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View from India: Bengaluru’s innovation draws international investment

Karnataka, with its digital preparedness and a skilled workplace, has become a sought-after investment destination. Global collaborations have opened out new avenues and enhanced the state’s GDP.

India’s demographic dividend owes credit to the massive pool of highly skilled, competent and educated workforce. Indian corporations have a big advantage in adopting digital technologies both at a faster pace and also cost effectively, given that most of the globally applicable innovations and solutions are coming out of laboratories based in the country. This has resulted in an increased influx of investments into the country in recent years.

“When we talk about India, it is imperative that we mention Karnataka, as it has been one of the key contributors towards the technology and digital ecosystem growth of the country. Karnataka is one of the most prosperous states in the country, with an estimated GSDP (gross state domestic product) of $220 billion,” said Thaawarchand Gehlot, governor of Karnataka, speaking at the Bengaluru Tech Summit 2021. The state has propelled the development of sectors such as information technology (IT); information technology-enabled services (ITES); electronics; machine tools; aerospace, and biotechnology.

Karnataka, along with its capital city Bengaluru, has taken several steps to develop an effective future-ready digital ecosystem through adoption, increased access and affordability of digital technology.

“Bengaluru and its technology ecosystem will be in the driver’s seat for the next stage of the technology revolution. However, what needs to be addressed is the manner in which technological changes will impact our society and improve the lives of citizens. It would make sense if the tech impact can enhance the liveability of citizens,” pointed out Dr CN Ashwath Narayan, Minister for IT, Government of Karnataka.

For instance, artificial intelligence (AI) can be leveraged for the benefit of farmers to improve crop yield predictions. The massive advancements in space and drone technology is known, but can it help in improving flood management and disaster relief? How can the gains in delivery of vaccines and medical R&D achieved over the last year help to ensure that citizens in remote areas receive better healthcare? Hopefully, the state could address many of these issues, given its strong IT foothold. It is already the national leader, accounting for 40 per cent of India’s software exports and 25 per cent of the State GSDP. In biotechnology, Karnataka has emerged as a leading player, with the State’s share in the national bio economy increasing to 38 per cent to reach $24.4bn in 2020-21.

These numbers are encouraging and to put things in perspective, the state is home to premier higher education institutions such as the Indian Institute of Science (IISc), Indian Institute of Management (IIM), International Institute of Information Technology (IIIT) and several others. These institutes have diverse streams of learning, many of which are multidisciplinary in nature. They have opened out channels of research and incubated new ideas. Karnataka and Bengaluru in particular are talked about as being the 'Startup capital of India' and one of the leading startup capitals of the world.

The sum of all this is a diverse talent pool which has contributed towards Karnataka’s growth and development has happened over the years. This may also be attributed to ecosystem partners including MNCs and the startup ecosystem with robust support from incubators and accelerators. Several collaborations have opened out new opportunities, as knowledge-sharing platforms are created through partnerships. As Naftali Bennett, Prime Minister of Israel put it, “India is one of the world’s biggest economies with digital expertise. Israel is a powerhouse of innovation. Technology can be used to save lives; in fact, opportunities are endless. Entrepreneurship, pragmatism, practicality and productivity can bring technology to the lower rung of the pyramid.”

Digital platforms can help in delivery outreach and Bengaluru, the tech capital of Karnataka has contributed to several such platforms as it is home to over 400 Fortune 500 companies. “Most companies have a high-quality workforce working in Bengaluru, focusing on product development, IP creation and research and development. These multinational companies and global in-house centres are substantial contributors to the State’s GDP,” highlighted Basavaraj Bommai, chief minister of Karnataka. India aims to be a $5tn economy by 2025 and the state of Karnataka intends to be a major contributor towards this vision.

It’s no surprise that investors and foreign collaborators have become part of the tech journey. Take the case of Australia, which signed a comprehensive strategic partnership with India in 2020. “We’re sharing expertise on cyber and critical technologies like quantum computing and AI. We’re working to make our supply chains more secure and resilient. We’re collaborating on the mining and processing of critical minerals – like cobalt and lithium and rare earth elements – that are vital to clean energy technologies and have military applications,” explained Scott Morrison, Prime Minister of Australia.

Describing Bengaluru as the world’s fastest-growing technology hub and home to a third of India’s unicorn companies, Morrison indicated that Australia is also seeking to establish a new Consulate General in Bengaluru. Australia’s new mission in Bengaluru aims to expand its diplomatic presence in India to five posts. Ties with India’s innovators, technologists and entrepreneurs - as well as the government at all levels - are in the offing.

Karnataka has been one of the leading states in technology adoption and the Government has been forthcoming in encouraging innovation and facilitating platforms for its growth in all areas. Digital transformation continues to streamline government operations, optimise costs and create transparency for end-users and citizens.

“IT-BT collaborations should be shared and harnessed for bringing a change in the lives of the people. Bengaluru is a happening place in the nation where knowledge sharing should be leveraged for the benefit of all,” observed Venkaiah Naidu, Vice President of India.

Modern India has had a strong focus on science and technology as it is a key element for economic growth. India now ranks third in terms of the most attractive investment destinations for technology transactions globally. New York headquartered Kyndryl, which was spun-off of IBM IT infrastructure services in 2021, has expressed the need to leverage the country’s digital capabilities. This could probably be due to the fact that 65 per cent of the global GDP will be digitised by 2022 as per the International Data Corporation (IDC) forecast.

“Our role in India is to be a trusted partner to the people and to the enterprises here that are working hard to build and extend next-generation digital infrastructure across India. Kyndryl is supporting complex infrastructure in areas like banking, telecom and supply chain that are key to providing citizen services across the country,” said Martin Schroter, chairman and CEO, Kyndryl, which has a presence in Bengaluru. Schroter described the work as critical: “It aims to expand access to the digital tools people will use to plug into greater economic opportunities, no matter where they live. Because after all, we don’t live in an economy, we live in a society”.

As digital competence improves and connectivity becomes omnipresent, technology is poised to quickly and radically change nearly every sector of India’s economy. That is likely to create significant economic value and change the nature of work for tens of millions of Indians.

“The pandemic has compelled us to re-set and re-build the future. Now it’s important to use creativity and imagination to build a future which is more sustainable. Technology should be more inclusive and, more importantly, it should put the human at the centre of every conversation,” said Prof Klaus Schwab, founder and chairman, World Economic Forum.

“This decade will be the 'techade' for India because of its tech expertise. The decade will be shaped by people-centric technology. In short, technology should be unleashed to impact lives. The digital foundation should build strong highways to ensure the growth and development of people and society.”

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