India’s start-ups are not lacking innovation but imagination

We suspect the problem is not simply about policy or entrepreneurship, but a deeper failure of collective imagination. To put it bluntly, India lacks democratic horizons of techno-futurity. India’s elites have reduced innovation to the latest mobile app or AI wrappers, equating innovation with Silicon Valley mimicry. It seems India has instrumentalised start-ups as mere props for national pride. For example, NITI Aayog’s recent seven-page “R&D Vision 2035” calls to urgently emulate China’s “DeepTech” frontiers. This vision reveals a mindset of catch-up, not confidence in charting an independent path to imagining techno-futures for the collective good.

Let us consider UPI, the oft-cited proof of India’s innovation potential. India has been pitching DPIs to the world as revolutionary alternatives to Western Big Tech. However, the global response has been underwhelming. Beyond the hype, there are still questions about UPI’s sustainability in the absence of government support. FinTech scams ruining the lives of Indians add to the worry. The vision of public-private partnerships behind DPIs offers hope, but the abuse of “open source” and opacity in industry partnerships through “volunteers” hardly inspires confidence. Why, despite being the fastest-growing major economy, is India unable to convert its tech potential into global competitiveness? Beyond the goal of linking everything to Aadhaar, is there a shared, long-term technological vision of Startup India, Digital India, or the recently retired Smart Cities mission?

Such vision-agnostic digitalisation is symptomatic of a narrow social imagination that privileges a small minority of elites to dictate the rest of India’s techno-futures. Outsourcing the work of imagining transformative techno-futures to this small group not only leaves behind most Indians in terms of representation but also impoverishes India’s collective capacity to imagine techno-futures differently from American and Chinese paradigms.

It is tempting to credit start-ups alone with breakthroughs, but history disagrees. India’s IT services boom emerged not from lone entrepreneurs but from decades of government support for English and engineering education, STPI’s satellite internet links, tax exemptions, and economic liberalisation. OpenAI became possible because of the Canadian government’s sustained funding for Geoffery Hinton’s AI research. But current debates in India obfuscate such facts. The Silicon Valley model demands start-ups chasing rapid scalability and quick exits, seldom supporting the long term exploratory research needed for paradigm-shifting discoveries. As a result, India’s ecosystem produces countless copies chasing the growing disposable income of the top 5 per cent of Indians.

India’s deep systemic inequalities, sub-continental scale, and federal architecture necessitate greater (not lesser) government intervention to prevent innovation from becoming a billionaire-driven agenda like in the USA. This requires reimagining the government’s role at the federal and state levels to open more democratic horizons for imagining new techno-futures. We need forums where farmers, gig workers, artisans, ASHAs, Particularly Vulnerable Tribal Groups, as well as scientists and engineers, can dialogue. Such experiments may not yield short-term results, but our current approach is bound to fail in the long term.

Innovation thrives in democratised knowledge ecosystems — libraries, labs, mentorship networks, and societies’ orientation to the public good. India’s knowledge infrastructure is starved, with academics having little say in running institutions. Approximately 40 per cent of faculty positions at premier institutes remain vacant, and public libraries receive a mere Rs 0.07 per capita annually. Indian high-net-worth individuals rarely support existing universities. This leaves the majority of our education and research vulnerable to stagnation from the mediocrity of the few who get to have an outsized influence. Without mentors or community learning spaces, aspiring innovators of Bharat who do not have caste capital lack environments to experiment, fail, and iterate, thereby severely constricting our collective potential and possibilities.

Instead of democratising, India has centralised innovation by implementing Startup India’s programmes in hundreds of small cities in a top-down fashion. Over 90 per cent of venture funding flows to Bengaluru, Delhi NCR, and Mumbai. The government is the biggest facilitator of the start-up ecosystem in tier-2 and -3 cities. However, they have handed over the work of running incubators to consultants who have little expertise in non-managerial forms of innovation. In our research, we have interviewed scores of entrepreneurs complaining about the lack of a “culture of entrepreneurship” in small cities as the primary reason behind their failure. Cultural dimensions of innovation and entrepreneurship cannot be downloaded from Bengaluru. They require long-term investments in education, health, and social infrastructure.

Compounding India’s spatial inequality, caste, and gender inequalities exclude the majority of citizens from even participating in technological future-making. Recently, Apple’s investment under the Production-Linked Incentive (PLI) scheme highlighted the inadequate human capital to “Make in India”. Indian manufacturing underperforms because industrial policy debates rarely reckon with the realities of human capital availability. More than 35 per cent of children are stunted, over 50 per cent of women are anaemic, and 25 per cent of high-school graduates struggle to read. Alarmingly, critical socio-economic indicators seem to be declining even after tangible improvements in welfare goods in recent decades. Despite India Stack, the absence of the 2021 census makes data-driven innovation in governance practically impossible. India’s existing welfare architecture has the potential to include the India that is Bharat in improving innovation outcomes for the world. But for that, policy areas such as welfare programs, taxation, and MSME, among others, must be enmeshed in R&D visions, industrial policy, and start-up ecosystem.

We are not promoting a Maslovian hierarchy of needs where only after redistribution should India do start-ups. We are suggesting a rethinking of how India imagines its futures, its place in the world, and which Indians get to imagine it. Bharat is not involved in these conversations today. The Indus Valley annual report, published by Blume Ventures, which vertically classified the country into India 1, 2, and 3, sees India 2 and 3 as passive recipients of India 1’s offerings. It does not question India 1’s capacity to imagine transformative futures. The next disruptive innovation — whether climate resilient crops, energy independence, or the discovery of new materials — is unlikely to spring from an exclusive club of elite entrepreneurs. It is especially unlikely to come from blindly following or even customising the American or the Chinese model to the Indian context. It will need a democratically generated social compact beyond the performativity of MyGov comment requests, that reimagines innovation first as a social and democratic process.

Only by weaving start-ups into a broader social and federal tapestry can India reimagine its techno futures beyond a mimicry of the USA’s Elon Musk model or China’s state-controlled economy. We need more than “DeepTech”; we need a deep democracy of innovation, responsive to domestic realities and global challenges, that involves every Indian — from an Adivasi girl in Hasdeo forest to an entrepreneur in a government start-up incubator in Jaipur — to shape our shared futures.

Mertia is professor of science, technology, and society at Stevens Institute of Technology, USA. Solanki is doctoral researcher in Anthropology at the University of Toronto, Canada. Both are alums of the Dhirubhai Ambani Institute of Information and Communication Technology, Gandhinagar, Gujarat