Mark, thank you so much and thank you too to the Minister of course as well. Those conversations are exactly why we do this. This is what this is all about. Please. So please if you would take your seats, we're going to continue those conversations. And as we touched on there, India, the world's fourth largest economy, but by most measures India does remain structurally underweight in a lot of global institutional portfolios. So our next guest has built one of India's most internationally recognized life sciences businesses from the ground up and has managed to navigate that gap. So it is with huge delight that I welcome Kiran Mazumdar Shaw, who's the founder and executive chairperson of Biocon. Please welcome her.
Nice to see you. Delighted to have you here. Can I ask everyone please to take a seat so we can continue our conversation. That would be great. Thank you. We'll just give it one moment while everyone gets sat down. But nice to see you. How are you? You well?
Good. Yes. We have to stop meeting like this.
Ladies and gents, if you would please take your seats and then we can continue our conversations today. And as I said, joining me here Kiran Mazumdar Shaw, who's the founder and executive chairperson of Biocon. And Kiran, really good to have you here. And there was so much we heard there about the theory and some of the applications of this FTC. I want to talk about the practicalities of what you do because I think in so many ways Biocon is a proof of concept of what Indian innovation can do at global scale. And let's maybe start first of all if we look back and if you sort of look at how institutional investors perceive India today versus how it looked when you were building Biocon. What has changed? Give me a sense of quite how much has changed and maybe what is most stark for you in the perception of India?
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.
And I want to talk about how you did that and maybe the ways that it's different. But first of all, let me ask you this, because we talked there about what's changed. What remains maybe frustratingly the same? What are still the challenges?
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.
You talked about scaling up and I suppose the message, and we'll come back to it time and time again in these conversations today, is about how we do this structurally and at scale. Talk to me about that scaling up issue because India is such an amazing market in which to do it, but it is not without the challenges of doing so. So, tell me about your journey and maybe how that would be different today if you were doing it again.
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.
Do you feel a rarity as a success story? Because I think most people would tend to focus on India for consumer growth, IT, tech. What role do maybe things like life sciences, deep technology play? Are they the next chapter that will really unlock growth rather than that maybe tried and tested method which is tech and consumer growth? That actually life sciences could be somewhere that India really stands out.
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.
