Global Innovation & India’s Growth Story | Kiran Mazumdar-Shaw at #IGFLondon

Hello.

Good. Yes. We have to stop meeting like this.

So, I think you heard from Minister Goyal that India was a very resource-strapped country when I started my company in 1978. And mired in what they used to call red tape and very onerous regulations. I think the government today, over the last 12 years, has absolutely focused on ease of doing business, how do you break down regulatory barriers, how do you free up the economy. And of course, capital inflow and access to capital is much easier than it was when I started the company. I also believe that when I started my company, there was no concept of a startup economy. Today, India has a thriving startup economy. And I think what is very exciting today is really the fact that we have a very dynamic ecosystem, especially in tech startups. India has done something very unique. It created the public digital infrastructure. And I almost kind of compare it to the '90s when internet was a public digital infrastructure. And then of course, the intermediaries leveraged that public digital infrastructure to basically build very large, dominant global organizations like Google, Microsoft, Meta and what have you. Today, I think we are at that same inflection point where I believe that India can do a lot with its own public digital infrastructure. And I think UPI has already demonstrated that. UPI today accounts for 54% of digital transactions in the world. And off that, obviously the absolute financial transactions account for half of that. Because the rest are about other transactions to do with taxation, GST, and what have you, and the direct benefits transactions. But having said that, I think even there we are seeing companies like PhonePe account for 45% of that whole financial transaction segment. AI is also now adding to that. And what I'm looking at in terms of the startup economy is what I like to refer to as combinatorial innovation at scale. I think that's what India is very uniquely positioned to do. How do we innovate at scale, at population scale, that really becomes globally impactful? And that, I think, is the opportunity that both UK and India have in terms of collaboration.

I think the challenges are that we haven't really focused on removing regulatory barriers fast enough. I think the government is seized of these frustrations that industry is facing. And I think they've actually set up a reforms body to actually look at taking regulations out of the system. Self-regulation, automatic approvals, notifications, e-regulations are definitely going to make a big difference in enabling us to get there, but we have to do it fast. So, I think that's really, to me, one of the biggest roadblocks we have in moving faster.

Yeah, so I think as an entrepreneur, I've always looked at global scale, and global scale requires huge investment. And I think I've had the luxury of decades of investment to get to that global scale. Companies that get into the business today don't have that luxury of time, and so the access to huge capital is difficult. And then to basically crunch that time to scale is also a challenge. So, I think basically, this is something that all companies grapple with today, especially in the sort of physical world. It's easy to scale in the virtual digital world, but it's tough to scale in the physical world. I think that's where I basically have got it right because I made those investments way back. And today, most of those investments are behind us, and I can now start leveraging the objectives of that scale. So, I think it is very important for global impact to be at global scale. And I think access to capital is extremely important to get there. And I think India today is beginning to see a lot of companies address global scale. So, for instance, the PLI scheme that India introduced has seen 25 billion dollars realized in terms of those capex investments. So, I think there are things happening. Even on the research front, India has basically realized and recognized that we are very under-invested in research and innovation. And again, a lot of the research funds have been created to address some of that. But there has to be a virtuous cycle. And I think the UK also has the same problem. Government is doing its bit of starting you off. But you need to follow it with venture capital. Venture capital is simply not flowing at the scale it should. Because again, I go back, UK has the same problems. The regulatory barriers for pre-revenue companies to list on stock exchange or capital markets is very onerous. And it's sometimes not possible. We need to change that. Why is everyone basically migrating their IP to the US? Because the US has that ecosystem. And we need to emulate it. It's not rocket science. I think both India and the UK, if we only emulate the US model, I think we could retain the IP, we can grow the value of these companies, and basically catch up with what the US is doing. But if we don't do that, and if we keep dragging our feet as to well, it's not going to be possible given our very archaic corporate laws, we are going to miss the boat.

I think biotech is a huge opportunity because computational biology has never been at this scale before. AI has made a huge transformational difference to the way we look at life sciences. And I think the fact that we've got a lot of capabilities in life sciences, both in terms of talent and in terms of academic innovation, gives you that opportunity to actually leverage it.

The message is not clear because I think India has always been looked at as a generics country. And therefore India has always been regarded as a reverse engineering kind of life sciences sector. That's changing and I think what we are seeing today is a lot of startups in the biotech sector are being spawned in India but then taking flight to other markets that offer greater venture capital. So I think that's where I'm coming to where even the UK for instance has some of the greatest engineering universities. Imperial College just got ranked number two in the world. You've got Oxford, Cambridge, Glasgow and many other universities who are doing great innovation. But I think you have the same challenge. How do you go beyond the startup phase and scale it? And really create many unicorns. In fact, India has done quite well. India has already created 150 unicorns because of our public digital infrastructure. Where many entrepreneurs have leveraged that base to create at-scale innovation that finds great deployment. But I think we need to really see what more we can do with AI and everything that goes with it.

We have to do.

So, you'll be very interested to know that if you look at talent availability and talent pool, India is actually exporting a lot of talent to cater to global needs. If you look at AI itself, I think there's a lot of export of AI talent to the world. In life sciences, I'm seeing a lot of that export of talent to Europe, to many other parts of the world. So, I'm seeing that the recognition that India has the talent and the capability is there, but I think the recognition that India has innovative companies that are scaling is not there. And that's what I think we need to really focus on. Having said that, we also are seeing some very interesting dynamics play out in India. India is often compared to emerging economies and I personally believe that's really not the right segment that we belong to. Because our fundamentals are materially different. I mean, if you look at what's happening to India today, even at population scale, we are much larger than emerging economies. But what you're also seeing is that our balance sheets are much healthier. Our investment in infrastructure is exponential. Our banks are stronger. And I think we're investing in new areas. You just heard renewable energy, space tech, digital tech companies. And I think it would be great as the ministers referred to, if we could actually create the next Anthropic from this partnership. Because I think that's what is the opportunity. DeepSeek has shown that you don't need deep pockets to really create LLMs. Why can't we develop these very innovative models?

If you actually look at the numbers, they say a very different story. Everyone's talking about FII sort of moving out of India. It's not true. FII have actually increased their investment in India over the last one year by 14%. I think what has happened is that you've seen a lot of money being taken out of various markets because of the AI frenzy in Silicon Valley. And space tech. SpaceX. I think you're beginning to see that kind of change because you've seen a sellout in recent times of the AI frenzy and the SpaceX kind of over-investment enthusiasm. I'm sure you're going to start seeing a recalibration of investments back into global economies. And India is definitely going to be one of those favored investment destinations. So, I'm not too worried because there's a lot of geopolitics. There's a lot of herd mentalities that we are seeing around the world. But today slowly, I think people are beginning to realize because capital is very tactical. But development is strategic. And India is really investing in development. So, I think you're going to see that shift in perception very soon as India's development agenda is better understood.

I could do it much better. Because of all the technologies that are available to me today. And I think I could have done it faster. I've taken 47 years to build Biocon to where it is today. I could have possibly done it in a much shorter time. But it's a different world we're living in today, and when I look back, I think we've done quite well with all the constraints that we have had over the last four or five decades. I think we've got here to a very good place.

Thanks a lot. Thank you so much.