Poyni Bhatt is a founding team member and former Chief Executive Officer of SINE, the technology business incubator at IIT Bombay until October 2023. She has an experience of 38 years in industry and academia of which she spent nearly 20 years with SINE. Poyni is a qualified legal and compliance professional- Fellow member of the Institute of Company Secretaries of India.
Entrepreneurship in India has witnessed an unprecedented surge in the past ten years. This surge has been driven by technical and business innovations. Indian startups are not just making waves domestically but are also gaining international visibility. While the liberalisation in early 1990s created a supportive environment for businesses and entrepreneurship, it was only in early 2000 that Government started initiatives to promote entrepreneurship by formally launching incubator-support schemes. By middle of the last decade, startups and incubator support programmes from the central and state governments grew exponentially. Government initiatives were mostly implemented via academic and research institutes. As a result, Academic and R&D institutes started adopting new initiatives to promote entrepreneurship on their campuses. By an estimate, there are more than 1000 business incubators in the country, and majority of the incubators are hosted by or linked to academia including technology and engineering institutes, public and private universities, publicly funded research labs, medical institutions.
The adoption of innovation, startup and incubation programs in educational institutes and universities has had several influencing factors. Among the ranking parameters of the National Institutional Ranking Framework (NIRF) exercise of the Ministry of Education, Government of India, are indicators of Innovation and Entrepreneurship Development in institutions of higher education. This ranking exercise together with the requirement of having Institute Innovation Councils (IICs) has motivated educational institutes to adopt innovation and entrepreneurship programs. Various governments initiatives to promote innovation and entrepreneurship made initial grants available for setting up incubators in educational and research institutes and initial financial support for startups. Educational institutes started promoting innovation and entrepreneurship in their curricula and extra-curricular activities to enhance their image. Entrepreneurship clubs (e-cells), incubation centres, and innovation and startup activities on academic campuses are becoming as normal as imparting education. However, very few business incubators hosted in academic centres have evolved as stand-alone institutions operating like independent entities with proper business focus and autonomous organisations. The role of the host institute becomes very critical in institutionalising incubation centres. To promote entrepreneurship in an institutional manner, a host institute’s role is to shape enabling mechanisms and processes, create conducive culture, building local ecosystem, and most importantly making an autonomous independent organisational structure empowered with functional and financial autonomy.
Policies and Processes
To promote entrepreneurship, educational institutes must introduce systematic mechanisms and processes that are favourable to researchers and innovators who aspire to be entrepreneurs. Some of the important policies required to be addressed in context with innovation and entrepreneurship are:
- National Innovation and Startup Policy: The Ministry of Education has formulated NISP in 2019 with the intention of guiding Higher Education Institutions to promote student and faculty-driven innovations and startups. All educational institutes are expected to adopt and create their own policies for promotion of entrepreneurship within their institutes.
- Intellectual Property (IP) license for a startup venture on entrepreneurial-friendly terms. Institutes should frame efficient policies for IP licensing which reduce time for negotiation, are affordable to startups and have simple terms. Simple policies such as license of IP to a startup on fixed commercial terms, giving a reasonable time to a licensee startup to commercialise it, and simple licence agreements would accelerate the pace of commercialisation.
- Policy for faculty participation in startups. The strongest value offering by educational institutes, especially those which are technology and science based, is the innovations, research and faculty expertise developed over a period. It is important that enabling policies are introduced to permit faculty members to participate in startups as co-founders or as mentors. In addition, policies such as sabbatical leave or rewarding measures in form of appraisals and promotions or permitting equity holding against mentoring will make their participation in startups highly effective and eventually enhance the institutes’ success in the long term. Due weightage for startup activities needs to be provided in academic performance indicators. Faculty members may be permitted to hold equity in lieu of services to startups.
- Access to Laboratory and testing facilities. Strong tech and deep science need access to experimental and prototyping facilities at economical costs. Educational and research institutes are best poised to facilitate on this front. Creating policies around accessing laboratory infrastructure by startups will attract and retain strong IP based startups on campuses.
- Student and alumni startups: Students need to be encouraged for taking up entrepreneurship. Liberal policies such as allowing semester breaks or deferred placement policies for pursuing entrepreneurship will enable student-enterprises in academia to flourish.
Mindset, Culture and Ecosystem
The essence of entrepreneurship is people, and talent combined with a participative and risk-taking culture. This would include formal and informal activities and systems favouring entrepreneurs. The mindset in academia is driven more towards achieving academic excellence. This, at times, tends to limit creativity and risk-taking ability. More than often, commercialisation in academia is considered a parallel economic activity which is often seen in conflict with core academic and research activities. The culture in educational institutions needs to encourage their academic communities in multi-directional thinking and attitude. Exposure to R&D centres, Industry-academia collaboration, and entrepreneurship courses are formal approaches to ignite interests in entrepreneurship. Informal activities like e-cell and tinkerers’ labs are informal ways to convert entrepreneurship interests into actions. Hackathons and startup competitions have been regular features in education institutes, and these provide a platform to showcase startup ideas and receive feedback from industry experts. Winning such competitions often helps startups get visibility, funding opportunities and market validation. Talk series and workshops on various aspects of venture creation would bring matured thinking in potential entrepreneurs. Alumni play a very significant role in creating entrepreneurial culture. Strong alumni networks can provide invaluable support to startups. Alumni, especially those who are successful entrepreneurs, often act as role models, mentors, investors, and advisors. Their experience and connections help new ventures to succeed. For institutions, that do not have sufficient resources or history of entrepreneurship, engaging local communities to build support mechanisms and providing initial customers would also help nurture ideas solving local problems and leverage local industry expertise.
Organisational structure
Incubator as a separate entity in academia needs to be a long term operationally and financially sustainable organisation. To be effectively run, startup incubators are required to function as independent organisations with the objective to support startups. They need to have their own governing structure and executive team headed by CEO or an equivalent, empowered with financial and operational authority, and should function under the strategic direction of the governing board separated from the host institute. The governing board ideally need to be comprised of representatives of the host institutes and practitioners such as investors, entrepreneurs, and industry experts. It is external members who bring business strengths for startup incubators. The core objectives of the host institutes and startup incubators are very different and it would not be prudent to subject the startup incubators to follow the same bureaucratic processes as that of the hosts. Startup incubators are expected to build their own business models, and set up their own policies and processes and control mechanisms. All well performing incubators function as autonomous organisations.
To conclude, Indian academic institutions play a critical role in shaping the country’s startup ecosystem by providing a robust support system for entrepreneurship. They do so by offering mentorship and collaboration opportunities for research and development. However, it is not easy to build a self-governing organisation in academia given the differing objectives. Enabling mechanisms, culture, ecosystem and intention of the host institute have to align in creating long-lasting and impactful startup organisations within educational institutes. Host institutes and their leaderships have a role in making this in spirit and as a mandate.