Bengaluru, deep-tech start-up destination

Known Unknowns

Bengaluru has several ingredients to be a global deep-tech start-up hub. There is some confusion about what defines a deep-tech company. A deep-tech company is characterised by global-first products with a gestation period of more than five years. Typically, deep-tech company founders have industry experience of more than 10 years and often possess advanced degrees.

For deep-tech companies to succeed, the required ecosystem includes institutions of academic excellence, governments with governance excellence, corporations with research excellence, and clusters of individual enterprise, employment, and growth. Let us go over each success ecosystem element where Bengaluru does well, and where we need to continue building.

Institutions of academic excellence: Bengaluru has institutions of national pride such as the Indian Institute of Science (IISc) and the Indian Institute of Management (IIM-B). IISc has been recognised in the global top 200 institutions, with the specific rank depending on the ranking agency. IISc should aim to be consistently in the top 25 research institutions globally to become for Bengaluru what Stanford is for Silicon Valley. IISc has incubated more than 60 start-ups, which is a great starting point for the start-up ecosystem. The IISc-linked ecosystem has also fed deep-tech efforts at many more organisations with its research-based outputs.

Beyond IISc, we need to have a stronger research ecosystem, including the CSIR and DRDO labs and upcoming research capabilities in engineering institutions like RVCE, PES, and Amrita. Also, Mysuru has some fantastic capabilities to be leveraged from organisations like CFTRI and several engineering colleges.

Government with governance excellence: From occupancy certificates to environmental permits to tax matters to research grants and projects to VC funding-related compliances, there are many aspects of a start-up that gets impacted by governance. Bengaluru was blessed with state governments in the 1990s that attracted global investments in R&D through good governance and land grants. Texas Instruments was early to set up an engineering operation, and GE set up its largest R&D Centre in Bengaluru. There have also been many recent central government initiatives that have been based on industry inputs including programmes like TDF, IDEX, and DISC, which are allocating funds for R&D to start-ups. However, the transparency of these central government programmes must improve in terms of processes, timelines, and feedback mechanisms. Bengaluru start-ups can team with local academic, CSIR and DRDO institutions in bidding on these programmes.

Corporations with research excellence: Bengaluru has the good fortune of having several large IT/Biotech corporations, including Infosys, Wipro, Biocon and Mindtree, in addition to all the global majors. Most of these companies have active start-up programmes. However, our large corporations’ appetite for deep-tech and having a truly collaborative start-up programme needs to further mature. At the national level, our R&D investments are 0.7% of GDP, significant amount of which comes from the government. We need to increase R&D investments to at least 2% of GDP. Much of this growth in investments will have to come from large corporations. Bengaluru corporations can and should take the lead for the country in moving the needle on R&D investments. Intel in California was the seed for what became Silicon Valley. We need the Intel-equivalent for Bengaluru.

Clusters of individual enterprise: On a recent panel organised by Deccan Herald with the theme ‘Bengaluru 2040’, everyone agreed that the city’s biggest asset is its talented people. Having worked with Bengaluru-based researchers at GE and the Tata Group for 17 years, and with my own start-up team for the past four years, I think we have one of the best talent pools globally. I have worked with some of the finest material scientists, device specialists and systems engineers among these teams. The younger generation is confident, they are collaborators, and are digital natives. They are very comfortable with technologies such as Artificial Intelligence and Edge Computing. One lacuna is that India is not a lead market, and for deep-tech, the customers will still be in markets such as the US.

As we solve for the India market opportunities of $100 billion a year each in Energy, Health, and Mobility, Bengaluru should be in the driver’s seat. We deserve it.