How to leverage deeptech to bridge the gap between science and industry for future

Advanced technology is flourishing as startups and enterprises have started propelling innovation forward. From AI to reusable spacecraft, the companies are not only crafting groundbreaking solutions but also revolutionising diverse sectors. According to a recent report by EY and Nasscom, 99% of Indian B2B SaaS companies have adopted deeptech innovations. To unlock the future of the digital era there is a need to leverage deeptech that will bridge the gap between science and industry for tomorrow’s innovations. Unlike other technologies and tech companies, deep tech ventures require substantial scientific research and significant financial investment to achieve commercial viability through online investment platforms.

The major challenges these companies face amid the deep tech revolution include a lack of skilled deep tech talent, access to patient capital, and insufficient deep tech infrastructure, as highlighted by various reports. Deep tech demands specialised skills, and due to high demand and limited availability, the industry struggles to recruit and retain competent talent. Additionally, deep tech ventures typically take longer to develop than other companies, making it difficult to secure patient capital. Startups should leverage technology while balancing investors’ expectations, regulatory requirements, market access, and infrastructure.

Key features of deeptech
When talking about DeepTech, we can say that it refers to cutting-edge, science-based technologies that are currently being researched and developed, often within laboratories or R&D environments. These technologies typically have a long development and commercialisation cycle due to their complexity and interdisciplinary nature. Developing deeptech solutions requires substantial time, capital, and specialised expertise.

• Intensive Research & Innovation: Involves deep scientific discovery, experimentation, and technological breakthroughs.
• Long Gestation Period: Development and commercialisation timelines are significantly extended.
• Interdisciplinary Collaboration: Integration of multiple fields and expertise (e.g., engineering, biology, computer science).
• High Capital Requirements: Substantial investment is needed for research, prototyping, and scaling.
• High Risk: Due to its experimental nature, outcomes are uncertain and investments are inherently risky.
• Transformational Impact: Aimed at future-proofing industries and creating fundamental shifts in technology and society.

Understanding the domains
Deeptech is making significant strides across various domains, including Artificial Intelligence (AI) and Machine Learning, which continue to revolutionise industries with advanced capabilities. Quantum Computing holds the promise of unprecedented computational power, while Biotechnology is reshaping healthcare and agriculture. Robotics and Automation are enhancing efficiency in manufacturing and logistics, and Blockchain and Cryptography are redefining security and transparency in digital transactions. Additionally, advancements in Advanced Materials Science and Photonics Electronics are paving the way for innovative solutions and technologies that have the potential to transform everyday life.

Live Events

Where can we apply deeptech?
Deeptech innovations are being applied across multiple sectors, including:

• Mobility & Transportation
• Aerospace, Space, and Defense
• Precision Medicine & Healthcare
• Agritech
• Sustainable Building Materials
• Energy and Renewables
• Advanced Manufacturing

Policy recommendations for government support
Government should introduce a proposed framework to revolutionise the deeptech investment landscape through a multi-faceted approach.

Creation of a sovereign investment company (“Gov Co”)

• Modelled on Temasek, the entity would be a listed for-profit company with government and private sector participation.
• Independently run by professionals from the private sector.
• Mandated to invest in deeptech with a long-term vision.

Sponsoring deeptech-focused venture and PE funds

1. These funds would be thematically focused (e.g., AI, biotech, etc.) with clear investment theses.
2. Manned by financial and domain experts.
3. While the government would act as the sponsor, funds should also raise capital from private sources.

Support deeptech venture studios

• Studios act as incubators with extended support: capital, research expertise, productisation, branding, GTM strategies, and network access.
• Staffed with multidisciplinary teams to assist startups in achieving commercial viability.
• Consider a step up from traditional accelerators/incubators, providing an “exoskeleton” for startups.

Private sector-led venture studios

• Entirely private sector-funded and profit-driven.
• Operate autonomously and hold equity stakes in the ventures they support.
• Global data suggests that venture studio-supported startups have a 60% success rate, significantly higher than average.

Geographically distributed tech studios

• Location-specific deeptech studios based on regional strengths.
• No government interference in operations.

Additional support mechanisms for deeptech ventures
There are various points to look after for additional support mechanisms especially required for deeptech ventures, which include strategic investments in R&D infrastructure, where venture studios can exchange equity stakes for R&D facility investment. To foster growth in the sector there is a need to introduce tax incentives offering a 150% depreciation benefit for capital investments, alongside GST and income tax relief for at least five years for early-stage deeptech companies. Moreover, setting up specialised funding platforms such as a Deeptech Exchange would enable early-stage deeptech firms to raise capital based on their team and project potential, with the possibility of listing even at the project level upon board approval. Promoting Employee Stock Ownership Plans (ESOP) by facilitating their listing and providing tax breaks on allotments—making them taxable only upon a liquidity event—could enhance investment appeal.

An Intellectual Property (IP) exchange would enable the monetisation of intellectual property rights through sales, licensing, and royalties. To encourage technology adoption by Public Sector Undertakings (PSUs), a special recognition board could be set up for approved technologies, mandating non-tendered orders for recognised and distinct innovations. Corporations could benefit from tax incentives when investing their CSR funds into deeptech projects, fostering further development in this transformative sector.

The author is the founder of T9L QUBE.

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}