Amit Mookim, President, TiE Mumbai & MD, IQVIA, discusses the post COVID scenario both from a TiE and general economy perspective.
India’s GDP contraction was worse than any of the World’s biggest economies. With a slew of government initiatives, how do we expect the Indian economy to ship up over the next few quarters? What are your expectations from the government?
What obviously happened, if we break it down between supply and demand related pushes, the first few months of the lockdown obviously saw a supply related contraction because of logistics being clammed up. Then though we were expecting that as the supply constraints went off, demand would not pick up as much as it would, but apart from a few sectors, which have naturally got impacted, because of this situation, we have seen a great pickup in demand across sectors. This is very encouraging from the Indian economies perspective.
When I speak of healthcare, of course, one of the areas that did get impacted was patients postponing their procedures, not going to hospitals for fear of infections as well as moving forward, some of the important electives that they had to. Now, while that has seen a comeback, I think that is something which has a downstream impact on economy because we will just increase the cost of care.
From the Government’s point of view, it is also a wait and watch and there are many variables that are still unknown. When I look at India and when we looked at the progression of the disease, India is not one country. It is a conglomeration of 31 different units that behave very differently at any point of time, with different health infrastructure, and different demographics. Hence the challenges are even more.
I personally feel that the next year is also a wait and watch year on many fronts. The next year is an important year because there are certain developments that are taking place right now and the outcome of those developments, we will only know next year as they come across. But, so far I am quite optimistic that we are moving forward in the right direction, despite the infrastructure challenges which would have made managing this pandemic much more difficult in any other country.
Many say that great companies often come out during market downturns. How have you seen entrepreneurship excelled over the last few months?
If you look at what has happened with respect to a few sectors, especially engineering, automotive transportation, one of the things which we saw was many large companies stepped up to the challenge of providing for infrastructure that was required to address the pandemic.
We had a few engineering and automotive companies produce ventilators. We created in a very short time, one of the largest supplies of PPE kit which is unprecedented. It has not happened just like that, but we’= have got the entire ecosystem come together. We saw the whole retail model pivot, both between online and offline. India emerged as one of the fastest growing economies for e-commerce, whether it was grocery or whether it was anything else.
From a pharma perspective, we saw companies actually work much closely on adoption of digital, and when doctors were not being able to see patients physically, we saw the explosion of telemedicine and remote consultations. The Government also stepped in and created the right regulatory frameworks to enable something like this. Quick adoption of digital, especially in a country that was very, very largely physical, was unique.
If we look at what happened on the education front, especially the big challenge we face on educational infrastructure, how right from state operated schools to private schools, the adoption of technology has taken place. I think some of it may reverse to some extent. But I think some of it has been permanent changes where models have pivoted, in terms of how content as well as services have been consumed digitally. It is a step forward for our country by no means.
COVID-19 impacted the start-ups and small businesses brutally. How do you see these businesses overcoming the challenges posed by the pandemic and demand disruption?
This actually is something we have been discussing in TiE as well. The bedrock of the Indian economy is the medium, small enterprises, the SME sector, the MSME sector. While India is a large base of entrepreneurial activity on technology and global offshoring and outsourcing and everything else, I think when we look at the brick and mortar and when we look at the SME sector, there has been a huge impact on working capital, on demand, on infrastructure and everything else. One of the things I think that needs to be probably thought through, is how do some of these MSMEs and SMEs get support on financing and continuity of business?
How could there be knowledge and exchanges where they could even pivot their model. For example, today, somebody who was running a restaurant, could they pivot their model to a cloud kitchen? Could they pivot a model to something else? Because the demand for that particular outlet may not be what it was 6-7 months ago. Or for someone who was in the business of travel. The travel entirely has gone through, what else could they do with the skill-set that they have?
And at TiE, we have been thinking about how we could create some of these programs, but this is a real challenge to be addressed. I do not think there is any simple answer to this, but all we feel is that this sector is actually the largest employer in the country, on both the organized and unorganized base. And while there has been a push with foreign investment coming in and entire push towards organization for certain sectors, we do not want the focus to move away from this. So we have been working along with, other agencies, along with non-profits, thinking through what needs to be done to support the sector.
Please elaborate on top priorities and focus areas of TiE over the next two years.
TiE being the global non-profit and an institution that stands on the bedrock of mentoring, networking, supporting entrepreneurial activity will play a pivotal role in actually creating opportunities, making some of these MSMEs look for new ideas, get funding, find co-founders and pivot them on.
Other thing is that the pandemic has taught us that no businesses local, at the same time, the playground for a lot of opportunities have become global. We will see many, many global companies coming into India and we will also see an opportunity for Indian companies to go global. However, I think one of the things that continuously needs to be done is how do we create the right environment for some of these Indian companies to scale up, build their profile in the global environment, network with other geographies and this is where the global network of TiE can play a massive role with our chapters in the Silicon Valley, Israel, Boston, London and Singapore, which is a FinTech hub, where we started exchange programs for entrepreneurs over the last few years, we want to really ramp that up because now a physical movement is no longer a barrier.
I think the third thing we really want to do is figure out a way in which we focus on three or four areas that we feel are going to really push forward innovation and growth in the Indian economy. Aeas around transportation, renewable and clean energy, around deep tech, ed tech, FinTech, health.
One of the things TiE has been doing very successfully is globally has been creating special interest groups, which is really communities of like-minded entrepreneurs who come from a certain industry background and work for the growth and development for that particular area.
These are the areas where we want to really bring and foster not only Mumbai based, but national and international knowledge exchange communities so that some of the areas can not only spawn Indian businesses, but to really grow these opportunities, then become global opportunities. Forexample, health care, I’m part of healthcare today. One of the things India needs to do is really champion affordable innovation for global markets, that is where the industry will grow. Because if you look at it, there are very few billion dollar companies in healthcare in India today. And why is that the case when healthcare itself is such a large industry?, so that has to happen. And that can only happen when agencies like us can create a platform for companies, entrepreneurs, angels, and VCs have a certain knowledge base and sector to come together and really push forward that agenda.
The last thing we want to do is given the excellent representation we have amongst the board, the charter members, the VCs and angels is really think through and support the government on certain regulations, incentive structures and enablers that need to happen.
For example, if you look at it globally, is that clusters of innovation are being set up. So you have an entire corner in London where innovation is happening or in Bristol or in Boston where pockets of innovation hubs are being set up, which is physical infrastructure, accelerators, the integration of Academia, as well as government and entrepreneurs to actually grow innovation and then make it really scalable and that is what I think even some of our cities need and Mumbai needs it. Because Mumbai today is at a point where the cost of living, the costs of setting up a business are quite high and we really need to figure out a way in which the supreme talent and the financial hub that Mumbai is can literally leverage growth of these businesses.
COVID-19 and news long down and it’s optimized has built an elongated period of uncertainty for many businesses. How is TiE Mumbai playing an instrument role in allaying, the troubles of businesses?
There are various aspects we have been trying to address. Over the last seven months, more than 25,000 entrepreneurs, startups have attended the hundreds of webinars that we have done and the topics of webinars have ranged from building resilience in entrepreneurship, managing mental health and wellbeing, managing cashflow, preserving cash, looking at new business ideas, bringing in trade bodies from other countries, whether it’s an Israel or a UK or US to look for Indian startups, looking at opportunities there, teaching them how to pitch to investors as well as for lots of investors, teaching them this art and science of investing. We’ve been playing extremely active role in bringing in some of this knowledge as well as opportunities in front of the startup ecosystem, because we know that at this point of time, a lot of what people need is the access to new ideas, new networks, as well as the ability to think through some quick solutions that can keep the business going. I’ll give you a statistic, which I was reading somewhere that there was a report that was done where it was found out that many, many founders had reached a point where they just had a few months of working capital. Now, working capital is so important in the initial few years of a startup and COVID-19 literally wiped out the cash-flow situation and the way it was planned. We did webinars on that front.
The other piece that lost a lot of ground was confidence building between investors and their investing companies, which really means that how do you continuously be transparent and communicate to your investors on an ongoing basis to make sure that they’re supporting.
You know your journey and if there is a breakdown of that trust, how do you deal with that? Because you are in a situation where you may not get the access to free capital. So this is what we have been doing, really bringing in very real issues and having a forum for discussing.
You are the board of several national industry forums on healthcare and venture investing, and you might have startups and actively promote the cause of entrepreneurship and innovation in healthcare. So according to you, how technology can help government in reaching population once the COVID-19 vaccine is available, especially in the initial phase of it?
Technology will play a massive role. It plays a role in three or four aspects. One is the vaccine that we’ll have still require an end to an infrastructure of logistics that can track and trace, how the vaccine is moving because the vaccine can change only so many hands. It needs to be stored at a particular temperature, beyond which it may not be effective.
It needs to reach the right point. It needs to be administered. Technology plays a huge role and tracking and tracing as well as cold chain technology is one aspect of it. I think the second aspect of it is really working through how you utilize and deploy the vaccine because today, if you look at the numbers that have been talked about, there is going to be a certain percentage of the population that will get inoculated over a period of time.
Now, how do you create those rules? How do you track them? How do you manage the data sets and as well as how do you create a payment mechanism so that no fraud or misuse or something like this happens. There again, technology is a role where the connectivity, as well as registration of these patients and tracking how the vaccine has been taken would need to be tracked because there is a quarantine period, especially if there’s a booster shot.
I think the third piece is adverse event tracking because there are so many unknowns, relating to effectiveness, long-term tenure of the vaccine, it’s very important to track what the outcomes and adverse events are going to be right over a period of time and there again, technology plays a role, especially at a large base like this, where one will need to feed back in any such events that are taking place that the government we need to course correct.
So to me, we cannot do this mammoth task in such an accelerated way without technology, whether it’s data sets, whether it’s the cold chain infrastructure, whether it’s the adverse event reporting, whether it’s a connectivity right down to the center, which is going to be vaccinated and creating those health records then.
The collaboration has been happening even through this time, where the private sector has stepped in. Lots of COVID centers were being managed by the private sector, the supply chain and logistics companies. There are so many innovative companies that are there. I don’t think that it is an either or situation. I think here it has to be the combined efforts.
Obviously, given the sensitivity of this, whole situation, I would expect that the government would drive a lot of the thinking and policy making around this, because there has to be a method. In which you really drive the vaccination of the people, whether they are healthcare workers or certain critical parts of the population and there you need an honest body and a regulatory aspect to overlay, pure play commercial considerations. That oversight has to be there but I do not think that this can be done completely on an individual basis, especially given the expanse that we have.
The government can’t take the whole cost burden. Cost has to be divided between the corporates, the employers and of course the government has to take care of the poor people and they could be philanthropic agencies also, what are your thoughts on this?
I’ll make it broader than vaccine. I think a country that we are, where the infrastructure is still developing, the income segments are so widespread, the tax base is so meager that putting the burden. Although I think the. Implementation design of healthcare has to be driven at the government and the state level. But the reality of the situation is I think a tiered healthcare system will continue to exist in India to make sure that universal health care happens. I don’t think it’s realistic to assume that we will achieve universal health care completely by only one party. It may turn out to be closer to an Australian system, where you have a copay as well as the public health infrastructure and that’s, that may be the right model for India for some time given the, the infrastructure we have.
I also feel that the innovation, the disruptive innovation, the affordable innovation does come out of entrepreneurship and India has been a base for entrepreneurship and in healthcare it’s much, much more required. What I really am encouraged by and the government has started to do this is create platforms for innovation and access, where we take in entrepreneurship, as well as innovation from the private sector, from startups and bring in mainstream into the public health system. Now, when that starts to happen, then you really got a true partnership going then it’s not two markets or two players sitting side by side, but it’s really taking some of the innovation that can make healthcare much more scalable and access.