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PM Modi’s Silicon Valley Visit : Critical Analysis Of The Expectations And Cautions

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World’s second most popular political leader (our beloved PM), is in the US again — second time since he took up the PM office. And  once again, he seems all set to surpass the excitement, curiosity and hysteria he generated last time among NRI Indians and Indians back at home when he enchanted the crowd at Madison Square.

This time, apart from his attendance at the celebrations of 70 years of UN , there is an altogether different level of enthusiasm related to the possible implications of his visit on the emerging startup ecosystem in India.

It is after over 30 years that an Indian Prime Minister is visiting the West Coast area of the United States, more fondly known as the Silicon Valley. This is a major highlight of his visit due to his meetings scheduled with the top names of Silicon Valley; Tim Cook, Mark Zuckerberg, Satya Nadella, Shantanu Narayan, Sundar Pichai along with his visit to Facebook, Google and Tesla offices.

In addition to this, he will be participating in the first of its kind startup event ‘India-US Startup Konnect’​featuring 30 Indian and 17 Silicon Valley startups on a single platform presenting their ideas and products from myriad of sectors such as agriculture, healthcare, energy, financial inclusion, and biotechnology along with leading technology business incubators in the country.

The event is being organised by the Indian software industry body NASSCOM, TiE Silicon Valley and IIM Ahmedabad’s business incubator CIIE on September 27.

In the words of PM himself from his Facebook Post,

An event that I am enthusiastic about is the ‘India-US Start-up Konnect.’ India is emerging as a hub of startups in a wide range of areas and we aspire to take this further. We want the world to see our innovation capabilities in the startups sector. At this event, a group of Indian startups will showcase their innovation and forge partnerships with the vibrant American startup industry

Since Modi has come into power, his prime focus has been on making India a central hub of technology, innovation, research and investment along with his efforts on easing the norms for doing business in the country.

Be it his Digital India campaign to digitize the country or his recent “StartUp India StandUp India” campaign; whether it is his focus on Skill Development or his pet project Make in India, he has made his intentions quite clear by consistently coming up with new initiatives to foster growth and development in the country.

His visit to the Silicon Valley — which can be safely called as an epitome of global startup scene — becomes all the more crucial in this regard. Hence there are sky-high expectations from Modi as far as the Indian startup ecosystem is concerned which is still struggling due to archaic laws and absence of adequate infrastructure. Despite that, it is showing incredible potential for growth and development and needs support from the government.

Let’s look at some of the areas where Modi and his visit to Silicon Valley are expected to have some major game-changing influence :

Development of a startup and business friendly ecosystem in India

Silicon Valley is known for its extremely business friendly and thriving ecosystem which provides immense scope of growth for new startups and businesses. This is something which many Indian entrepreneurs and businessmen have time and again mentioned to be completely lacking from the Indian scenario plagued by stringent government policies and an inefficient system which makes it highly unfavorable for doing business in the country.


Whether it is the extremely complicated rules of entry and exit for a new company or the legal difficulties in the flow of capital in and outside the country, these are some crucial pain-points of Indian entrepreneurs and investors alike. And the there is India’s huge infrastructural problems, which have literally stalled the country and glutted it from progressing at a rapid pace.

And to really ensure the success of his campaign, Modi may take a leaf or two out of the extremely conducive environment at Silicon Valley. This is the area which would have the most significant impact on the startup culture in India in the coming years.


Push to on-demand service based startups 

If one looks closely at the current mushrooming startups in India, a majority of them would be found to be from on-demand service based segment. Ola, BigBasket, TinyOwl and other big names are just the mere tip of a huge iceberg. There is an entire crop of such service-based startups coming up, backed by technology and based locally in Tier-2 and Tier-3 cities which are catering to the day to day demands of urban Indian professional.


These demands may range from dry-cleaning to grocery needs to providing electric repair and food ordering services.

These startups primarily, based on technology, are comparatively easy to start and have the potential to generate income for many young technocrats being passed out every year who are increasingly looking forward to entrepreneurship either due to lack of jobs or to become independent.

However many of these startups prove to be just a bubble and quickly perish before a new one comes into their place, due to the lack of proper support and guidance, be it in terms of funding or the lack of required entrepreneurial skills and mentorship.

Despite this fact, there is no denying the fact that there is immense potential in this segment in emerging India, especially in the area of job creations for the increasing young workforce of the country. And to really boost the startup culture in India this is one area where we can see immediate and quick results and Silicon Valley culture is the hub and real origin of such culture.

Silicon Valley is home to such new-age on-demand service based startups, be it taxi aggregator Uber or the internet based grocery delivery service Instacart or the renting and accommodation marketplace Airbnb. And the experience and skills of the valley, although they are different from the Indian scenario, would definitely come in handy to develop a strategic plan to foster the growth of these startups.

More Mergers and Acquisitions and Yes, Investments

While there is a definite surge of foreign investment into the Indian startup scene from the likes of Sequoia Capital, Tiger Global, Softbank, Foxconn and many more, when it comes to mergers and acquisitions, Indian startups still lag behind their counterparts in rest of the world.


For instance, according to a report by Indian software industry think tank iSpirit, India saw M&As of 173 startups compared to 4177 US startups between 2011 and 2014. In terms of deal value also, for the same period Indian startups witnessed an average value of $11.3 million compared to $57.4 million and $113.8 million of US and Israel startups respectively.

The wide gap can be attributed towards both the lack of innovation in Indian startups on technology front and the lack of interest among investors and companies to acquire Indian startups due to stringent norms and business policies.

However, once the Indian startups gain visibility in the Valley region, things are expected to turn-around which is felt by many Indian entrepreneurs as well.

The Other side of Coin

However not everyone is too optimistic and have their concerns and apprehensions about the PM’s visit to the Valley. There is a reason why previous government might have been cautious of valley startup culture and particularly the investors. There is a growing concern among a particular section of society for whom everything is not sunshine and rainbow in the startup culture of valley.

A certain section argues that investors there, are primarily looking for making quick money and have little or no concern about the growth and development of a country. This indeed can not be too far from truth and is one of the double-edged swords with which Indian government have to be really careful while opening its doors to valley investors.

Another issue of concern is the privacy and data breach of individuals for which some of these companies are time and again accused of. Moreover given the fact that Indian PM seems to be in a hurry to digitize India and he is more likely to sought the help of modern superpowers of technology to achieve this goal, the concern becomes even more relevant.

It remains to be seen how many of these expectations and dreams see the light of the day but there is a definite air of excitement around the PM’s impending visit to the Valley.

People especially the budding entrepreneurs back home are eagerly waiting for some surprise announcements he might make during the visit. We will be providing an in-depth coverage of the same for the next 4 days. Stay Tuned.


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