I started my company Biocon in 1978 as the country’s first biotech startup in an era where innovation and entrepreneurship were unheard of. Biocon began its journey as a garage startup with a total of three employees, including myself. Today, we are an innovation-led global biopharmaceuticals company that is catering to the unmet global need for affordable life-saving medicines.
Besides making a huge impact on global healthcare, Biocon has, over the years, created over 12,000 direct jobs besides having a multiplier effect on employment through the several ancillary businesses it relies on or supports.
Companies like Biocon and Infosys have demonstrated how unleashing the power of entrepreneurship and innovation can bring multiple benefits to the country and usher in a better life for millions of Indians.
Just as Biocon pioneered biotech in India, Infosys sowed the seeds of India’s US$180 billion information technology industry that employs over four million people directly and has created 12 million indirect jobs. The industry today contributes as much as eight percent to the country’s GDP.
Companies like Biocon and Infosys have demonstrated how unleashing the power of entrepreneurship and innovation can bring multiple benefits to the country and usher in a better life for millions of Indians.
Incentivising innovation and intellectual property (IP) creation is important for India’s future growth prospects. Enabling entrepreneurs to propel ideas into sustainable businesses will add value to our economy in the long run and help the country achieve self-reliance, thus realising Prime Minister Narendra Modi’s dream of an ‘Atmanirbhar Bharat.’
The importance of encouraging innovation
In India, there is a lot of talk about ‘innovation.’ But ‘Made in India’ innovations are rarely discussed, leave alone celebrated.
In the US, Moderna Therapeutics recently initiated Phase III clinical trials for its promising coronavirus vaccine candidate and is one step away from bringing the product to the public. Moderna took its vaccine from the lab in Cambridge, Massachusetts, to human trials in a record 63 days. This was possible because Moderna’s candidate was part of Operation Warp Speed, the US government project led by the Department of Health and Human Services.
‘Made in India’ innovations are rarely discussed, leave alone celebrated.
The fact that Moderna is being feted by the US president himself speaks a lot about how innovation is respected and encouraged in the country. It also explains why the US consistently ranks first worldwide in cutting edge innovation.
Contrast this to the experience of Bugworks Research, incubated at the Centre for Cellular and Molecular Platforms (C-CAMP), Bengaluru, with support from the Karnataka government and the Department of Biotechnology-Biotechnology Industry Research Assistance Council (DBT-BIRAC). Bugworks is among the few companies worldwide working on addressing a big unmet need of finding solutions to the growing global problem of antimicrobial resistance, which has serious implications for global health and the world economy.
Bacterial pandemics can be as deadly as COVID-19-like viral pandemics and result in millions of deaths globally. Yet, Bugworks has had to look outside of India for funds to advance its pipeline of experimental therapies. The latest round of funding amounting to US$7.5 million came from a global investment syndicate led by the University of Tokyo Edge Capital, Japan; Global Brain Corporation, Japan; and Acquipharma Holdings, South Africa.
The lack of funding support in the country forces innovators in India to park their IP rights outside the country. As a result, India continues to languish behind peers in the Global Innovation Index; we ranked 52nd compared to China’s 14th ranking on the index in 2019.
The lack of funding support in the country forces innovators in India to park their IP rights outside the country.
India needs to do more if we are to retain IP within our borders and derive value from our innovations by monetising them at a global level.
But first, we must build the credibility of Indian innovation within our borders and convince people that the quality of research done in India is at par with the best in the world.
The missing link
While India has the scientific talent, we do not have the deep pockets and the enabling ecosystem that drives most of the innovation in the West. Often, we end up doing innovative research for global pharma companies as contract research service providers. We do not aim for breakthrough innovation because this kind of innovation does not get due recognition at home.
This mindset is reflected in the fact that India spends less than one percent of its GDP on research and development, lower than most of its global peers.
We do not aim for breakthrough innovation because this kind of innovation does not get due recognition at home.
Also, investors in India prefer predictable, imitative business models and me-too products, where they have the visibility of assured returns.
On the other hand, business models that are truly innovative, first of its kind, and thus untested, find no takers among the investor community here. Real innovation has an inherent element of high risk, which Indians are averse to. As a result, you do not see people in India investing in real innovation.
Take biotech for instance. Most biotech companies in India operate in the low-risk services and generic diagnostics, vaccines and therapeutics space. The ones that take the risky, time-consuming journey of bringing breakthrough medical innovation from the lab to market — like Biocon — are ignored.
Today, neither venture capitalists (VCs) nor the market value innovation in India.
Biotech startups do not even show up on the radars of venture funds. In fact, it is the Indian government that is basically playing the role of a venture fund for the biotech industry. The government has come forward to provide seed capital and risk capital. It is investing in startups and funding their efforts to take forward their ideas to the proof-of-concept stage and beyond.
Biotech startups do not even show up on the radars of venture funds. In fact, it is the Indian government that is basically playing the role of a venture fund for the biotech industry.
But even at the proof-of-concept stage and beyond, where venture funds usually step in with ‘accelerator funding,’ nobody from the private sphere is ready to come forward. As a result, many promising startups doing innovative research get stunted.
Venture capital funds are not comfortable investing in innovation in India because there is no attractive exit route for them. Many VCs will invest in India if they can cash out of their start-up investments via the IPO route. However, exiting via the capital market route is uncommon in India. The last Indian start-up to list on the Nasdaq was MakeMyTrip in 2010.
What India needs
In today’s knowledge-driven economy, innovation is the primary driver of progress. India’s ability to generate wealth and create social good will come to naught unless we monetise innovative ideas by unshackling our entrepreneurial spirit. For innovation to flourish, ideas must be funded and taken to market. Without capital, even the most transformative ideas can die before they take flight. Until we are able to create a funding-financing ecosystem, innovation in India will continue to be a far-fetched dream.
India’s ability to generate wealth and create social good will come to naught unless we monetise innovative ideas by unshackling our entrepreneurial spirit.
What India needs is a national innovation ecosystem that puts in place a financing cycle — academia generating ideas, especially those based on science and technology, which are incubated to proof of concept through government-sponsored seed and incubation funding and then taken to market through business intervention backed by venture funding.
Ease of accessing a market, both primary and secondary, and being able to raise capital with greater flexibility would spur innovation and unleash an entrepreneurial avalanche that would transform the pace of value-added growth in the Indian economy.
Though there is a lot of good innovation being done by women scientists in the country, we do not see them making a mark globally because they are constantly thwarted by an ecosystem that neither appreciates nor encourages breakthrough innovation.
Conclusion
Today, a large reservoir of entrepreneurial energy in India is waiting to be tapped. It is by investing in breakthrough ideas and embracing entrepreneurship as an economic model of growth that India will be able to unleash the power of innovation to ensure a better life for its billion-plus citizens.
The government must enable and support innovative startups and businesses that think locally but have the potential to make enormous global impact. By encouraging technopreneurs to grow from small and medium enterprises to large industrial scale operations, India will be able to create a compelling opportunity to take innovative ideas to global markets. In doing so, we will be able to garner a large share of the global value chain and combine both ‘Make in India’ and ‘Innovate in India’ to deliver an Atmanirbhar Bharat.
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