Amit Paranjape’s Blog

Israel – ‘The Startup Nation’, Lessons for India

Posted in Current Affairs, Information Technology by Amit Paranjape on February 11, 2018

I recently returned from an interesting visit to Israel – the ‘Startup Nation’, as part of a delegation invited by the Israel government. The goal of the visit was to learn more about the Israeli startup and innovation ecosystem, and improve startups level contact between India and Israel. It is quite impressive to note the progress Israel has achieved since its creation in 1948. Its growth and innovation in a variety of sectors: agriculture, water management, defense, cyber security, information technology, semiconductors and others, provide great learning examples. During this short trip, we were able to visit startups, co-working spaces, maker-spaces, venture capitalists, incubators, universities, and supporting agencies. We also attended a couple of industry conferences (Cybertech 2018, Tel Aviv and 2018 OurCrowd Global Investor Summit, Jerusalem).

In the packed agenda, we didn’t get to see a lot of this country’s tourist attractions – but the brief tours of Haifa, Old City of Jaffa, and the historic city of Jerusalem were very interesting (I will write about this in a separate article). Suffice to say, Israel can be a great travel destination for the Indian tourist. This small country has a lot to offer: great history & culture, diverse nature, nightlife, good food, and a chance to meet with great people.

Israel is a small country, with an area of around 20,000 sq km (just a bit bigger than Pune District), and a population of 8.5 million (less than half of Mumbai). Faced with multiple geopolitical, climate and geographical challenges, it has made tremendous progress in building a world class innovation and startup ecosystem, over the past few decades. Today, Israel has over 7,000 startups, over 350 VC Funds, and over 300 corporate R&D centers. There were over 100 startup exits, worth $23 billion in 2017. This was a big jump from $10 billion in 2016 – largely driven by the huge acquisition of Mobileye (Computer Vision, Machine Learning Tech – for self-driving cars, other applications) by Intel for $15 billion, in August 2017.  The Mobileye exit is a great case-study and success-story for Israeli startups. Historically, U.S. has been the biggest market for Israeli tech startups and companies. Today, Israel has the 3rd largest number of NASDAQ listed companies (following U.S. and China).

What drives this startup and innovation miracle? In this article, I will attempt to highlight some key attributes and reasons. I will also summarize some lessons that could be learned and applied to the Indian ecosystem. For detailed reading on Israel’s startup ecosystem, I would recommend an excellent book: ‘Startup Nation’ by Dan Senor and Saul Singer (a bit old; published in 2011 – but still quite relevant).

There are three primary factors that have helped in laying the foundation of the Israeli startup and innovation ecosystem:

  1. Culture & Education (Scarcity of Natural Resources, Tough Environment, Military Service, Networking)
  2. Role of Government (Support for Universities, Incubators, Strategic Focus on R&D)
  3. VCs, Multi-National Corporations, and the Corporate Ecosystem



Israel has faced a tough environment (nature and geopolitics) since it was created in 1948. A large part of the country is desert, with very limited water resources. Israel has fought multiple wars with its neighbours over the past 70 years, and national security is a top priority. These necessities have driven the need to innovate in agriculture, water management and defense sectors, and has driven a culture of ‘problem solving’, with constrained resources. The culture promotes ‘Okay to Fail’ and a ‘Challenge Everything’ attitude.

Military service is mandatory in Israel after age 18. Students enter a three-year program and are trained in a variety of different skills. Depending on their capabilities and openings, they are assigned specific departments and roles. They learn military and other hard-skills in various tech and non-tech areas. They learn important soft-skills such as leadership, discipline and team-work. They also learn about tough decision making, especially in uncertain situations. They build great networks, which often last them a life-time, and are very useful during their startup/corporate life.

Israel is a small country, and is highly networked. A popular saying, we heard multiple times during our visit – “Everyone is connected to everyone else with a maximum ‘one degree of separation’”. These networks are critical in entrepreneurship to help recruit the right people, get the right early customers, raise funding, etc.

One example of the military service training and its direct connection to successful entrepreneurship and startups is the ‘8200 Unit’. We heard about this in multiple presentations during our visit. The ‘8200 Unit’ is one of Israel’s top military intelligence unit, involved with a variety of cyber-security, cyber warfare related initiatives. This unit usually ends up recruiting the top engineering and mathematics students during the military service. These recruits are trained by the top experts and work on challenging projects. The alumni of this unit later on end up studying at the top universities, working with the corporates and starting key startups (especially in the cyber-security, data analytics and related areas).


For a country of just around 8 million people – Israel has 8 top ranked global universities and over 50 colleges. It has 12 Nobel Laureates. The country is among the top in the world in R&D spending (combined government and corporate) as a percentage of GDP at 4.3%. (For comparison – India spends less than 0.8%).

Israel is also benefitting from ‘brain gain’. Top Israeli PhD students who have studied in U.S. and other top global universities are moving back to their country, after gaining top academic research and corporate R&D experience.

On a related note, it is worthwhile to mention that Israel has started attracting a good number of Indian students in higher education (Now at about 1,000 – still significantly smaller than the number that goes to U.S…but rising).

The Israeli education system encourages a culture of risk taking and asking questions, right from the early years.

Government support for startups and innovation

The Israeli Government also plays an important role in the startup and innovation ecosystem, both directly and indirectly.

Directly, it supports many entrepreneurship programs, funds, and incubators (total of 19). The incubators provide the risk capital, facilities and mentoring. Many incubators are connected with the universities. This helps the university students with their startup ideas, and also enables access to professors and other experts for mentoring.

As mentioned earlier the government also plays an important role in funding the universities as well for various research projects.

Another indirect way in which government supports the startups is through funding strategic R&D projects in agri-tech, water management and defense. As discussed earlier, these are key priority areas, and availability of funds and pilot projects (government is the customer) also helps startups.

In 1993, the government helped start the Israeli VC industry, by backing the Yozma Fund. Tax reforms for the corporate sector have brought corporate tax down to 10%. In addition, the Israel Innovation Authority provides direct R&D funding for projects.

Role of corporate sector

Many large and medium sized tech multi-nationals have a strong presence in Israel. Over 320 R&D and Tech centers of multi-national companies are located here. These include Intel, IBM, Microsoft, Cisco, TI, Samsung, Oracle, SAP … (just to name a few). Around half of Israel’s tech workforce is employed by these multi-nationals. Many of them are based in Israel’s high-tech hub, Haifa. In fact, Haifa reminds you of Silicon Valley for multiple reasons. The city is located by the sea and has Israel’s most important harbour. Major part of the city is located on the hills next to the sea. Haifa is home to many tech companies and also one of Israel’s top engineering universities, Technion. The sea, the drive through the hills, the tech company campuses in close proximity, the university all remind you of the San Francisco Bay Area.

A good example is Intel (which has been here for over 30 years). They are doing world class high-end R&D here, comparable with the best in the world (e.g. Silicon Valley). The earlier mentioned book ‘Startup Nation’ has a great case-study on Intel Israel’s work on the power saving chips.

These large multi-national companies have invested in Israel due to two main reasons: 1. Availability of top science & engineering talent (from universities and startups). 2. ‘Brain Gain’ phenomenon.

People who have worked in these companies have excellent global exposure to not only the latest technology, but also to markets. Many hi-tech startups in Israel are founded by the alumni of these multi-national companies. Some of these startups also get good exits, with these multi-nationals buy them out. Following the exit, the entrepreneurs move onto newer startups, and also become VCs – thereby further continuing the cycle of further development.

Lessons for India

There are many lessons applicable to India, which can be learned from Israel’s startup and innovation ecosystem. Some of these lessons maybe more relevant than the ones from Silicon Valley. These lessons can be categorized across culture, education, role of government, and role of corporates.

But before we get into those, it is important to note that there is a widespread myth that most entrepreneurs and successful startup founders are fresh undergrads or college drop-outs. Bill Gates and Mark Zuckerberg are big exceptions, not the rule.

Experience is a key factor for successful high value IP (Intellectual Property) driven startups. The average age of startup founders in the Silicon Valley and Israel is closer to 40. A typical startup founder is someone who has completed higher education (MS/PhD) and worked further in research/development for some years. This experience is not only useful for gaining deeper domain knowledge, but to also gain a good network of potential co-founders, employees, pilot customers, partners and investors.

While it is important to teach entrepreneurship to undergraduate students and giving them opportunities to build on their ideas – it is unrealistic to expect many breakthrough startups to come out of undergraduate colleges.

Culture & Education

Culture is difficult to emulate. It’s a more fundamental thing. Yet there are some aspects of the culture that are common across the two India and Israel (e.g. ability to do more with less, with constrained resources). These abilities in India need to be encouraged and rewarded. Of course, there is a right way of doing things and doing a total ‘Jugaad’. Need a right balance.

Indian education system discourages asking questions and challenging the authority – quite opposite of the Israeli system. Changing this is a huge task.

At the higher education level, a significant shift is required. India’s investment in R&D is very low across the board, and this also reflects in our funding of our higher education and research institutes. This needs to change. Of course, the efficiency and utilization of these funds also needs significant improvement.

We need to focus on improving our Masters and PhD level programs. We need quality, not quantity. We need to focus on relevant, market-ready IP creation. Today, our institutions like the IITs produce some of the best undergraduates in the world. However, the same cannot be said about our Masters and PhD students. Some of our best undergrads end up doing MS/PhDs outside India (mostly in U.S. and in Europe, Japan, and other countries). This is a key issue and needs immediate attention (will need a separate article to discuss this in detail). The Indian government is taking some steps in this direction (like the recently announced PhD scholarships), but a lot more needs to be done. We need to track and improve the number of IIT, IISER, IISc B.Tech/MS graduates, who do PhDs in India.

Since we don’t produce many world class PhDs, the multi-national R&D centers don’t recruit them here. This is one reason good students are not doing PhDs in India, since there are very few good corporate R&D job opportunities. This is partially a chicken and egg problem. The cycle can be broken by upgrading our research facilities and PhD programs and improving the supply.

In some aspects IITs and the new IISERs are comparable with the best in the world. But they need a long way to go, before we could count some of these in the top-50 global universities. The quality vs. quantity argument is valid here too. Yes, we need more institutes; but we also need sustained focus (and resources/funding) to get at least 1-2 of the old IITs to world class level.

To further improve the quality of PhD programs in India, we need more university to university collaborations. These need to move forward with concrete programs at the department levels – and not just stay at signing ‘MoUs’.

Role of Government

As discussed earlier, the government has to play a key role in improving higher education (Masters and PhD programs). In conjunction, it is also critical to improve our basic research & development capabilities. We need large investments and great execution (like ISRO). As mentioned earlier, our R&D spend as a percentage of GDP is way low at 0.8% (compared to 4.3% for Israel, and 2.5% for China).

Government also needs to fund creation of Incubators that provide funding, support and mentoring for deserving startups. Here again, quality is more important than quantity. As mentioned earlier, Israel has less than 20 incubators. We need more startups with good solid IP; not yet another ‘me-to’ incremental e-business innovation, that too copied from a U.S. startup idea. We need more startups in cyber-security, agri-tech, energy, AI, healthcare, biotech, advanced manufacturing, materials, etc. and less in e-commerce.

A good example of successful (yet low profile) incubator in India, which supports startups with high value IP, in the areas of biotech, materials, energy, is the Innovation Center at National Chemical Laboratory in Pune. We need more startups founded by PhDs and senior R&D professionals, who have created some new, non-trivial IP.

Third and important long term area for government support is exploring the ‘DARPA’ (Defense Advanced Research Projects Agency) model from U.S. Israel follows a similar model.

DARPA is a U.S. government agency that funds strategic projects in the area of defense and national security. A good portion of this funding is received by the private sector. DARPA provides strong program management and oversight (by its own program managers) on these projects, executed by the private sector. This ensures good execution and efficient usage of the R&D dollars. The Program Managers from DARPA are industry veterans and are experts in specific domain areas.

In U.S. and Israel, the offshoots of defense related spending on strategic projects (through DARPA and other agencies) has resulted in many dual use products and technologies. These technologies are later commercialized or built upon by established companies and even startups. In many respects such agencies provide a basic R&D foundation (much like state supported universities), and help the overall innovation and startup ecosystem.

In India, the DRDO model is mostly all government (public sector). We need to understand, evaluate (and adapt as required) the DARPA model for India as well (Note – a detailed discussion around DARPA and other similar approaches will need a separate article.)

Role of Corporates

Indian private sector companies in tech and other sectors also need a strategic product/IP vision. Today, along with the government, the private sector too contributes to a significantly lower R&D spend, compared to their international peers.

In the IT space, India has been largely focused on the Software Services. Some of these large companies are sitting on large cash piles. The IT Services market is ripe for disruption with cloud, automation and other structural shifts. Now is the time for these IT Services companies to start investing more in product R&D and IP creation. They can also allocate more funds for their venture capital arms, which can in turn drive funding of IP driven product startups.

Closing Comments

We need to progress in multiple areas simultaneously, if we want to build a good, high-value IP driven startup ecosystem. Israel provides some good learning examples. We needs to move to a ‘product’ and ‘solution’ mind-set. ‘Make in India’ should not just be about manufacturing, but also about IP creation, core R&D and import substitution in strategic areas. We need to improve startup to startup and university to university level contacts and close collaborations with Israel, U.S. and other countries. The Indo-Israel Joint Innovation Fund announced last year during PM Modi’s visit is a good start. The Indian market is important for Israeli startups, and joint IP development should be explored. Lastly, we need better alignment between defense driven R&D and funding with our universities, corporate R&D and startups.

(This article is also being republished on Swarajya )


We need more ISROs, and more government led strategic R&D investments

Posted in Current Affairs, Science & Technology by Amit Paranjape on September 26, 2016

Dr. K. Radhakrishnan, the former Chairman of ISRO, spoke at the 5th Foundation Day of Pune International Center in Pune this Saturday. It was an excellent lecture, covering many details around ISRO’s great progress and achievements, and future plans. ISRO has made tremendous strides over the past four decades in R&D led innovation and has succeeded in developing key technologies such as the cryogenic propulsion system. One thing that stood out in my mind during the lecture was the extent of private industry participation in R&D and manufacturing, and the manufacturing ecosystem.


PSLV (image credit: ISRO)

Dr. Radhakrishnan mentioned that 80% of the value addition of ISRO’s workhorse launcher, the ‘Polar Satellite Launch Vehicle’ (PSLV) comes from private industry. (Note – the PSLV is one of the most reliable space launch platforms in the world, with 34 successful launches in a row – at one of the lowest launch cost per payload weight).

These private industry contributions for building the PSLV come from over 120 large, medium and small companies. ISRO acts as the designer and system integrator, and assembles the final rocket at Satish Dhawan Space Center, Sriharikota. I had known about the industry participation, but the 80% number was indeed surprising. It was great to note the private sector’s role in India’s space program. ISRO is thus not only delivering great rockets and satellites technology, but also helping build an aerospace R&D and manufacturing ecosystem in India. This is critical. Over the past 50 years, NASA has played a key role in driving the development of a similar ecosystem in U.S. The advances made in space tech around materials, propulsion, guidance, navigation and other areas have many direct and indirect technology benefits in other sectors. ISRO should follow a similar example.

For the ‘Make in India’ initiative to succeed, we need high quality R&D investments in the public and private sector. R&D investments as a percent of GDP is an important metric and has a good correlation with the overall strength of the economy. South Korea (highest R&D/GDP in the world) is a great example. It invests 4.3% of its GDP in R&D. U.S. invests 2.7% (highest in absolute terms, given their GDP). China invests 2.1%. India invests only 0.85%.

Government led R&D is an important component of the total R&D spending in a country. Let’s look at the U.S. example. Here is a recent tweet by Bill Gates.


The tweet references a link from U.S. Department of Energy (, where Bill Gates is drawing attention to this:

“Research and development (R&D) is the unsung hero of American innovation. Government-funded R&D spurs new industries, creates jobs and helps us tackle our greatest challenges. Decades ago, that challenge was the space race; today, it is climate change.”

While we regularly talk about the R&D in private sector U.S. companies such as Google, Apple, etc., what is often ignored is the huge investments made by the U.S. government in this area. NASA and U.S. Department of Defense are excellent examples. Another one is the agency that funds important research in U.S. Universities – NSF (National Science Foundation). Many of today’s great technologies and innovations were built on this R&D Foundation laid by the U.S. government R&D investments. Perhaps the best example of such an innovation is the ‘internet’. Just like U.S., France too has made many strategic R&D investments in areas related to aerospace & defense, energy and computing technologies.

Often government led R&D is also driven by a country’s strategic interests. This is very much applicable to India as well. This is one more important driver for government led R&D investments (and a topic of a separate article).

As discussed earlier, private R&D and manufacturing can build on top of the government led R&D initiatives. Yes, there are examples of wasteful expenditures, especially in the public sector. For one successful ISRO, there are counter examples as well. However, this should not deter the policy makers from allocating more R&D investments in strategic areas. It is important to study what has worked at ISRO, and then to institutionalize these processes in other R&D organizations. (This was one process related question, I wanted to ask Dr. Radhakrishnan yesterday, but we were short on time at the lecture).

ISRO represents one of the best examples (not just in India, but in the world) of effective and efficient R&D. The Mars Orbiter Mission ‘Mangalyaan’ is a great example. ISRO was able to deliver this incredible project for a fraction of the cost (around 10%) of what NASA spent on a similar project.

India’s goal should be create more ISRO like organizations in other areas – R&D driven organizations that develop important strategic and commercial products – and also help build a private R&D and manufacturing ecosystems around them. As a product/technology matures, the role of the private sector can grow. Where possible (in terms of tech capabilities), the private sector can also play an upfront role in collaborating on new technology development.


A Visit To GE India’s John F. Welch Technology Center – Watching Innovation In Action

Posted in Current Affairs, Science & Technology by Amit Paranjape on September 6, 2015

I visited the John F. Welch Technology Center of GE in Bangalore this weekend. They were celebrating the center’s 15th anniversary with a ‘Tech Mela’. Solutions from the various business units at GE were showcased. I have admired GE as a company, and their previous legendary chairman Jack Welch (I would highly recommend reading Jack Welch’s books about his management philosophy). This visit was a good opportunity for me the get a better understanding of their work.

The center (also referred to as GE ITC: GE India Technology Center) has over 5,000 R&D professionals working across healthcare, aircraft engines, transportation, energy and other GE verticals. This is the largest multi-disciplinary R&D center of GE in the world and more than 50% of the employees here have Masters or PhD degrees.  The GE ITC is involved in supporting GE globally, as well as focusing on local/regional solutions for India and the emerging market.

Good discussion with Munesh Makhija (Head of GE, ITC)

Good discussion with Munesh Makhija (Head of GE, ITC)

I got a chance to interact with the head of GE ITC, Munesh Makhija (Managing Director, GE India Technology Centre Chief Technology Officer, GE South Asia). Here is a video of our interesting discussion ( It was good to hear about the overall focus and vision for the center, as well as their day to day activities and challenges. Hiring top talent is a challenge for every company and GE ITC is no different. Today, many top engineers want to work in software (and in startups), and this is a big hiring challenge. Along with their presence in Bangalore and Hyderabad, GE ITC is also trying to tap into the advanced manufacturing talent in Pune where they have a brand new state-of-the-art multi-modal manufacturing plant (inaugurated earlier this year). I suggested to Munesh that GE should seriously consider expanding their R&D activities in Pune. Pune is the biggest center for manufacturing in India and hosts many advanced manufacturing capabilities across large and SME companies, including a large talent pool.

Healthcare is one of the biggest groups at the GE ITC and is involved in developing solutions across imaging, maternal health, critical care, surgery and other areas. Solutions for the global market, as well as India/Emerging Market are developed here. We got an overview of these solutions from Shyam Rajan, CTO, GE Healthcare India.

A new latest PET/MRI scanner was on display (IMAGE). This scanner can simultaneously carry out the PET and MRI scans of a patient. A low-cost, award winning CT scanner was also showcased, specifically targeted for the developing markets, where cost and space are big issues.

PET/MRI scanner

PET/MRI scanner

Portable (Tablet) Ultrasound

Portable (Tablet) Ultrasound

Evolution of the Jet Engine

Evolution of the Jet Engine

GE Jet Engines

GE Jet Engines

Some of the other technology areas on display included:

Transportation – Diesel Locomotives, Fleet Management, Marine Engines

Energy – Oil & Gas, Wind Power

Gas Turbine Power Generation, Electricity Distribution, Smart Grids

Aircraft Engines
It is very interesting to note the diverse engineering and technology areas that GE is involved in. They are addressing the core problems in energy, transportation and healthcare. It was good visiting these various solution areas and learning more about the solutions and tech challenges involved. The kinds of problems being addressed include machine design, modeling & simulation, advanced materials, hi-tech manufacturing, data analytics, big-data, software programming, signal/image processing, structural design, electronics control systems, and many more.

I would have liked to see more of the aircraft engine technology on display. Unfortunately (I guess due to IP/competitive restrictions) couldn’t see a lot in this area.
I also got a chance to interact with Sukla Chandra General Manager, GE Global Research, Bangalore Director-Legal, Patents & Analytics Centre of Excellence. Patents are a big focus area for GE, and Sukla’s team is responsible for providing strategic IP support to GE Global Research and several other GE businesses. In addition the patents center, Sukla also co-leads the GE Women’s Network Initiatives for India.  The patents legacy of GE goes all the way back to the founder, Thomas Edison (who is credited with more than 1000 patents).

Top GE Inventors - includes Thomas Edison (1000+ patents

Top GE Inventors – includes Thomas Edison (1000+ patents

As part of the Tech Mela Event, GE released an info-graphic on their work in India (good summary):

Germany pays twice, and builds twice as many cars as U.S. – An interesting tale of two systems

Posted in Cars, Current Affairs by Amit Paranjape on December 23, 2011

I have always wondered about the divergence in the direction and fate of the U.S. and German car industry over the past few decades, and especially in the past decade.  The U.S. industry is still in a big crisis, though showing some signs of slowly coming out – while the German industry seems to be doing reasonably well – inspite of the global slowdown. What factors contribute to this difference? It is better labor productivity, better products, innovation, or something else. I came across a great article that tries to explain this quite well:

Can Pune Emulate The Silicon Valley Technology Startup Ecosystem?

Posted in Information Technology, Pune, Science & Technology by Amit Paranjape on February 11, 2009

I have always wondered about the parallels between Silicon Valley and Pune. Some might call this farfetched, but there are some really interesting and some coincidental similarities. Pune (as does any other Indian City) has a long way to go to even get closer, but that should not stop us from brainstorming on leveraging these similarities as building blocks, and strive towards emulating the leader. Silicon Valley is unique. Maybe one day, we can indeed see a vibrant Pune Technology Startup Ecosystem, thriving and prospering – on the lines of the Great Technology Entrepreneurship Capital of the World!


I started this self-brainstorming exercise by simply listing those Pune characteristics that parallel Silicon Valley (The degrees of similarities might vary …):


·        Good quality of life (Compared to other Indian Metros).

·        Temperate Weather.

·        Technology Entrepreneurship Culture.

·        Fledgling Startup Ecosystem.

·        Education Hub:

o       Many Good Colleges

o       Leading Research Institutes

·        Magnet for people from all over India/World:

o       Pune has the highest number of foreign students (amongst Indian cities)

o       Large number of foreign expats, and visiting researchers

o       Recently, Pune has also benefited from the ‘Reverse Brain Drain’: Many highly qualified professionals and successful entrepreneurs (of Indian origin) from the US/Silicon Valley have moved back to Pune.

·        Proximity to a Financial Capital.

·        Large IT talent pool (Thanks to the many IT Outsourcing Companies).

·        Leading ‘Green’ Technology Hub in India. (Headquarters of companies like Praj and Suzlon).

·        Hub of Hi-tech manufacturing (Note: San Francisco Bay Area has quite a few high-end manufacturing companies as well).


And some coincidental ones …


·        Leading Wine Producing Region in India.

·        Developing into a key hub for specialty fruits, vegetables and Flori-culture.

·        Open (and tolerant) culture.


Some of the obvious things that are lacking in Pune include – Infrastructure and Sustainable Development. The other ones include greater focus on pure research, and venture funding. [I will discuss these and more in further detail in following articles in this series.]


As I was continuing with this brainstorming and gap-analysis, I stumbled upon a great article written by the well-known Silicon Valley Venture Capitalist and Essayist, Paul Graham on ‘How To Be Silicon Valley’, in May 2006. He describes the key characteristics of the San Francisco Bay Area that led to the development of this amazing ecosystem over the past few decades. He also explores how similar Ecosystem Development could happen in other cities/towns anywhere in the world.


In my article, I make an attempt to use the key characteristics identified by Paul Graham, and try to map them to Pune. I believe that Pune is amongst the best places in India where a Silicon Valley like Ecosystem can take shape. Obviously, there are many challenges. I am not going to use sobriquets such as ‘Pune – The Silicon Valley of India’. Silicon Valley is unique – there can be only one.


I am also not doing a comparison (either/or) between different Indian cities here. Many writers routinely refer to Bangalore as the Silicon Valley of India. While to me, Bangalore is definitely not there at this point, it might very well be on the right track. To me, if places like Bangalore, Pune and others introspect and strive for the key characteristics that are described by Paul Graham, then all of them have a shot (tough, it might be!) at creating Silicon Valley like Ecosystems someday.


Note – I recommend that you do read Paul Graham’s article: “How To Be Silicon Valley”, before reading further. This will enable you to better relate to my observations below.


I am going to follow a format, similar to that used by Paul Graham. Listed below are the key characteristics and how Pune fares with respect to these.


Presence of Rich People who are not Bureaucrats


Paul Graham argues that a technology ecosystem needs rich people who can take risks, and invest the necessary seed capital. These investors shouldn’t be purely financial investors who don’t understand the domain that they are investing in. Nor should they be bureaucrats who simply evaluate short and medium term financial returns and are risk averse.


Paul Graham describes the example of how the money made on the risks taken in the 1980s (e.g. Sun Microsystems) was then re-invested again in the 1990s (e.g. Google, Amazon) and now being re-invested again. Essentially, startups create startups – this how this ecosystem starts and grows.


Does Pune have rich people, who are technocrats? The answer is yes. Maybe nowhere enough, but the successful technology entrepreneurs of the 1980s and 1990s have built up some good reserves and have started looking for interesting technology ideas to fund.


Not Just Buildings


Large buildings and nice campuses don’t make the Silicon Valley! The massive new IT Parks we see today in many Indian cities, don’t equate to Silicon Valley. We need the DNA of a startup that was founded here and grew.


Unfortunately, Pune doesn’t have many IT firms that became very big (like Infosys – though one could argue that Infosys in fact started in Pune, and moved on…). However, there are a few good examples of non-IT technology companies (Manufacturing, Industrial Automation, Green Energy, etc.) that made it big.


Universities & Research Institutions


Pune has a strong education culture and some excellent engineering and science & technology colleges, including the 2nd oldest engineering college in India. A new Indian Institute of Science Campus is also being planned. Distance wise one can argue that IIT Bombay is less than 3 hours (150 km) from Pune.


In addition to the universities, Pune has many leading research institutions in a variety of technology areas – National Chemical Laboratory, Institute of Virology, Indian Meteorological Office, Inter-University Center for Astronomy & Astro-Physics, Agricultural Research Institute, Various Defense Research Organizations, etc.




Paul Graham talks about a city/town having a ‘personality’. He further states that you don’t build such a personality – you let it grow. I believe that Pune has grown a strong personality over the past many decades. In fact, this is one of the attributes that Pune is quite famous for. A ‘Punekar’ (resident of Pune) can be identified by many interesting traits!


Pune has a personality of a small city/town; a personality of knowledge & learning; a personality of creativity (not just in technology, but in other areas such as arts and music); a personality of a distinctive life-style; a personality of tolerance & openness to new ideas. Historically, it has embraced and assimilated people from different parts of India (and the world).


And while the new Pune is morphing into a cookie-cutter solution of suburban development seen in other metros, the old – new Pune combination still maintains a distinct identity.




According to Paul Graham, ‘Nerds’ constitute one of the most critical building blocks of such an ecosystem. You can call them anything – But Pune is increasingly a preferred destination for many techies (or nerds, or whatever you want to call them!). Historically, Pune has always been a center of attraction for the learned – not only in technology areas, but in other areas such as History, Sociology, Arts, Music and Languages.


Many of these people find Mumbai and other Metros to be too big, too fast, and too glamorous. Pune is compact, liberal and relatively quiet in comparison to most Indian cities. These nerds don’t mind paying a lot more to live in such a place with it’s unique identity (see earlier section). Quality of life is important for them.  Note – Pune real estate is quite expensive, and the overall cost of living is amongst the highest in India.




Given Pune’s strong education ecosystem, Pune is a ‘young’ city. It is vibrant with fresh energy and drive. Culturally, it is less conservative/more liberal – whichever way you want to look at it. There are also quite a few people here who are ‘young at heart’.




Even after having all the right mix of the above key characteristics, you need to provide ‘Time’ for a Silicon Valley to be built. While Pune has many of the desirable ingredients, it still needs more time. And it is critical that these characteristics don’t degrade/disintegrate over that time period. I will discuss this further in future articles in this series.


Competing with the ‘Original Silicon Valley’


Paul Graham’s last point relates to competing with the ‘original Silicon Valley’. Any new challenger will definitely face competition from the original one!


I do think that there is room for more challengers. Speaking about Pune/India, we have an advantage of having more generalists (engineers who are more application oriented that theory oriented; and can quickly span interdisciplinary boundaries). The costs in India have risen significantly this decade, but still remain low compared to the west. Thus, if planned and used correctly, the same capital can stretch longer here. Pune and India have a large and growing young population. Many innovative ideas are driven by young people – both as innovators, as well as consumers. It is here where India in general and Pune in particular has a strong credential.


In future articles in this series, I will explore specific steps that I think Pune needs to take towards its goal of emulating a Silicon Valley like technology ecosystem.


Please provide your feedback, other ideas and comments on this article. I will try to incorporate these in the future articles in this series.


This is a very important topic for all people interested in and/or working in the technology area in Pune!


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