PremiumIndia’s startup scene has received a substantial boost in recent years due to specific policy interventions by the government. This focused effort is helping create a stronger ecosystem for emerging entrepreneurs to see their ideas take flight. The US is the envy of the world due to its renowned startup hubs like Silicon Valley, Boston-Cambridge, Seattle, the Virginia Tech Corridor, among others. Many organizations in the US are looking at ways to partner with Indian institutions and startups for mutual success. Such initiatives can set in motion a new, deeper phase of US-India commercial ties in the future—unburdened by the distances and tensions of the past.
India’s entrepreneurs have suffered from generations of neglect yet found have success. Perhaps this relates to Gurcharan Das’ famous book, “India Grows at Night"--neglect being a better policy for success than willful attention by policymakers. However, smart policy interventions by government agencies can be an additive for entrepreneurs, and government policy that incentivizes ecosystem development can have a compounding impact. Using the annual Budget Speech as a proxy for government policy priorities, entrepreneurs received scant attention during the Vajpayee and Singh governments. New and updated programs launched in recent years like the Atal Innovation Mission at NITI Aayog and Startup India at Invest India are taking concrete steps to build out better ecosystems for India’s entrepreneurs.
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Premium The US has several world-leading geographical ecosystems, and these startup ecosystems have built-in connectivity with India. There are notable existing initiatives that connect key US startup players with Indian counterparts. For instance, the India Innovation Growth Programme organized by Lockheed Martin, Tata Trusts, and the Indian Department of Science and Technology, which helps upgrade the skills of promising entrepreneurs. Another high-profile example is the Indo-US Science and Technology Forum, hosted by the US Department of State and India’s Department of Science and Technology. A third such program is the Nexus Incubator, a startup incubator in Delhi run by the University of Texas-Austin in partnership with the US Department of State.
Such programs should be amplified and replicated. In the coming years, the two governments must consider creating a high-level platform to look at ways of augmenting such partnerships. There are natural complementarities, but engaging India’s startups will also have important longer-term benefits to our overall partnership.
First, let us look at our complementarities.
Incubator/accelerator development: India’s new startup initiatives are trying to jump-start efforts to create accelerators and incubators to help young companies grow; however, India lacks a deep bench of experienced managers for these types of operations.
Access to Capital: This is an area of real US expertise. India needs to expand access to capital; US investors are hungry for high-growth firms.
Mentoring: Mentorship is a crucial part of an entrepreneur’s journey. Members of the Indian diaspora that have had success as entrepreneurs would likely jump at the chance to work with entrepreneurs from their homeland if easier channels to engage could be created.
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Premium Premium Of course, simply having the capacity to help India’s pursuit of a more efficient startup ecosystem is not sufficient to engage at senior levels. But there are also critical strategic reasons expanding our innovation linkages is important. These include:
Cooperation in other developing nations: India’s constraints in delivering basic public services are shared by many developing nations. India’s entrepreneurs are constantly developing new products and services that improve livelihoods. Such innovations should be carried to other nations that require assistance.
Improving livelihoods in the US: India’s “frugal innovation" environment will yield important products and services that can be applied back here in the United States. Remaining abreast of Indian innovation can be a crucial platform to improve Americans’ lives.
A bridge to India’s future leaders: India’s entrenched conglomerates have largely been slow to embrace trade and competition. Their impact on policymaking is presenting real headwinds in overall US-India commercial relations today. But India’s entrepreneurs are more likely to embrace competition and to push back against rash attempts to curb data flows and other attempts to preserve an older order.
Many countries have tried to emulate the success of American innovation hubs like Silicon Valley. The exact mixture of policies, institutions and social values can be hard to quantify but not impossible. India clearly has the talent, and the daily obstacles faced by people become opportunities for innovation. The US has people and institutions that are already serving important roles in helping India’s nascent startup ecosystems. Successes can be amplified with proper attention by policymakers, and more such partners can be recruited to widen the effort. The exertion will pay off over time. Connecting innovators can be the key to turn our commercial relationship from an area of friction to an area of world-class success.
(Richard M. Rossow is Wadhwani Chair in US India Policy Studies, The Center for Strategic and International Studies, Washington, DC.)
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