The three acts of entrepreneurship that accelerated India’s start-up ecosystem

 

India’s startup ecosystem is radically breaking from its past in company valuations, unicorn numbers, funding round sizes, foreign interest, and growth. What’s going on? Historians suggest caution with origin stories — every theory just points to an earlier beginning. But we believe three acts of entrepreneurship from five years ago — Jio, UPI, and GST — have converged to accelerate our startup ecosystem. We also make the case that this triad of private, nonprofit, and government courage demonstrates the economic upsides of a better balance between the three sectors.

The Harvard economist Ricardo Hausmann suggests economic development is like a game of scrabble. Goods and services are made by stringing together productive capabilities — inputs, technologies, and tasks — just as words are made by putting letters together. Countries with a greater variety of capabilities can make more diverse and complex goods, just as a scrabble player who has more letters can generate more and longer words. If a country lacks a letter, it cannot make the words that use it. Moreover, the more letters a country has, the greater the number of uses it can find for any additional letter acquired. In Hausmann’s framing, the government provides the vowels and the private sector provides the consonants. The 1955 Avadi resolution poisoned India’s economic scrabble by restricting constants and shrinking the state’s resources to provide vowels. Our triad provides new letters and vowels that enable entrepreneurs to create newer and longer words. Let’s look at each in more detail:

JIO: India’s per GB internet data costs are just 3 per cent of those in the US. A bold and risky $35 billion bet made by a private company transformed Indians from being data deprived to data-rich; consumption has jumped 15 times because costs fell by over 90 per cent. The addition of millions of consumers and smartphones since Jio’s delightful five-year disruption of the market has exploded the most important universal metric in startup valuation — addressable market. Most Indians toil in low productivity and self-exploitation. Affordable digital connectivity is transforming 75 crore of them into consumers, entrepreneurs, employees, and suppliers.

UPI: Google’s letter to the US Federal Reserve suggesting America learn from India’s Universal Payments Interface (UPI) run by the remarkable nonprofit — National Payment Corporation of India — acknowledged that our real-time, low-cost, open-architecture payment plumbing is a public good. UPI’s mobile-first architecture is a key pillar of the paperless, presenceless, and cashless framework of the Aadhaar-seeded India Stack. UPI’s current four billion transactions a month — it will soon reach a billion a day — greatly reduces friction and costs for entrepreneurs and consumers in low-value payments. Remember the inefficiency and low reliability of cash-on-delivery?

GST: India’s economic tragedy began with the second five-year plan in 1956, leading entrepreneurs to conclude that the benefits of formality were lower than the costs. This informality bred corruption; transmission losses between how the law was written, interpreted, practiced, and enforced. More painfully, informality bred low-productivity enterprises with low-paying jobs, whose business model of regulatory arbitrage and tax evasion made formal enterprises uncompetitive. GST attacked complexity and incentivised law-abiding supply and distribution chains. It was long in the making but going live needed the risk-taking of starting with a second-best architecture, accepting some unjustifiable rates, and state revenue guarantees. The doubling of indirect tax registered enterprises since GST creates a virtuous economic cycle of higher total factor productivity for enterprises and employees.

India now has the highest ratio of unlisted to listed companies with a $1 billion valuation, suggests Neelkanth Mishra of Credit Suisse (a unicorn was born every 10 days this year). Initial public offering documents filed by early startups like Nykaa, Paytm, Zomato and PolicyBazaar roughly average a 10x valuation rise since the triad went live. Estimates suggest India’s startup ecosystem valuation will explode from $315 billion today to $1 trillion by 2025. An unintended delightful upside of Rs 2 lakh crore startup fundraising in 2021 is the mass diversion of high-quality young human capital from wage employment to job creation.

Humanity will never resolve the debate whether history is a social science or literature. The social science camp of Karl Marx believes circumstances are paramount and history makes people. But the literature camp of Carlyle believes people make history. As entrepreneurs, we would go crazy if we didn’t believe in the ability of individuals to give the push that history sometimes needs. Of course, the triad’s success needed talented civil servants, central bankers, foreign partners, committees, technology, and managers. But we believe the triad wouldn’t have happened in time for India@75 if Prime Minister Narendra Modi, Mukesh Ambani, and Nandan Nilekani hadn’t provided conviction, persistence, and strategy.

English’s 26 letters — 21 consonants and five vowels — enable creating roughly two lakh dictionary words and 10 lakh usage words. Framing development as scrabble has much to teach the post-1947 economic policy; our 6.3 crore enterprises only translate to 23,000 companies with a paid-up capital of more than Rs 10 crore because consonants were restricted and vowels were misclassified or missing. The wonderful recent ghar wapasi of Air India is just the start of righting the historical wrong of misclassifying many private consonants as government vowels. A government does more when it does less.

In the third decade of the third millennium, one of India’s opportunities is China’s ongoing corrosion of Deng Xiaoping’s economic miracle built on a healthy balance between the state, entrepreneurs, and foreigners. Our mass prosperity after Independence was sabotaged by an imbalance between private, nonprofit, and government players because economic magic needs an engine firing on all three cylinders. The triad reinforces each element to drive inclusion and prosperity by enabling billions of people and millions of enterprises to do billions of sachet size transactions with low or no cost.

Gandhiji’s notion of democracy — where the weakest have the same opportunity as the strongest — needs an economic meritocracy only possible when entrepreneurs have all the consonants and vowels. India’s better scrabble has begun.

Sabharwal and Mantri are co-founder, Teamlease Services and Managing Director, Navam Capital respectively.

Source: Indian Express, 29/10/21

Quote of the Day

 

“Goals determine what you are going to be.”
Julius Erving, Basketball Star

“हमारे लक्ष्य निर्धारित करते हैं कि हम क्या बनने जा रहे हैं।”
जूलियस इरविंग, बास्केटबाल सितारा

IIT Madras to Develop Online Marketplace called e-Source

 IIT Madras is in process of developing an online platform called e-Source that will be used to tackle electronic wastes (e-waste).

Key Facts

• E-Source will be used to tackle e-waste by linking stakeholders of the formal and informal economy.
• e-Source will act as an exchange platform to serve as an online marketplace for Waste Electrical and Electronic Equipment (WEEE).
• It will also act as a formal supply chain between several stakeholders, including buyers and sellers.
• This initiative is being headed by Indo-German Centre for Sustainability (IGCS).
• According to IGCS team, problem of e-waste can be resolved by connecting buyers and sellers of Used and Waste electronic equipment without compromising their interests.

What is the need of e-Source initiative?

To formalize e-waste handling and management, a novel open-source solution is needed which is data enriched and leveraging the potential of transparency because, e-waste either completely stripped down to get precious metals and other high-value materials or are dumped in landfills, without exploring potential re-use. Such unscientific recycling methods e-waste are harmful for waste handlers as well as environment.

Waste generation

As per a study, world generates 53.6 million tonnes of e-waste annually.  This amount is expected to double in next 16 years. Such waste is pressing issues in India as well. India is the world’s third-largest producer. It generated 38 percent more e-waste in between 2019-2020.

What waste generation in India is a concern?

because, in India, only 5 percent of e-waste is recycled responsibly.

Features of e-Source

A unique feature of e-Source initiative is that, it will deploy a detection system which uses a combination of image processing and natural language processing techniques in order to get product information and upload it to the database. Furthermore, it can be self-certified by means of prescribed standard protocols.

Current Affairs-October 21, 2021

 

INDIA

– PM inaugurates Kushinagar International Airport in UP

– PM lays foundation stone of Rajkiya Medical College, Kushinagar (UP)

– Conference on ‘Tourism in Buddhist Circuits – A way forward’ being held in Kushinagar (UP) on Oct 20-21

– Namal Rajapaksa presents trilingual copy of Bhagvad Gita to PM Modi in Kushinagar (UP)

– PM virtually addresses a joint conference of CVC and CBI at Kevadia in Gujarat

– UPSC launches helpline for govt. job aspirants from economically weaker section, backward classes

– India more vulnerable to heat extremes: Lancet report

– Centre extends PMGKP (Pradhan Mantri Garib Kalyan Package) insurance scheme for healthcare workers for 180 days

– Police Commemoration Day being observed on Oct 21

– Punjab: Huge cache of weapons recovered near India-Pakistan border in Tarn Taran

– WHO chief Adhanom Ghebreyesus discusses Covid vaccination and other issues with Indian Health Minister Mansukh Mandaviya

– Israel: EAM S. Jaishankar calls on President Isaac Herzog, PM Naftali Bennett in Jerusalem

– India expresses strong opposition to China’s Belt and Road Initiative, CPEC (China Pakistan Economic Corridor) projects at the UN Global Sustainable Transport Conference in Beijing

ECONOMY & CORPORATE

– Sri Lanka receives first consignment of non-harmful Nano Nitrogen liquid fertiliser from India to boost paddy, maize cultivation

– India is exporting only non-GMO rice to the world: Government

– Bijnor farmer wins U.P. sugarcane competition with a yield of 2,635 quintal per hectare

– India talks tough at CERAWeek, pushes for lowering of crude oil price

WORLD

– Fossil fuel plans evade Paris limits, says UNEP report

– Jailed Russian Opposition leader wins top EU human rights prize

– Jailed Russian Opposition leader Alexei Navalny wins EU’s Sakharov Prize

– IMF Chief Economist Gita Gopinath to leave job and return to Harvard University

– Facebook fined $70 million in Britain for breaching order in Giphy deal

– Russia hosts conference on Afghanistan in Moscow with participation from Taliban, Pakistan, China, Iran, India and former Soviet Central Asian states

– Japan: Mount Aso volcano erupts at country’s main island of Kyushu

Goodbye, Columbus: Vikings crossed the Atlantic 1,000 years ago

 Long before Columbus crossed the Atlantic, eight timber-framed buildings covered in sod stood on a terrace above a peat bog and stream at the northern tip of Canada’s island of Newfoundland, evidence that the Vikings had reached the New World first.

But precisely when the Vikings journeyed to establish the L’Anse aux Meadows settlement had remained unclear – until now.

Scientists on Wednesday said a new type of dating technique using a long-ago solar storm as a reference point revealed that the settlement was occupied in 1021 AD, exactly a millennium ago and 471 years before the first voyage of Columbus. The technique was used on three pieces of wood cut for the settlement, all pointing to the same year.

The Viking voyage represents multiple milestones for humankind. The settlement offers the earliest-known evidence of a transatlantic crossing. It also marks the place where the globe was finally encircled by humans, who thousands of years earlier had trekked into North America over a land bridge that once connected Siberia to Alaska.

“Much kudos should go to these northern Europeans for being the first human society to traverse the Atlantic,” said geoscientist Michael Dee of the University of Groningen in the Netherlands, who led the study published in the journal Nature.

The Vikings, or Norse people, were seafarers with Scandinavian homelands: Norway, Sweden and Denmark. They ventured through Europe, sometimes colonizing and other times trading or raiding. They possessed extraordinary boat-building and navigation skills and established settlements on Iceland and Greenland.

“I think it is fair to describe the trip as both a voyage of discovery and a search for new sources of raw materials,” Dee said. “Many archaeologists believe the principal motivation for them seeking out these new territories was to uncover new sources of timber, in particular. It is generally believed they left from Greenland, where wood suitable for construction is extremely rare.”

Their wooden vessels, called longboats, were propelled by sail and oars. One surviving example, called the Oseberg ship, is roughly 70 feet.

The Viking Age is traditionally defined as 793-1066 AD, presenting a wide range for the timing of the transatlantic crossing. Ordinary radiocarbon dating – determining the age of organic materials by measuring their content of a particular radioactive isotope of carbon – proved too imprecise to date L’Anse aux Meadows, which was discovered in 1960, although there was a general belief it was the 11th century.

The new dating method relies on the fact that solar storms produce a distinctive radiocarbon signal in a tree’s annual growth rings. It was known there was a significant solar storm -a burst of high-energy cosmic rays from the sun – in 992 AD.

In all three pieces of wood examined, from three different trees, 29 growth rings were formed after the one that bore evidence of the solar storm, meaning the wood was cut in 1021, said University of Groningen archaeologist Margot Kuitems, the study’s first author.

It was not local indigenous people who cut the wood because there is evidence of metal blades, which they did not possess, Dee said. The length of the occupation remains unclear, though it may have been a decade or less, and perhaps 100 Norse people were present at any given time, Dee said. Their structures resembled Norse buildings on Greenland and Iceland.

Oral histories called the Icelandic Sagas depict a Viking presence in the Americas. Written down centuries later, they describe a leader named Leif Erikson and a settlement called Vinland, as well as violent and peaceful interactions with the local peoples, including capturing slaves.

The 1021 date roughly corresponds to the saga accounts, Dee said, adding: “Thus it begs the question, how much of the rest of the saga adventures are true?”

Source: Indian Express, 21/10/21

The journey of Mosquirix and future of Malaria

 

Malaria has plagued mankind for tens of thousands of years and the pesky mosquito, which serves as the host or vector for the disease, has killed more human beings than any other creature in existence, facilitating 400,000 deaths annually.

The World Health Organisation’s (WHO) recent decision to endorse a vaccine for malaria, clinically known as the RTS,S vaccine and colloquially called Mosquirix, was a massive milestone in the campaign to eradicate the disease. Malaria has plagued mankind for tens of thousands of years and the pesky mosquito, which serves as the host or vector for the disease, has killed more human beings than any other creature in existence, facilitating 400,000 deaths annually.

Early evidence of malaria exists dating back to 2700 BC with the disease said to have contributed to the decline of the Roman Empire, the weakening of indigenous populations during the colonisation of the Americas, huge losses for British forces during the Revolutionary War, and the death of thousands of American forces in the Indo-Pacific during World War Two. Recognising the deadly toll of malaria, most Western countries successfully eliminated the disease by the 1950s. This was largely done through supply-side interventions that reduced the prevalence of mosquitos in those regions.

However, malaria still devastates large parts of Africa and Asia, with Sub-Saharan countries in particular, accounting for the vast majority of cases and deaths. Mosquirix could provide those regions with a potential, albeit limited, lifeline though challenges prevail in terms of administration, production, and complimentary antimalarial interventions.

Why is Malaria more prevalent in some regions over others?

Dr Prakash Srinivasan, an Assistant Professor at Johns Hopkins School of Public Health and expert on malaria vaccines, tells indianexpress.com that “Western states, with developed economies, have been able to eradicate malaria carrying mosquitos due to improved sanitation and other control measures like insecticides and drugs.” However, just because malaria isn’t currently prevalent in those regions, doesn’t mean that the situation will remain that way. Many strains of malaria have developed immunity to insecticides and, according to Srinivasan, “with global climate change, countries are getting warmer, and it is possible that malaria can re-emerge without proper control measures.”

Unlike in Europe and North America, countries in Asia and Africa have a long way to go before eradicating malaria. According to Srinivasan, there are a number of reasons why malaria has not been eradicated in Africa and Asia, ranging from logistical challenges to the evolution of the disease and socio-economic factors that hinder intervention.

For now, however, the problem is primarily centred around Africa, which accounts for 94 per cent of global malaria cases. This is partially because mosquitos thrive in tropical climates, where the heat and humidity increase the lifespan of the mosquito which gives the disease time to metastasise.

Malaria is primarily transmitted by Anopheles mosquitoes, which develop faster in the temperate waters found in the tropics. Given that the disease likely originated in Africa, Srinivasan also claims that mosquitos evolved in tandem with humans and thus are more resilient in those regions. Srinivas says humans have actually developed a greater resistance to the diseases in Africa. “African adults are probably bitten by several malaria-carrying mosquitos over the course of their lifespan,” he explains. “Most of them develop some sort of antibodies that protect them which is why children under the age of five, who don’t have those antibodies, are particularly vulnerable.”

Countries in Africa also have lower standards of living and poor sanitation conditions. This prevents them from implementing control measures like the use of mosquito nets, pesticides, and rapid treatment. Once the symptoms of malaria appear, it can take under 24 hours for the disease to kill its host and without access to healthcare, people in poor countries are particularly vulnerable. Lack of proper sanitation measures also mean that those countries have inadequate water management techniques, which in turn, provides breeding grounds for the mosquitos.

According to Srinivasan, because malaria is seen as a “tropical disease,” there is little impetus for industries and the governments of developed economies to research a vaccine. “Unlike Covid,” he says, “the malaria vaccine has been in trials for over 25 years.”

However, in terms of net investment, relatively little has been spent on eradication because it poses less of a risk to developed economies. Countries that have achieved at least three consecutive years of zero indigenous cases are declared malaria-free by the WHO. Thus far, only 11 countries have reached that benchmark. However, globally, the elimination net is widening. In 2019, 27 countries reported fewer than 100 indigenous cases of malaria compared to six countries in 2000.

Mosquirix

“The World Health Organization’s recommendation of RTS,S/AS01 for use as a complementary malaria prevention tool is a historic milestone in vaccine development, scientific innovation for malaria and long-term public-private partnerships,” says a representative of the Bill and Melinda Gates Foundation.

However, Srinivasan was quick to clarify that while the WHO has endorsed the vaccine, it has not yet approved it. Produced currently by GlaxoSmithKline, Mosquirix is still a long way away from being found at doctors’ offices or in pharmacies. “What the WHO has done is give a strong recommendation for its wide-spread use,” says Srinivasan, adding that the final approval will still come from regulatory agencies of respective countries.

Although researchers knew that the vaccine was effective in clinical trials for many years, questions remained surrounding its suitability in real world settings. However, since 2019, Mosquirix, has been administered to approximately one million people in Malawi, Kenya, and Ghana, three countries with high rates of malaria. The efficacy of the vaccine in those settings ranges around 30 per cent which is modest compared to vaccines designed to prevent diseases such as polio and Covid, but nonetheless significant.

When asked why this was such a seminal moment given the context of the Covid vaccine being developed so quickly and efficiently, Srinivasan explains: “First, because parasites are far more complex pathogens, malaria in particular codes for around 5000 proteins in its genome so the challenge is what do you target. For Covid in comparison there are only a handful of proteins and only one major protein on the surface. Also, the parasites have multiple forms. There are forms that are found in the red blood cells which cause the disease but there are also forms that are found in the saliva, found during the reproductive phase and so on.”

He explains that the RTS,S vaccine targets the stage of the parasite called sporozoites that are transmitted by the mosquitos. “It does so by generating antibodies to sufficient levels to prevent the sporozoite from entering the liver, the phase known as the silent phase because it doesn’t cause any clinical symptoms. Once it exits the liver, it enters the red-blood cells, causing the disease.”

The complexity of the disease makes Mosquirix ground-breaking. However, combined with the high mortality rate of malaria, the results are even more impressive.

“We should be aiming higher than 30 per cent,” states Srinivasan, but the context is relevant given that there are over 400,000 deaths annually from malaria. Even though the 30 per cent won’t translate directly into a 30 per cent reduction of deaths, it will still save tens of thousands of lives per year according to WHO estimates.

Additionally, according to Srinivasan, “getting the seal of approval goes a long way in allaying fears, especially because the current data which the WHO used as the basis of its recommendation was based on real-life evaluation of this vaccine under real-life conditions. This means that the tests were not administered in doctors’ offices but rather in conditions under which the vaccine would regularly be given, like with measles or polio.”

This in turn demonstrated that wide-spread availability could be accepted by the local populations and that bodes well for the vaccine because it shows that people understand its importance.

Challenges

Distribution will remain complicated however and given that the vaccine requires four doses spread across one year, making sure that people complete the dose will be a challenge. Additionally, there are questions over how the vaccine will be manufactured and according to Srinivasan, “licensing of this technology will be crucial, alongside distribution.”

Moreover, prevention is still more effective than treatment. Srinivasan and other experts argue that Mosquirix alone will have a limited impact unless paired with other anti-malarial strategies. Drugs and vaccines become less effective the more they are used as they give malaria parasites more opportunities to develop resistance.

Since 2000, most progress in malaria control has resulted from expanded access to vector control interventions, particularly, sleeping inside an insecticide-treated net (ITN). ITNs can reduce contact between people and mosquitos and since 2019, an estimated 46 per cent of all people at risk of malaria in Africa were protected by an ITN, compared to 2 per cent in 2000. However, ITN coverage has been limited since 2016.

According to the representative from the Gates Foundation, “while the addition of RTS,S gives countries with high malaria burden another option to consider, accelerating progress against and saving more lives now from malaria requires significantly scaling up a range of current and cost-effective tools, including improved long-lasting insecticide nets (LLINs), seasonal malaria chemoprevention (SMC) and intermittent preventive treatment in pregnancy and infancy (IPTp and IPTi).”

Another prevention tactic is the use of indoor residual spraying (IRS), which involves spraying the inside of housing structures with an insecticide, typically once or twice annually. Globally, IRS protection declined from 5 per cent in 2010 to 2 per cent in 2019, in part, because the disease was generating resistance to the insecticides. According to the WHO’s latest World Malaria Report, 73 countries reported mosquito resistance to at least one of the four commonly used insecticides in the period between 2019-2019. In 28 countries, mosquito resistance was reported to all the main insecticide classes.

Additionally, according to the report, “gaps in access to life-saving tools are undermining global efforts to curb the disease, and the COVID-19 pandemic is expected to set back the fight even further.”

Funding for malaria eradication has also decreased over the years and in 2019, total funding reached $ 3 billion against a target of $ 5.6 billion. Calling it a plateau in progress, the report states that, “in 2019, the global tally of malaria cases was 229 million, an annual estimate that has remained virtually unchanged over the last 4 years.” Progress has slowed in recent years and gaps in funding threaten to roll-back gains made since 2000, a timeframe in which malaria deaths reduced by 44 per cent.

Disruptions in the supply of anti-malarial treatment in Sub-Saharan Africa caused by Covid, could similarly have devastating effects. For example, the report finds that a “10 per cent disruption in access to effective antimalarial treatment in sub-Saharan Africa could lead to 19,000 additional deaths in the region. Disruptions of 25 per cent and 50 per cent in the region could result in an additional 46 000 and 100 000 deaths, respectively.” According to WHO global projections, the 2020 target for reductions in malaria case incidence will be missed by 37 per cent and the mortality reduction target will be missed by 22 per cent.

The Mosquirix vaccine will undoubtedly catalyse the campaign to eradicate malaria, especially amongst vulnerable populations living in Africa. However, in order for it to succeed, three main criteria must be met. First, the vaccine must be licensed to production centres across the globe, similar to how Covishield is produced by the Serum Institute of India, using a formula developed by AstraZeneca. Second, there must be parallel efforts to ramp up measures and healthcare infrastructure that will prioritise prevention and rapid treatment. Lastly, the vaccine should not deter future funding for malaria research and the global community must avoid becoming complacent in the face of this recent progress.

According to the representative from the Gates Foundation, “achieving malaria eradication will require more than the tools we have today. The first-ever malaria vaccine brings us a major step forward in our goal of developing a highly effective, all ages elimination vaccine. Additional investment in transformative tools is critical to saving millions more lives, reducing the burden on health systems and ending the disease for good.”

Written by Mira Patel

Source: Indian Express, 13/10/21

Quote of the Day

 

“Storms make trees take deeper roots.”
Claude McDonald

“तूफ़ानों से पेड़ों की जड़ें और गहरी व मज़बूत होती है।”
क्लॉड मैक्डॉनल्ड