India has been long known as the world’s outsourcing destination. From housing BPOs for the world’s biggest tech companies to moving forward as a manufacturing hub for the world, India has come a long way. The country is aggressively reinventing itself as an innovation hub and boasts of 27 home-grown unicorns who are leading the tech world in the Asian sub-continent.
While the earlier industrial revolutions paved way for western countries to develop, in the Fourth Industrial Revolution, the time is ripe for the country to emerge as a global technological hub. On the Global Innovation Index, India scaled up from 81st rank in 2015 to 52nd in 2019. It also ranks third in the world in terms of attracting investment for technology transactions. Much of this success can be attributed to the government’s initiative to foster an environment for young entrepreneurs and innovators who are willing to make a change.
Vice News, has recently released a documentary on the country’s growing tech market and how the nation is becoming a Silicon Valley of its own. The video highlights how the dramatic change in the country’s talent ecosystem has quickened the speed at which the industry is growing.
The documentary starts with the basic introduction of how India being an outsourcing hub of the world has helped it become an Innovations hub. India had always been a destination of low-cost, outsourced, software and support services since the late 1980s when the labor arbitrage model became a cost-effective solution for multinational companies. This outsourcing boosted the country’s wealth while also providing much-treasured employment and fuelling urbanization. The outsourcing industry in India was recently valued at $150bn.
But India’s growing population forced the industry to start catering to its own people. Many new BPO offices came up just to assist the Indian population with their technology. From being an unconnected nation with barely any connectivity in 2014, India has now come to the second spot in the most connected nation in the world. India currently has 560mn internet users and 450mn smartphone users who are constantly engaging with technology.
This technological transformation excited the country’s STEM (Science, Technology, Engineering, and Medicine) students to start innovating things and finding solutions to India’s problems. This STEM population got its fair share of recognition from the world when the “Y2K” happened. Indian’s had the answers to the programming world’s problems. Ironically, it was a zero that made way for the Indian STEM population to become a hero.
Soon after the end of the global economic crisis in 2008, Indian’s started working on business models that would cater to the Indians. A lot of new start-ups like Ola and PayTM came up providing solutions to the Indian population. This led to an increase in StartUp Incubators who were ready to help these young businesses and providing them with any kind of assistance.
India’s population demographics too, have contributed to the nation’s business growth. About 65% of its population is young and tech-savvy. These people have increased the consumer base for technological inventions. Businesses are now achieving the billion-dollar mark while catering only to the Indian population. Many of the Indian start-ups have now even moved their operations globally. Hospitality aggregator OYO, often called the “Jewel in Softbank’s portfolio” has its operations spread all over the globe and is currently only behind AirBnB in market share. Cab aggregator Ola too, has its operations worldwide but mainly in cities where it’s direct rival Uber is failing to pick up.
But a lot of this advancement has to do with government policies. While a lot has been done in that department, to maintain the momentum, there must be better regulations and an infrastructure that supports technological innovation, trains of its workforce, incentivizes the youth to stay in the country and attract foreign investment alongside domestic investment. If these conditions are fulfilled, India has an unmatched potential to become the next Silicon Valley.
Note: The article is based on the documentary by Vice News and facts presented by Ashok Lalwani in his article for Quartz India ‘With the right nudge, India can become the next Silicon Valley”.
Sandeep is a journalism and mass communication graduate with a keen interest in politics and business. He is a part of Research & Content team at HrNxt.com.