Developing Indias Innovation Capital

Innovation is imperative if India wants to continue to grow its GDP by 9-10 per cent each annum and improve the quality of life for its citizens. Examples such as China and South Korea demonstrate how innovation can help countries leap frog to a non-linear growth model that not only delivers economic growth but also improves a nation's standing on human development indices.

As disruptive innovations are more likely to come from new start-ups - developing successful indigenous startups is key to ensuring that India creates the 12 million well-paid jobs each year and help the country move up the knowledge economy value chain.

Until recently, India lacked a coherent policy framework and environment to create a sustainable indigenous start-up ecosystem. Prime Minister Modi's government has made step-changes in this policy and the results are already showing. With 380 disclosed deals with a combined value of $3.5 billion, the first half of 2015 has had more deals than in 2014. In the first quarter of this year, Indian start-ups raised $1.7 billion which was 300 per cent more than the $450 million raised in the Q1 of 2014. The number of total deals in the Indian start-up ecosystem in 2014 was 300.

However, the challenges of funding, mentoring, and ensuring there are start-ups that deliver social value along with economic growth haven't gone away. For example, as we point out in our 'Hot Spot' article, a large percentage of angel investors who invested $25 billion in US start-ups last year are of Indian origin - but very few of them have invested in India. The Government could persuade them to participate in the Indian start-up ecosystem too, possibly if the capital gains tax was not blocking their way.

Creating the right kind of start-up ecosystem has a unique responsibility of not only adding to the country's GDP and innovation quotient, but also acting as a proactive force to empower people in all parts of India and help lift them out of poverty. The base for this already exists, as seen with previously digitally unaware farmers using basic mobile phone technology in rural India to find out the going rate for their crops or illiterate women taking the initiative to run entire solar units in southern India. The man-power and will power exist, all that is now required is some real political will.

This edition of 'India Global Business' charts the course of this conundrum to mark the Indian Prime Minister's first visit to the Silicon Valley to drive the country's start-up agenda. PM Modi is meeting with senior leaders in Silicon Valley ranging from the founders of Google and Facebook to venture capitalists and other stakeholders to urge them to support the nascent and mostly organically developed Indian start-up ecosystem.

However, while India must learn from the successes, and failures, of not only the Silicon Valley but also of London, Singapore, Israel and other regions that have succeeded in developing a truly innovative and impactful start-up ecosystem - it needs to chart its own unique path.

Developing local solutions from a global perspective. Against this backdrop, India Inc. will be hosting its second annual Digital India Conclave focusing on innovation in New Delhi on 4th December 2015. In this edition, we have interviews with some of the brightest sparks from the world's innovation capital to get their take on how India can leapfrog to trigger its own start-up revolution. We also take stock of the India-US relationship - how far it has come and what the Obama-Modi era really means for this crucial partnership.

Besides the US, the partnership with the UK is not far behind with an exclusive interview with David Cameron's Indian Diaspora Champion, Rt. Hon. Priti Patel, who also took over as employment minister earlier this year. We hope this edition gives you lots of food for thought.

Manoj Ladwa is the founder of India Inc. and chief executive of MLS Chase Group @manojladwa