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TWTW Weekly Wrap Up: 26 March-1 April

"Tech SMEs are the catalysts of innovation and transformation in the Indian economy. They have the opportunity to leverage technology to solve problems, create value, and grow exponentially." - Jagdish Mitra, Chief Strategy Officer & Head of Growth, Tech Mahindra

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Last Week’s Latest

  • Salt Labs, a rewards platform for hourly workers, emerged from stealth with USD 10 million in pre-seed funding.
  • Google Partners with AI Startup Replit to Take on Microsoft’s GitHub.
  • Amazon opens its low-bandwidth, long-range Sidewalk network to developers.
  • Zoom is introducing new features to compete with numerous companies including Slack, Calendly, Google, and Microsoft. 
  • Alibaba splits into six in biggest overhaul in 24 years; The e-commerce behemoth said that it will split into six business groups, which will each be managed by their respective CEOs and follow a holding company structure.
  • Shipments of iPhones made in India surged 162 per cent in value terms.
  • Tech SMEs revenues to double to USD 40 billion by FY30: NASSCOM.
  • Union minister for electronics and information technology, Ashwini Vaishnaw, hinted at a "big announcement" regarding India's own version of an artificial intelligence (AI) chatbot, similar to ChatGPT, anytime soon. 
  • Mahindra-Qualcomm-backed Deep Tech Startup Carnot Technology Enters the Agri Fintech Space.
  • NPCI has recommended interchange fee on UPI for transactions over Rs 2000 made through Prepaid Payment Instruments (PPIs).

Focused Story Of The Week #1: Startups And Big Companies: How To Partner For Innovation And Growth

In recent news, Google has partnered with AI Startup Replit to take on Microsoft’s GitHub. In today’s fast-changing and competitive market, big companies need to innovate and adapt to new technologies and customer needs. One way to achieve this is by partnering with startups that have agility, creativity and novel solutions. Such partnerships can benefit both parties: startups can gain access to funding, resources, customers and markets, while big companies can accelerate their innovation, product development and digital transformation.

A successful example would be when Microsoft partnered with Flipkart to provide cloud computing services and help Flipkart optimize its data analytics and machine learning capabilities. The partnership also gave Microsoft access to a large and growing market of online shoppers in India.

However, partnering with startups is not easy. There are many challenges and risks involved, such as cultural differences, misaligned expectations, regulatory hurdles and power imbalances. Therefore, big companies and startups need to follow some best practices to make their collaborations successful. 

Start with a pilot project. Instead of committing to a long-term or large-scale partnership, big companies and startups should test the waters with a small and focused project. Big companies can partner with accelerators to scout for potential startups that match their strategic goals and challenges. Set expectations for startups upfront regarding any regulatory challenges they’ll encounter. Big companies often operate in highly regulated industries that have complex compliance requirements. Startups may not be aware of these or have the capabilities to meet them and hence would require some amount of handholding to ensure compliance requirements are met.

In conclusion, partnerships between big companies and startups can create more value for both parties and their customers by combining their strengths and overcoming their weaknesses. However, such partnerships are not easy and require careful planning, communication and execution.

"Partnering with startups is not just a strategy, it’s an adventure. It’s a way to explore new possibilities, learn new skills and create new value."

Focused Story Of The Week #2: The Rise Of Tech SMEs In India: Challenges And Opportunities For Economic Growth

The Indian economy is witnessing a remarkable growth story, thanks to the contribution of tech SMEs. These are micro, small and medium enterprises that leverage technology to offer innovative products and services in various sectors such as cloud computing, artificial intelligence, internet of things, software as a service, etc. They are one of the prime drivers behind the growth story of the Indian economy, contributing significantly to export production, domestic production, low investment requirements, operational flexibility, and technology innovation.

The tech SME sector in India is expected to grow by double digits to USD 40 billion by FY30, up from USD 15 billion - USD 20 billion in FY23. This growth will be driven by the increasing demand for digital solutions such as cloud services, advanced analytics, and artificial intelligence, which will comprise 35-40 per cent of the overall tech SME revenues by FY30.

However, the tech SME sector also faces some challenges and headwinds, such as the lack of a leadership pipeline, limited enterprise clients, no sustained product innovation, and a temporary market shrink caused by the global slowdown due to the Covid-19 pandemic. To overcome these challenges and capitalize on the growth potential, tech SMEs need to adopt a digital-first approach, fast-track innovation, leverage supportive government policies and incentive schemes, and forge dedicated connections with industry and academia.

By doing so, tech SMEs can create a positive impact on the Indian economy by enhancing its competitiveness, creating employment opportunities, fostering innovation and entrepreneurship, and addressing social and environmental issues. Tech SMEs can also diversify their offerings across geographies and tap into new markets such as North America, Europe, APAC, and the Middle East. Tech SMEs have long been the backbone of the Indian tech industry and they have the potential to rise in the global digital arena.

"Tech SMEs are the catalysts of innovation and transformation in the Indian economy. They have the opportunity to leverage technology to solve problems, create value, and grow exponentially."