India is poised to become a USD 5 trillion economy in 5-6 years and a USD 10 trillion economy in the next 10-15 years, with an aim to raise per capita income from USD 2000 to more than USD 6000. In the last 30 years, India’s GDP has grown five times, from USD 600 billion to USD 3 trillion.
India has witnessed a remarkable transformation in multiple industries such as consumer automobile, telecom and banking. In pharmaceutical and IT sectors, as was seen during the pandemic, India reaffirmed its position as the pharmacy and digital capital of the world.
India should now aspire to become a sustainable and inclusive economy that improves the lives of all its citizens and the world. Science, technology, research, innovation and entrepreneurship should be at the heart of our growth – in large businesses and in startups.
Back in 1960, the average lifespan of a company on the S&P 500 Index was almost 60 years. With the modern technology culture, companies listed on the stock exchange now have an average age of 20 years and the forecast has further shrunk to just 12 years by 2027. Five out of the top six companies by market capitalization in 2022 are highly technology intensive and innovative companies. As the shelf life of companies continues to shrink, there is a pressing need for large corporations to take action if they are to future-proof their organization.
Indian companies must invest much more in R&D & innovation and adapt to changing technology trends in order to thrive in the market. Companies must measure and aim for at least 30% of their revenues to come from new products introduced in the last 3-5 years. This fosters an environment of innovation and intrapreneurship within the organization and provides a platform for growth of its employees.
With respect to entrepreneurship, India is the third largest startup ecosystem in the world, with 100+ unicorns. Last year alone, India received over USD 40 billion in startup investments. Deep-tech startups nurtured in academic incubators and research park ecosystems leverage cutting-edge technologies in their products and offerings. Startups bring new innovative products into the market to improve the lives of the consumers and it’s time for Indian corporates to work closely with startups.
The CII Centre of Excellence for Innovation, Entrepreneurship & Startups (CII CIES) is enabling corporates to collaborate with startups and leverage the innovations that are currently taking place in the Indian startup ecosystem. The centre has developed a model, led by subject matter experts, to educate C-suite executives on the why and how to collaborate with startups. This is followed by a dedicated 16-week accelerator programme with a corporate on a one-on-one basis, in which the CoE helps these companies re-design their innovation framework and help them get a head start in the startup ecosystem. CII CIES is an industry-led initiative that works to increase the odds of entrepreneurial success in India by using its reach and resources to bridge critical gaps such as capacity, resources and linkages, through interventions.
CII CIES is also equipping family offices with knowledge and confidence to look at startups as an asset class and diversify their wealth portfolio to take an advantage of the growing startup ecosystem. It is important that we increase the domestic investments in startups, especially in Series C and later investments in startups. Not only will the Indian family offices and investors gain on the wealth that successful late-stage startups create, it also encourages startups to continue to expand in India; already many startups are taking the IPO route on the Indian exchanges. This will ensure that more Indians can participate and benefit from India’s startup growth story.
This article was contributed by Mr Kris Gopalakrishnan, Past President, CII, Chairman, CII CIES, Co-Founder, Infosys and Chairman, Axilor Ventures. It was first published in CII Communique, September 2022 issue.