N. Sudarshan, a partner at Deloitte India. “India has the talent now in the software products space. What the government has to ensure is IP protection. There should be a strong framework around IP protection, like in Israel.”
The government has announced a production-linked incentive scheme for IT hardware to boost domestic manufacturing and attract investments. Deloitte’s Sudarshan said such a scheme could be extended to software products too.
Skills and training
Given the paucity of high-quality product management professionals, Nasscom has tied up with the government of India to start the Future Skills project. This upskilling initiative aims to produce 50,000 highly trained software product management professionals by 2025.
Despite the challenges, there is considerable optimism.
“We are greatly encouraged by what is happening in India. Look at the number of unicorns that we have now. Youngsters are powering the ecosystem not just in SaaS (software as a service) but also in deep-tech,” said Nasscom’s Narayanan.
But the system is not yet world-class. The trade body has set up a product skill programme, where practising professionals share their experiences and teach young founders. The plan to tie-up with US universities could be the next step in taking innovation and mentoring to a higher level.
“Our research ecosystem is not robust enough. We have to slowly open the window for research collaboration,” said Narayanan. “We have world-class talent, but not world-class products. Our attempt should be to solve hard problems on a global scale and aim for 10% of the global software product market. Now is the time to add all the ingredients needed for it.”
With India’s drive towards digitalisation, there is bound to be robust growth in areas such as analytics, artificial intelligence, customer relationship management, and data and analytics. The encouraging sign is that India’s software product market has grown at a CAGR (compound annual growth rate) of 37% in the past five years.
Digital adoption is a significant step in cost optimisation, and during the pandemic, it can be an important factor. India’s digital drive may well accelerate India’s software product market growth.
