Technology & Entrepreneurship: India’s Roadway to Development

Based on my interaction with Dr. Ashok JhunJhunwala, TENET Group, IIT Madras

Often, I’m asked about the state of ‘research’ in India. In spite of having one of the best educational institutes in the world, IIT, not much has come from India that can impact the world. Academic research has been the key driving force behind the innovations in the west. So why is it different in India? How can the academia contribute to the country’s growth? The first step can be taking lab research out to the market as a fully functional product. But what is developed in the labs is a prototype and cannot be mass manufactured; though it works for a few hours and suits academic observation but not the industry. The academicians need to work in collaboration with the industry and redesign the product to suit market needs. Though there are cadres of people here and there who have started implementing this, this academia-industry collaboration amounts to hardly one percent of faculty.

There also needs to be an increased academia-industry interface so that technology can be used more effectively to solve every day problems. When I had come back to India in 1981 after completing my masters from the U.S., I remember applying for a telephone connection for my home and I was told that it would take at least 8 years to get one. When I came across a similar response when I wanted to apply for an LPG gas connection, I thought, “If it took 8 years for the upper middle class to get a telephone then what about the middle class and those from the lower middle class and others. Being a part of one of the best institutes in the world and with the amount of funds that the institute has access to, we should fundamentally transform India.”

We at IIT-M started focusing on ways to get into the industry and see what their needs were and what we, as academicians, could contribute. During one such brainstorming sessions we came up with an idea called the ‘paanwala telephone’ to solve the telephone problems.

Almost every street in the country had, as it still has, a ‘paan’ shop and it was unique because it was open for almost 16 hours a day, 365 days a year. Why not put a telephone next to every such shop, which would be accessible within 50 meters of every house? When people make calls, the shopkeeper could have a part of the money charged. This is how the STD/PCO booths we have today at every street corner came into existence.

This initiative was launched within two years without much investment and we saw almost 700,000 STD/PCOs set up all across the country. This single-handedly revolutionized the telecom revenue. What is more, all of a sudden connecting to people within or across the cities became an affordable reality for ordinary middle class people.

This early stage entrepreneurship contributed significantly to the development of the nation. We also observed that though India was a very large market, if you tried to couple it with entrepreneurship, then it could really take off in a big way.

India is essentially a cost sensitive market. Hence, by implementing ideas from the west here just as they are will not work. One needs to redesign the product for the Indian audience and bring down the cost by a factor of 2-3. This is where innovation comes into play. I remember that in the mid eighties, shampoo was considered a product for the upper class. Then someone had an idea and introduced shampoo in sachets for Rs. 1-2 and it immediately became a household product for the middle and lower class people. Similarly, the ‘Nirma‘ detergent powder, which reached the consumers at the right price, broke the barrier and expanded the market rapidly to become a dominant force. Today, this is what Ratan Tata has proved with his NANO at a larger scale.

Observing this, the early learning we had was that entrepreneurship could contribute significantly to the country more than any thing else. If one can create enterprises that scaled for a countrywide reach, then one is very much contributing to the development of the nation. Over the years, I have seen several people in IT doing the same.

Many people that started entrepreneurship in IT have made a mark, but at the same time there are bottlenecks that have kept many others from flourishing. One such thing is the stringent and complex policies we have, which make any process complicated and time consuming. Two decades ago, when some of us at the IIT-M suggested buying a personal computer for our institute people discouraged, saying that the process would be too complex. Still, we approached our alumni to collect about $1,500 (that is what a PC cost in those days) and asked them to ship it to us. Though it reached India soon, it took us nearly one year to get it cleared from the custom department because of the difficult process.

Having experienced the problems such as those with the customs, we re-looked at the framework of several policies. For example, we opened up the telecom market for private investment. We also developed new technologies that helped bring down the capital expenditure and cost of operations, making telecom affordable in India.

Also, two decades ago, it was difficult to incubate companies in educational institutes because it was not considered their primary role. Educational institutes were supposed to focus only on the academia and research and not the business aspect of it.

But it is not so now. Students nowadays are very enthusiastic to create businesses around research. The government too has realized the importance of research and today it is funding research more liberally than the west. All wings of the government such as the Departments of Science and Technology, Industrial Research, Information Technology, and Biotechnology have started encouraging entrepreneurship and are granting funds to set up incubators in the institutes across the country. There is also a council being set up to monitor and evaluate research projects and fund the promising ones. A large number of incubators, close to 30-35, have already been set up and are also being supported by organizations like TiE and angel investors.

Now that the urban India has started aggregating wealth, the next focus has to be on rural India, which I feel can benefit from technology and entrepreneurship just the way urban India did a decade ago. In a step towards this, IIT-Madras has set up RTBI cell (Rural Technology and Business Incubator) that currently incubates close to seven companies that are working towards the development of rural India.

In the next 5-10 years, I see India surely making a significant mark in terms of innovation both within the country and at the global level.

What will Facilitate ‘Research’ in India?

Based on my interaction with Dr. M.S Ananth, Director, IIT Madras

It’s important to give all that you have when you have the chance. Most of the technologists in the Valley may not be contributing their all, but they put the best efforts to contribute back to their alma mater. Gururaj Deshpande and Kris Gopalakrishnan, among others, are some of the biggest patrons of IIT-Madras. This culture is what IITs are benefiting from today. The early Indian technologists, who migrated to the U.S. and attained numerous achievements, are now returning back to their alma mater. This reflects the pool of highly successful technologists the IITs have created in the Valley. Statistics show that over 50 percent of the Intellectual Properties in the U.S. have Indian names behind them, of which 70 percent are IITians. Of the estimated 35,000 IITians in the U.S. today, a majority is known to founding technology companies, filing patents for disruptive technologies, or heading technology teams. The IITians rule the roost in the corporate ladder as CEOs, presidents, or head researchers indicating their significant role in driving innovation in the Valley.

Such an achievement needs to be at least partially attributed to the quality of education the IITs have continued to impart to all its students starting from the under graduate level. The curriculum in our institutes ensures that the student does not have any holes in his background, while the education in MIT or Princeton is more liberal and it is possible for students to graduate with important subjects left out. In fact years ago, during one of my trips to Princeton, I had a chance to meet Professor Reed of the Chemical Engineering Department of MIT and he told me that IIT under graduates were exceptional in that their knowledge was without holes.

In spite of such vast difference in the quality of education, the U.S. has been identified as the hub of technology research. One needs to understand that the U.S. has always had the right climate for research, while other countries are just catching up. For years, the U.S. has been bringing bright minds together in its graduate schools because it is a country of immigrants and the cultural differences actually make it effective for people to grasp things better. It is all about a meeting of unlike minds.

University Research Parks in the U.S. have been fertile grounds for innovation. Louis Pasteur once said, “…discovery is the result of chance meeting a prepared mind.” We have been preparing the minds well for several decades and chance has been meeting them in the Silicon Valley.

Research Parks bring together three kinds of minds – that of the faculty that is well versed in their areas of specialization, that of the industrial researcher who sees the opportunity in ideas applicable to the market place, and the student who is unburdened with knowledge and is not afraid to articulate creative yet unusual ideas. This combination has worked very well and our students who have gone there have been very creative.

It need not be misunderstood that research is not prioritized in India. For example TENET, a group founded and headed by my colleague Professor Ashok Jhunjhunwala over two decades ago, has been focusing on innovative research in the field of telecommunication and networking. Starting with a fund of $500,000 from Analog Devices during its early days, TENET has since incubated over 16 technology companies that spun off its research projects. One such company, Midas, recently crossed the Rs. 1,000 crore mark.

Focusing on the importance and need for research, we have been developing several programs that will facilitate research and development in India. The last five years have also seen a tremendous headway in the institute’s research activities. The number of research publications has tripled in eight years, indicating that the faculty is taking research more seriously than before. On an average, we now graduate nearly 200 PhD students a year in science, engineering, and humanities. Of the 1,000 articles published annually, about 750 are in international journals. This number used to be merely 250-300 till 2001.

Currently, IIT-M is building a first of its kind university research park in the vicinity of its campus, which will aid both in-house and industry related research bringing together people from R&D centers of companies, our faculty, and students. Spread over 11.5 acres, the park is being modeled after the ones at MIT and Stanford. Nearly 30 companies have already signed up for research and we hope to see close to 100 companies joining the effort by the time the park is fully built.

Alumni too have been giving back to the institute both in terms of research funds and expertise. Venture capitalists have been investing in early stage entrepreneurial projects, leveraging the institute’s incubation cell. Of every five projects that the IIT proposes, four get funded, which is a feat in itself.

With the foundations for eight more IITs in the country laid, it is a positive sign for the emergence of India as an innovative research hub of the world.