Much Of The Wealth Now Lies In Technology Product Creation


India is betting high on encouraging startups to promote unconventional thinking in the Internet of Things (IoT) landscape. What often goes unnoticed is the paramount task of mentors guiding 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 sheds light on the various services and offerings for entrepreneurs to utilise in India.

Dr Omkar Rai, director general, Software Technology Parks of India (STPI)

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

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

First, India needs to promote electronics manufacturing because our import bill has grown a lot. And in times to come, it can grow even further if we do not manufacture within India.

Second, much of the wealth now lies in technology product creation, and therefore the world market in terms of technology product stands at US$ 445 billion. India’s share is merely US$ 7.1 billion. This is why the whole incubation movement, startup movement or even the national policy on software products that has recently been approved by Union Cabinet of India are aimed at transforming India into a technology product nation. India is trying to capture a sizeable world market, which is being seen at US$ 70 to 80 billion by 2025.

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

A. 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 that should be able to provide end-to-end services to startups. These services will be in terms of product creation, right from screening process, manpower training, capital investment and exposure to global market.

Then comes facilities like market connections, access to capital and all. These are essential services that are required for startups of this time. This is being given by STPI, for which we are creating several centres of excellence (CoEs) in the country.

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

A. No! The CoEs are extremely focused. We are operating the electropreneur park in University of Delhi (south campus) in collaboration with India Electronics Semiconductor Association (IESA), through which 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 focused on electronic systems. We are opening another electropreneur park in Bhubaneswar because there is a large number of upcoming startups in that city.

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

Q. Does this mean that these CoEs are primarily incubation hubs?

A. Absolutely! These are incubation hubs because these will take care of all the needs of startups, right from sensitising the students to ideate in a particular manner. We create sensitisation across the country. Even in terms of our existing electropreneur parks, we do massive sensitisation and contact prospective entrepreneurs so that they are given a random glimpse into the kind of opportunities that exist, including areas where people need production services.

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

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

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

A. The lab will have complete facilities in terms of providing all sorts of technical support required by startups. It is spread across approximately 10,000 square-metres at Electronic City in Bengaluru. It will have experts to explain advanced technologies to startups and help them use those technologies in their products. There will be mentors who will validate ideas, in terms of whether the ideas are commercially viable or not, and whether these will work or not.

Q. When will the lab be ready?

A. The budget for the lab has been allocated, and approvals have been given. Currently, infrastructure and interiors are getting ready. On the other hand, our partner, Arrow Electronics, is getting ready to import the required equipment.

In addition to this, entrepreneurs can use the lab and operate from our other incubation centres. There will also be a small place for entrepreneurs to stay. It may take another six to seven months to make the lab operational.

Q. Does STPI take any equity in startups?

A. It depends; there is a market norm to keep a maximum of ten per cent equity by stakeholders to make it self-sustainable. Our CoEs, in most cases, will take eight to ten per cent equity share from startups, which will be distributed among mentors, partners and others. In all, our equity can be limited to a maximum of two per cent.

We aim to make some money out of these efforts just to make these self-sustainable over a period of time. However, if we have enough grants, we might provide everything for free. Like in electropreneur parks, we are getting a lot of CSR grants. So, it is a flexible model.

Q. How can an entrepreneur know about these things?

A. We keep on updating information on our website. We post about workshops, connect entrepreneurs with investors, conduct mass contact programmes and other activities by bringing industry veterans to work with prospective entrepreneurs, offering them laboratories and giving them an inside glimpse of the real market.

As the number grows, we will have 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 entire ecosystem will be able to approach entrepreneurs. It will have all sorts of access mechanism so entrepreneurs can reach us, and apply online or through our campaigns.

Q. Is there any qualification that an organisation or individual needs to have to be a qualified startup?

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

Q. How well do you think the startup ecosystem has matured in the country when talking about the IoT?

A. It is an ongoing process that has gradually started picking up pace. 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 the IoT are going to create many new sectors of activity, which, in turn, will help startups evolve. Hence, we cannot limit the IoT to when it will mature. I would say that it will keep on maturing.

Q. Any top IoT applications you think Indian entrepreneurs need to focus on?

A. The IoT is already being used across the globe in healthcare, old-age care, social welfare, mobility and so on. There will be so many wearable devices coming out. With mobility as focus, people will carry cards that will generate a lot of data.

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

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

A. Definitely! A large number of IoT parks will use modern technology for a particular domain. Some of our CoEs are very technology-space-based, but most of them are domain-space-based. The IoT is going to be there in any case.