‘If We Have Enough Grants, Then We Might Provide Everything For Free’

India is betting high on encouraging startups to promote unconventional thinking in the IoT landscape. What often goes unnoticed is the paramount task of mentors in guiding the entrepreneurs towards this path from behind the curtains! Dr. Omkar Rai, director general, Software Technology Parks of India (STPI), in an exclusive chat with Rahul Chopra and Baishakhi Dutta of Electronicsforu.com Network, sheds light on the various services and offerings for the entrepreneurs to utilise in the country. Excerpts follow…  

Q. You started with focusing on IT and now we are seeing more & more enlargement of the scope to cover IoT. What is the vision behind this?

STPI started with the promotion of the IT outsourcing industry. At present it is a very mature industry, powering and serving many IT businesses in the world. Now, we are shifting the focus primarily for two reasons.

Firstly, India requires to promote electronic manufacturing because our import bill has grown a lot. And in times to come, it can grow even further if we don’t manufacture within India.

Second is that much of the wealth now lies in technology product creation. While the world market in terms of technology product stands at US$ 445 billion, India’s share in this is mere US$ 7.1 billion. And that is why this whole incubation movement, startup movement or even the national policy on software products that was recently approved by the Union Cabinet of India is aimed at transforming India into a technology product nation. India is trying to capture a sizeable world market and its share is estimated to reach US$ 70-80 billion by 2025.

Q. What is the end goal that you are looking at with the help of this change?

Since the nature of entrepreneurship is changing, the nature of startups is changing too. Hence, we are transforming our role to become a modern incubator which should be able to provide end-to-end services to startups. These services will be in terms of product creation, right from the screening process, man training, capital investment to exposing them to the market.

Then comes more facilities like market connects, access to the capital and more. All these are essential services that are required for a startup of this time and are being offered by the STPI. For this purpose, we are creating several Centres of Excellence (CoEs) in the entire country.

Q. Are the CoEs same for separate areas of technology like AI, IoT, etc.?

No. These CoEs are very focussed. We are operating the Electropreneur Park which is in the University of Delhi (south campus) in collaboration with the India Electronics Semiconductor Association (IESA). Through this centre, we are trying to work with a large number of industry experts and veterans who are working with our entrepreneurs and startups. This is totally focussed on electronics systems. We are opening another Electropreneur Park in Bhubaneswar, as the city is seeing the rise of a large number of startups.

Now, we are also opening a CoE for AI and several other CoEs using IoT in different domains, like IoT in agriculture, IoT in the rural application (horticulture), IoT in smart city and several others. So IoT is a technology which has to be deployed, used and capitalised to develop technology across domains.

“It would be wrong to say that the IoT market will mature in another two years because it will keep on evolving with every passing day”

Q. So, does that mean that these CoEs are primarily incubation hubs?

Absolutely! It is an incubation hub because it will take care of all the needs of the startups, right from sensitising the students to ideate in a particular manner. We conduct sensitisation all across the country. Even in our existing Electropreneur Parks, we do massive sensitisation and contact the prospective entrepreneurs to give a glimpse into the kind of opportunities that exist including the areas where people need production services.

Q. What is the unique facility of the IoT Lab?

The IoT Open Lab is the second of its kind in the whole world, first being in Hong Kong. The lab will be open for not only the startups who come in our incubator but will be accessible by entrepreneurs operating from other facilities as well. Our IoT Open Lab can be used by entrepreneurs who want to capitalise, use and adopt IoT, irrespective of the domains they choose.

Q. What all can the IoT ecosystem expect in the IoT lab?

The IoT lab would have complete facility in terms of providing all sorts of technical support required by the startups. It is spread across an area of about 10000 sq metres at the Electronic City in Bengaluru. It will have experts to explain advanced technologies to startups and help them use that technology in their products. There will be mentors who will validate the ideas – whether it is commercially viable or not and whether it will work or not.

Q. By when will be the lab ready?

The budget for the lab has been allocated and approvals have been given. Currently, infrastructure and interiors are getting ready. Our partner, Arrow Electronics, is getting ready to import all the required equipment. There will be a small place for entrepreneurs to stay in. Interestingly, entrepreneurs would be able to use that lab and operate from our other incubation centres. It may take up to another six-seven months to make the lab operational.

Q. Does STPI take any equity in startups?

It depends. There is a market norm to keep a maximum of 10 per cent equity by stakeholders to make it self-sustainable. Our CoEs in most cases will have 8 – 10 per cent equity share of startups, and it will be distributed among mentors, partners and all. So, in all, our equity can be limited to a maximum of 2 per cent. We aim to make some money out of these efforts just to make them self-sustainable over a period of time. However, if we have enough grants then we might provide everything for free! Like in Electropreneur Park, we are getting a lot of CSR grants, So, it’s a very flexible model.

“Our CoEs in most cases will have 8 – 10 per cent equity share of startups”

Q. How can an entrepreneur know about these things?

We keep on updating information on our website. We post about workshops, connect entrepreneurs with investors, conduct mass contact programme, etc. Besides inviting industry veterans to work with prospective entrepreneurs, we offer them laboratories and an inside glimpse of the real market.

As the number grows, we will have the STPI CoE Hub which will be a window for any entrepreneur to interact. It will also help send information so people can start connecting through colleges, universities, hi-tech institutions and all. By doing so, the whole ecosystem will be able to approach them. The hub will have all sorts of access mechanism so that prospective entrepreneurs can easily reach us and apply online or through our campaign.

Q. Is there some kind of qualification that as an organisation or an individual need to have to be a qualified startup?

A startup can be anybody. There is no qualification for that. But if you are trying to refer to the Startup India program, then there is a qualification. For Startup India program, there is a condition where a committee of joint secretaries screen an application and recognise only those products that are technology based and has some IPR input in it. So, if a startup is recognised like that, then they are eligible for availing a lot of incentives in terms of exemption of income tax and all. Our startups can also apply in the Startup India program and also avail all those incentives.

“The IoT lab will be open for not only the startups who come in our incubator but will be accessible by entrepreneurs operating from other facilities too”

Q. How well do you think that the startup ecosystem has matured in the country in terms of the IoT domain?

It’s an ongoing process and has gradually started picking up. It would be wrong to say that the IoT market will mature in another two years because it will keep on evolving with every passing day. It will require a large number of participants, a large number of stakeholders and a large number of the entrepreneurial ecosystem.

Technologies like AI and IoT is going to create many new sectors, which in turn will help startups evolve. Hence, we just cannot limit it to when it is going to mature. I would say that it will keep on maturing.

Q. Any top 2-3 IoT applications you think that Indian entrepreneurs need to focus on more?

IoT is already being used across the globe in healthcare, old-age care, social welfare, mobility, etc. There will be many more wearable devices. With mobility on the focus, people will carry cards which will generate a lot of data.

IoT will have several applications in transportation, security, electronics, lighting, pooling, smart cities, agriculture, horticulture, wildlife management, vehicle management and several other areas. IoT is the frontier of all technologies because for everything, IoT will be interfaced. This will lead to the generation of raw data, higher adoption of cloud technology, and other activities. AI will come after that.

Q. So would it be correct to assume that there will be more IoT labs and IoT parks?

A large number of IoT parks will be using modern technology for a particular domain. Some of our centres of excellence are very technology space based. But most of them are domain space based. IoT is going to be there in any case.