Deep tech needs deep investments
THE debate triggered by Commerce and Industry Minister Piyush Goyal’s remarks about the focus of Indian startups has revolved around innovation and job creation. He wants startups to work in deep tech areas like artificial intelligence (AI), robotics, electric mobility and global logistics. This is a reasonable expectation, given the government’s thrust on the promotion of startups and the opportunities that the vast consumer market of India presents. However, it would be difficult for startups to meet the expectation unless we address the underlying reasons for the situation described by the minister.
Most Indian startups are good at the application and adaptation of new technologies. Very few are engaged in novel technology development or commercialisation or scaling up of technologies and processes developed by Indian entities.
Technology development needs an ecosystem of fundamental research, link-ups with universities and a supply of requisite manpower. India did well in technology services because it had an ample supply of engineering manpower and this line of business did not need fundamental research. The country has performed reasonably well in life sciences with a good research system, partnership with academia and trained manpower. Indians working in outsourced R&D centres of foreign companies are developing new products and intellectual property for their parent companies. They can do so because they are backed by investment and are provided necessary tools.
Deep tech areas are driven by cutting-edge discoveries and high-level innovation, which in turn, can come only through deep and sustained investments in basic research and upgrading of universities. It is unrealistic to expect startups to come up with breakthrough innovations while the country spends less than 1 per cent of its GDP on research and development.
Quantum computing, for instance, has been one of the deep tech areas in the spotlight in India for the past couple of years. The government announced the National Quantum Mission (of which quantum computing is a focus area) with a funding of Rs 6,000 crore (about $735 million) up to 2031. It may sound like a big amount, but it pales in comparison with others — China has committed $15 billion of public investment for its quantum technology initiatives.
Publication of research papers is another important attribute of fundamental research in any field. The National Natural Science Foundation of China is significantly ahead of its US counterpart in quantum computing research publications. When it comes to patents, IBM, Microsoft and Google as well as specialised quantum companies like D-Wave and Quantinuum hold a large number of quantum computing-related patents. These are the sources of the quantum software stacks that other companies depend on. This could result in ‘international dependency’ in future due to possible export controls and restrictions, points out a new report on quantum science and technology prepared by the office of the Principal Scientific Advisor (PSA).
Deep tech is already being deployed to address problems in fields ranging from energy to medicine. One example is the combination of AI and high-performance computing (HPC) to hunt for new battery materials. By deploying an AI model developed by Microsoft, scientists at the Pacific Northwest National Laboratory of the US Department of Energy could screen an amazing 32 million potential candidate materials and find a novel material that could slash lithium electrolyte requirement by almost 70 per cent. The breakthrough work was led by material scientist Vijay Murugesan, who did his PhD from Bharathiar University in Tamil Nadu. This is a classic case of how deep tech innovation can address a pressing problem through industry and research institute partnerships. India has had an HPC mission for several years and strong material sciences groups, but we have yet to see such collaboration and outcome.
If the minister had cared to look at the draft of the National Deep Tech Startup Policy, prepared by the office of the PSA in 2023, he would have got answers to the questions he posed at the recent startup event. The policy, which still remains on paper, proposed “an increase in gross expenditure on R&D to provide renewed impetus to basic R&D, which would expand the emerging science base for deep tech startups and the critical base of trained scientific human resource.”
It also suggested amendments to existing research assessment systems in academic institutes and research labs to enable the translation of knowledge generated into entrepreneurial ventures. This could be done by creating technology commercialisation offices in research labs and providing necessary guidelines. In addition, faculty members need to be given incentives to let them undertake entrepreneurial risks. This way, they can either launch their own startups or transfer the technology to existing ones.
Besides enhanced R&D expenditure and industry-academia collaboration, the deep tech development depends on access to critical materials like lithium and rare earth minerals — the global supplies of which are controlled by China. Then there are strategic materials like advanced composites, carbon and ceramic materials that go into the sectors of defence, nuclear, space, aerospace and electronics. Access to such materials is also restricted.
Amid the tariff war unleashed by US President Donald Trump, deep tech development will become more challenging for both startups and large corporations in India. We need strong policy initiatives backed by necessary public investments to boost the deep tech innovation system.
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