Dr Suchita Markan, Asst GM, BCIL and Dr Yogmaya Verma, Technology Management Professional, in this article talk about how funding opportunities made available to healthcare enterprises promotes innovation-based technological inventions leading to development of new products, processes, infrastructure development, capacity building leading to economic growth and sustainability
It is true that nothing is more powerful than an Idea whose time has come. But it is equally true that in today’s technology- driven world, the idea needs, inter alia, a lot of funds, so that it takes the shape of a socially useful innovative product.
Innovation is a key driver of sustainable and equitable economic growth for any country. When it comes to healthcare sector, adequate funds are indispensible for progressing on the path of innovation. Funding opportunities made available to healthcare enterprises promotes innovation-based technological inventions leading to development of new products, processes, infrastructure development, capacity building leading to economic growth and sustainability. Today, India offers plethora of funding opportunities from government and private players for all the stages of technology development and commercialisation. Whether it is a scientist conceptualising an invention with commercial potential or an industry developing a drug or vaccine which needs validation and scale-up, India offers ample funding opportunities to help them accelerate their inventions to the next level. The funding can be availed by students, researchers, entrepreneurs, start-ups and established companies alike.
To bridge the gap between academia and industry and to promote translational research, funding platforms are also being provided in public-private partnerships. By virtue of such partnerships, academia brings in rich experience and expertise of basic research and industry brings in its relevant expertise of technology validation, scale-up and marketing thus leading to accelerated technology development and commercialisation. This has led to development of numerous commercially viable technologies with societal relevance. International funding agencies such as Bill and Melinda Gates Foundation, Wellcome Trust, WHO, CEFIPRA, Indo-US Science and Technology Forum have also joined hands with the Indian government to fund high risk, globally relevant translational research in India.
Government of India is working actively to create an enabling environment for healthcare enterprises and to attract foreign investments including simplifying regulations, infrastructure development and providing a stable and more predictable environment to enable industry to build sustainable and profitable manufacturing ventures. This is encouraging private investors and venture capitalists to fund innovation-driven healthcare ventures.
Multinational organisations are in the league of Indian start-up supporters. SoftBank, a Japanese bank has invested $2 billion into Indian startups. The Japanese firm had pledged the total investments at $10 billion. Google has also declared to launch a startup, based on the highest votes in which the top three startups will be allowed to join the next Google Launchpad Week, and the final winner could win an amount of $100,000 in Google cloud credits.
At this unique juncture of a very favourable pro-innovation environment, various funding initiatives by the government, international bodies and private entities can be utilised by academia and industry alike at various stages of technology development and commercialisation including ideation stage, validating proof-of-concept, technology validation, scale-up and commercialisation. In today’s global economy, as intellectual property (IP) is the key asset which provides exclusive commercialisation rights to the innovators/ innovating enterprise, the funding opportunities which support IP protection and maintenance are also available. Utilisation of these funding opportunities will enable the current and future entrepreneurs and healthcare enterprises to grow, sustain and derive benefits as well as contribute to the economic development of the country.
Funding schemes for supporting innovative ideation and early stage R&D
There are multitude of early stage seed grants offered by the Government of India for fostering innovative ideas by individuals, start-ups and small enterprises. These are aimed at promoting entrepreneurship in the young innovators who have an exciting idea but need funding support to validate their idea till proof-of concept stage. One of such scheme which is successfully being implemented by BIRAC, a Government of India enterprise is Biotech Ignition Grant (BIG). BIG offers itself as a unique grant-in-aid opportunity being provided by the government wherein an individual scientist or entrepreneur with no formal engagement with a company can also avail this funding and validate ones innovation. More than 100 projects have been supported through BIG scheme. Another such scheme is BIRAC-SRISHTI Gandhian technology Innovation for supporting grass-root innovations budding at institutional level. About 100 nascent ideas across the country are supported annually through this funding scheme. Table 1 summarises the key funding opportunities supporting innovative early stage technologies.
Funding opportunities for technology advancement, validation, scale-up and commercialisation
Several funding schemes are focussed on funding advanced stage technologies. These schemes are aimed at fostering innovations which have proof-of-concept but need further development, validation and regulatory approvals before these are ready for entering the market. SBIRI and BIPP are such schemes which extend funding support to high risk innovative research by industry and is provided to grantees in a public-private partnership (PPP) mode. Support is extended in the form of grant-in-aid, equity or soft loans, which varies with the type of funding scheme. Funding support by such schemes accelerates technology development and its validation. Contract research Scheme (CRS) of BIRAC is also a PPP scheme for facilitating technology validation and translation by academia through industry partner. Table-2a and 2b summarise funding schemes by various government departments and agencies to foster technology development and commercialisation. Indian companies or partnership firms with majority stakes and functional R&D laboratory or incubated in an incubator/ biotech park with DSIR recognition and scientists/ academicians are generally eligible for availing such grants. The Technology Development Board (TDB) is another organisation within the government framework with the sole objective of translating the fruits of indigenous research into commercial products or services. TDB provides assistance in the form of soft loan and/or equity fund under its Seed Support System Scheme.
International organisations such as BMGF, Wellcome Trust, Indo-US S&T forum, CEFIPRA etc. also provide funding support to healthcare innovations. Most international schemes have priority areas for providing funding support and are aimed towards commercialisation of technologies for societal impact. Funding opportunities are also provided through collaboration and fund allocation by Indian and foreign governments for promotion of joint activities that lead to innovation and techno-entrepreneurship through application of science and technology eg. Indo-US Science and technology endowment fund financially supports promising joint US-India entrepreneurial initiatives through grant programme.
Funding opportunities for intellectual property protection
Due to lack of support mechanisms for patent protection, a large portion of innovations emanating from the Indian public institutes, in particular, from SMEs, have not made their way to the marketplace. To step-up efforts and engage with India’s thriving biotech entrepreneurial ecosystem, several funding schemes are aimed to provide assistance for protection of IP for innovative technologies. IP protection and maintenance of innovative technologies is also supported as inherent component of the funding schemes supporting translational research as covered in Table 2. Table 3 summarises funding opportunities which specifically supports IP filing and prosecution. Patent Facilitation Cell of TIFAC (PFC-TIFAC), an enterprise under DST provides financial assistance to scientists and researchers working in universities, R&D institutions and laboratories and also to individuals in scientific and industrial fields for patenting their inventions which are proved to be workable, advantageous, useful and commercially viable. National Innovation Foundation (NIF) also provides financial support for IP to grassroots innovators.
Private/ Venture capital funding opportunities
Another source of funding for driving innovations is risk capital. Risk capital is an option where the provider reduces the burden of risk of the entrepreneur and thereby bears some part of the overall risk involved in technology translation. Risk capital is an important instrument for not only start-ups and innovative/ fast growing companies but is also critical to those companies looking at growth. Risk capital substitutes promoter’s contribution, thereby reducing the capital to be brought by the entrepreneurs. As per an annual report on Indian venture capital and private equity on startups released by IIT-Madras, only 8.3 per cent of startups are successful in getting funding. The percentage of funded companies globally is about 36 – 52 per cent, against the Indian startups which are about 5-11 per cent. For example, the Tata Capital Innovations Fund is a venture capital fund managed by Tata Capital. The fund invests in the range of $2 million to $10 million in early stage companies offering technology-based solutions for Indian as well as global markets. The Fund’s investment philosophy is to back the right entrepreneurial spirit by identifying investments which have a potential to create new growth opportunities; increase efficiency; bring affordability and accessibility to the industry or change the way business is conducted. The government has also initiated a venture capital fund as public-private partnership to support entrepreneurships through innovative technologies such as the Bharat Innovation Fund, Micro Venture Innovation Fund (MVIF) and India Inclusive Innovation Fund. A list of key venture capital funding opportunities in India is provided in Table 4.
The Bharat Fund, a public-private-academia partnership has been set up by the Centre for Innovation Incubation and Entrepreneurship (CIIE) of IIM Ahmedabad. The fund aims to support and provide funding (grants, seed capital, venture capital) and business support to innovation-driven start-ups that solve real problems faced by the masses of India through technology-enabled and rapidly scalable solutions. This fund primarily focuses on healthcare and life-sciences sustainability and digital technologies.
Micro Venture Innovation Fund (MVIF) is the first and unique micro-venture risk fund in the world, which provides funding to grassroot innovators under a single signature on a simple agreement of understanding, without any collateral or a guarantor. MVIF invests in risk areas with a probability of high failure, investing in those technologies and products for which either market does not exist or may be very limited. Apart from the financial returns, one of the key criteria for selection of a technology for MVIF support is social return or social value created for the benefit of society at large. India Inclusive Innovation Fund focusses on providing risk capital funding to enterprises that create and deliver technologies and solutions aimed at enhancing the quality of life at the bottom of the pyramid; and subject to applicable law work with other funds with objectives similar to its own. The fund supports investment at different stages of the enterprise development cycle – from early stages, through later phases of scaling-up of potentially successful solutions and business models.
Funding from angel investors
Many prominent companies, including Google, Yahoo and Alibaba have come with funding support from angel investors. Though, angel investors generally invest lesser amounts than venture capitalists, this alternative form of investing generally occurs in a company’s early stages of growth, with investors expecting upto 30 per cent equity. They prefer to take more risks in investment for higher returns. Some examples of popular angel investors in India are Indian Angel Network, Mumbai Angels, Hyderabad Angels etc. Some of these active angel investors have invested in many successful startups. Table 4 summarises the key VC and angel investors in India.
New funding initiatives
A number of new initiatives to support innovation have come up in the past two years as part of the Make in India scheme. These aim to support innovation and technology scale-up by various inclusive means such as funding, infrastructure support in the form of labs and incubators. These include the NIDHI, AIM, SETU, IMPRINT UAY etc. to name a few.
National Initiative for Developing and Harnessing Innovations (NIDHI) is an umbrella programme conceived and developed by the Innovation & Entrepreneurship division, Department of Science & Technology (DST), Government of India for nurturing ideas and innovations (knowledge-based and technology-driven) into successful startups. The programme would work in line with the national priorities and goals and its focus would be to build an innovation-driven entrepreneurial ecosystem with an objective of socioeconomic development through wealth and job creation. NIDHI aims to nurture start-ups through scouting, supporting and scaling of innovations. There are eight components of NIDHI that support each stage of the innovation cycle from idea to market. The first component of NIDHI is PRAYAS (Promotion and Acceleration of Young and Aspiring technology entrepreneurs) with funding support upto `10 lakh and the final components is the seed support system which provides upto one crore to start-ups through technology business incubators.
Atal Innovation Mission (AIM) is an umbrella scheme which has two sub-components – i) Innovation; and ii) and SETU. The AIM focusses on inviting aspiring entrepreneurs to solve India’s contemporary socio-economic problems via ‘grand challenges’ that offer substantial awards to incubate and scale up winning ideas. Self-Employment and Talent Utilisation (SETU) scheme’s resources are devoted to strengthening incubators and setting up ‘tinkering labs’ where ideas can be shaped into prototypes before they are ripe for funding.
Impacting Research Innovation and Technology (IMPRINT) is a first-of-its-kind Pan-IIT and IISc joint initiative to develop (a) New education policy, and (b) Roadmap for research to solve major engineering and technology challenges in selected domains needed by the country. The government has identified 10 themes under the IMPRINT scheme to promote innovations and DSIR has been identified to pursue innovations in the areas of manufacturing technology and water resources.
Uchhatar Aavishkar Yojana (UAY) is a scheme that would be applicable to the projects proposed by the Indian Institutes of Technologies initially. The projects should have collaboration between the academia and industry, within or outside India.
New Generation Innovation and Entrepreneurship Development Centre (NewGen IEDC) is a programme launched by National Science and Technology Entrepreneurship Development Board (NSTEDB), DST. NewGen IEDC will aim to inculcate the spirit of innovation and entrepreneurship amongst the young S&T students, encourage and support start-up creation through guidance, mentorship and support. The programme will be implemented in academic institutions. Students will be encouraged to take up innovative projects with possibility of commercialisation. NewGen IEDCs would also spread the message of entrepreneurship and create a culture of entrepreneurship in the Host Institution (HI). With faculty already trained in the nuances of entrepreneurship, the presence of NewGen IEDCs in HI would create a vibrant entrepreneurial culture amongst the students. Few amongst the ‘Job-Seekers’ would be converted to ‘Job-Generators’ through the entrepreneurial route.
The investment climate in India for supporting innovation-driven technologies is very supportive. To make various initiatives of the Government of India such as Make-in-India, Start-up-India, a successful reality, huge investments are being made by the government, international agencies and private partners alike. Department of Industrial Policy & Promotion (DIPP) has initiated a start-up fund of Rs 10,000 crores. During 2016-17, DSIR has committed Rs 27 crore, DeiTY Rs 3 crores and BIRAC has earmarked Rs 120 crores for the start-up and innovation industries. DST has also allotted Rs 180 crores to promote innovation and entrepreneurship. BIRAC has identified the areas of Biopharma including vaccines, bio-agriculture, bio-industrial and bio-informatics for building the national biotechnology capabilities and has initiated several new awards to promote innovations such as SITARE (BIRAC-SRISTI GYTI Awards), BIRAC Hackathons, BIRAC Technology Day Award and BIRAC Innovator Awards.
References:
1. Department of Science and technology-www.dst.gov.in
2. Department of Scientific and Industrial Research (DSIR)- www.dsir.gov.in
3. Micro, Small and Medium Enterprises (MSME)- msme.gov.in
4. NITI Aayog-http://niti.gov.in
5. Indo-US Science and Technology Forum (IUSSTF)- www.iusstf.org
6. Biotechnology Industry Research Assistance Council-http://birac.nic.in
7. Department of Biotechnology – www.dbtindia.nic.in
8. Technology Development Board (TDB) -http://tdb.gov.in
9. The National Science & Technology Entrepreneurship Development Board (NSTEDB)- www.nstedb.com
10. Venture Center- www.venturecenter.co.in
11. Start-up India- www.startupindia.gov.in