Deep Tech to power up the next big transformation in IT

The last decade has been a key turnaround for the digital technology world. While the pandemic has been devastating for humanity at large, it has also opened a plethora of opportunities for tech startups, and they have shown great agility in capitalizing on it. Today, we are witnessing rapid digital transformation and adoption of SaaS (Software as a Service) based solutions.

Deep tech has become integral to the startup ecosystem and as per a report by NASSCOM 19% of Indian technology driven start-ups are already leveraging the deep tech innovations to develop product enhancements and command greater market share.

As per the immensely encouraging data available, 14% of startup investments in 2020 were made in deep-tech startups, and the number is up from 11% in 2019. Among these, 87% of all deep tech investments have been garnered by the Artificial Intelligence/Machine Learning (AI/ML) powered startups in the year as per a report by NASSCOM.

The road ahead with Deep Tech

The impact of the pandemic has made us discern the immediate need for smart automation and contact-less technologies. There is a growing need for “intuitive, smart, self-reliant, customized and consistently improving tech” to power the digital transformation 2.0. Considering the humongous population in the country, deep-tech solutions have achieved the remarkable goals of catering limitless benefits in diverse areas. The early momentum witnessed in 2021 indicates that the year will be a positive development period for the Indian tech startups and the country will make steady progress towards the goal of $1 Trillion digital economy.

Impressively, the overall digital maturity of our country reached 55% in the year gone by as compared to 34% in 2018. We can now, confidently predict that Deeptech and the incredible potential of the Indian IT sector is going to pave way for consistent growth in the years to come. According to the report by NASSCOM on Indian Tech start-up ecosystem, it is expected that the deep-tech and startup hubs will see a steady 40-45% CAGR. While the investment volumes were lower in 2020 compared to 2019, we will now see recovery in the rate of growth and investments, and match or perhaps exceed the 2019 levels in 2021. The country is well poised to have a club of over 50 Unicorns and some impressive Mergers and Acquisitions deals as well as IPOs, anticipated in this year.

The potential of Indian deep tech sector

We have observed the extensive economic growth in the US and Europe, driven by technological innovation and coordinated efforts across industry verticals. There are numerous listed path-breaking startups that have grown to reach hypergrowth. Today, India too has harnessed the power of technology to enhance the growth storyof the economy through the innovations by startups. It is quite thrilling and incredible to imagine the potential of the startup programs launched by industry bodies such as NASSCOM and FICCI.

India is a global IT powerhouse, and this makes the environment conducive for deep-tech startups to evolve and expand. The key is to leverage the existing expertise, and develop a pro-digital infrastructure across verticals. The Government of India has already taken dedicated steps and is laying great emphasis on creating a digital technology driven ecosystem as underscored by the last two union budgets. The IT fraternity has taken note of it, and now the goal is to build new, unique additions to the existing digital technology stacks that would make a difference in the global market.

To harness this potential, sustained investment and a culture of collaborating with non-captive partners is required. When exploited fully, deep tech can deliver significant transformation over the existing technologies. The idea is to develop a golden quadrangle comprising of Big Tech – Deep-tech – Academia, and SMEs with industry bodies like FICCI and NASSCOM at the axis, to facilitate growth and provide direction. The potential of Indian innovation is clearly exemplified by the 10,000 Startups program by NASSCOM, and with the right navigation, there is ample scope to expand the 10,000 into 1 million startups.

Collaborating with Industry bodies

Deep-tech startups are transforming India into a next-gen business ecosystem. To fortify these efforts, enterprises and industry bodies are collaborating through various platforms and initiatives like NASSCOM’s Deep Tech Club programme, to further leverage the innovation and capability element of these startups.

NASSCOM’s Deep Tech Club programme has been an outstanding initiative and organizations like Tech Mahindra have been collaborating with various stakeholders from that ecosystem in AI, ML, Big Data, Natural Language Processing and Blockchain alongside building the futuristic open source-based NAD (New Age Delivery) platform while continuing to nurture the startups as a tech incubator. Developing solutions collaboratively and has also opened a reusable digital asset marketplace for the startups to use as a nesting space for their solutions/frameworks as well as to market it to the current customer base.

This enables the startups to open up a new revenue channel instantly. They get the flexibility to use the platform as a R&D environment and also to monetize their commercial solutions. These partners are also able to use NAD platform in a hosted environment which offers them options such as rapid solution design blueprinting for development and deployment. They can avail of the services in a pay-per-use model for the whole software delivery lifecycle driven by reusable assets. This increases the agility and velocity with which the companies are able to generate fantastic Capex and Opex benefits.

By Jagdish Mitra, Chief Strategy Officer and Head of Growth, Tech Mahindra