India must look to quickly multiply its existing set of 100 unicorns and set its ambitions higher to compete with the Silicon Valley in becoming as vibrant as their ecosystems, Krishnamurthy Subramanian, Chief Economic Advisor to the Finance Ministry said.
“Private sector in the country should also have a change in mindset to invest in innovation for their profits and competitive edge,” he said, in an address at the 10th edition of the Indian Private Equity & Venture Capital Association (IVCA) Conclave held virtually.
Innovation, self-reliance
“When we talk of the capitalistic economy which relies on the invisible hand of markets, innovation needs to be invested in by companies. Self-reliance and not waiting for a push from the government can help in India becoming even more innovative and possibly the largest start-up ecosystem in the world. All that is required is a change in mindset and innovations will start rolling,” Subramanian said.
India is now the third-largest start-up ecosystem in the world. In the venture capital industry, a unicorn is a start-up that reaches a valuation of $1 billion. Subramanian highlighted that India had 100 unicorns because of the emphasis on the private sector and ease-of-doing business. “These unicorns have come on the basis of their sheer ideas,” he said.
VC role
Krishnamurthy highlighted that the role of venture capital, innovation and start-up ecosystem is extremely important for wealth creation and investment in the economy. He also felt that India must aspire to match the top ten countries in the world in terms of innovation potential.
“Role of the private sector in innovation is very important. One statistic that highlights the need to invest far more in innovation is contribution to the gross domestic expenditure on R&D (GERD). In India, that number is about half of the advanced economies,” he said.
Subramanian also emphasised that the private sector must invest more in basic research. “Basic research will eventually find applications in the real world,” he added.