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In News
- The government is making a concerted push for self-reliance in military technology, semiconductors and science-based businesses.
About
- What is Deep Tech?
- Deep tech, or deep technology, refers to those startups whose business model is based on high tech innovation in engineering, or significant scientific advances.
- For deep tech, the business starts with and circles around some sort of real innovative technology.
- The main areas deep tech startups are working in are artificial intelligence (AI), life sciences, agriculture, aerospace, chemistry, industry, and clean energy.
- Deep tech startups often need large investments over a longer term, and good amounts of research.
- Deep Technology is almost always dual use.
- For example, position navigation timing technology such as GPS is needed for Google Maps and Uber but is also an extremely important aspect for fighter jet navigation and missile systems.
- What is general purpose technology?
- It refers to technologies that have a wide range of abilities, substantial scope to grow and improve, and the value to affect an entire economy and worldview.
- Our way of life, economic and national security is underpinned to certain general-purpose technologies (GPTs).
- Examples of GPTs are the steam engine, electricity, and information technology.
- Currently, four technology battlegrounds exist:
- Semiconductors
- 5G
- Revolutions in biology and
- Autonomy.
- Each of these is vulnerable to military conflict, health emergencies and natural disasters.
Major Challenges faced by Deep Techs
- Venture capital
- There is a market failure when venture capital will not invest in this asset class, and government money is not nearly enough or is not fast enough.
- Dual use
- These technologies are of dual use and have steep entry barriers. These are also areas where India is still at the base of the ladder.
- Government Funding
- In the United States, Israel and North Atlantic Treaty Organization countries, the government is still the largest source of funds for Deep Tech.
- Billions of dollars of funding flow in through agencies such as the Defense Advanced Research Projects Agency, the Directorate of Defense Research and Development and the Defence and Security Accelerator.
- In India, this funding remains unbuilt.
- Non willingness of the investors
- The Indian venture capital ecosystem is not even willing to discuss and invest in deep techs.
- Not only do investors not understand Deep Tech but also investing in fundamental technology does not fit the 10-year fund return cycle because it takes much longer to mature.
- Burden sharing
- We need to be cognisant of the fact that strategic technology cannot become the burden of commercial industry alone.
- Funding
- While the Government of India is changing with the launch of the Indian Semiconductor Mission and the Ministry of Defence’s flagship iDEX and TDF schemes, depending solely on an already stretched pool of funding is not the solution to galvanise the ecosystem.
Way forward/ Steps to be taken
- World-class deep tech capabilities
- In order to become a developed country in 25 years, India will need to build world-class deep tech capabilities in certain sectors.
- Utilisation of CSR budgets
- CSR has traditionally been utilised for the social sector. However, this growing corpus should also be used for the development of strategic technology.
- Large corporations can be incentivised to use some of this budget to serve the strategic needs of the nation. The Government should allow these funds to flow into certain strategic tech startups.
- High net worth (HNI) companies
- HNIs can also be offered tax incentives to make equity investment in the same critical technology start-ups.
- Qualifying criteria
- To prevent a misuse of funds, it is important to create qualifying criteria.
- The pool of investable companies must be limited to Government of India-recognised start ups; startups should have funding or ‘acceptance of necessity’ granted from the Indian military/Ministry of Defence.
- Atmanirbhar Bharat
- India will remain a net importer of critical technology in the foreseeable future.
- Prime Minister’s vision for an Atmanirbhar Bharat has created the right momentum, it will take close to a decade or more to fructify.
- India as developed nation
- The Prime Minister talks about his ambition for a developed India; an India that is a superpower.
- Investing in deep, critical technology is the first step for the country to awaken to that ambition.
Source: TH
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