Artificial Intellige,Blockchain,Convergence,Digital Xn,India,Internet of Things,Machine Learning,

Global Emerging Technologies Innovation Trends and Their Potential Adoption in India in 2018

This Analyst Note evaluates the key global trends in emerging technologies - AI/ML, Blockchain and IoT - in 2017, and innovation by the Indian technology companies. And, provides an outlook for the potential adoption of these technologies and their implementation in India, in 2018.

Globally, 2017 Was The Year “Deep Tech” Went Mainstream

Deep Tech”, a term finding increased adoption in the investor-speak is used to describe startups or companies whose business is built around unique, differentiated, often protected or hard to reproduce, technological or scientific advances. For instance, a startup that uses a public or semipublic machine learning API would be a technology startup; and a startup building a 3D real time artificial vision system for autonomous vehicles using its own R&D, building on advanced math, would be a "deep technology" startup. This distinction does matter significantly to investors as the business potential of the latter startups can only be assessed starting with a deep scrutiny of the underlying technology.

The growth dynamics and advance developments of trio of emerging technologies - AI/ML, Blockchain and IoT - in 2017 have hit an inflection point, enabling deep tech startups go mainstream.


  • “There’s an AI for that”: In 2017, AI was used for any and all kinds of applications including transcribing conversations, writing a movie script from the scratch, writing a chapter of a Harry Potter book by learning from the previous seven books, creating a heavy metal music album from the scratch, apart from helping companies in their marketing and customer support activities. We are entering the AI version of the popular “There’s an app for that” adage (from mobile apps era).

The competition between US and Chinese technology giants in the AI space, the large technology companies such as Google, Amazon, Baidu, etc., overhauling their core strategies to evolve as “AI-First” companies, the focus of semiconductor companies such as nVidia, Intel, etc., to build AI chipsets, the focus on talent acquisition and increased acquihiring in the AI space and the evolution of “Conversational UI” and voice apps (for Alexa and other platforms) have made AI the most trending technology buzzword of 2017.


  • Bitcoin’s rise of ~1800% in 2017, brought Blockchain into spotlight: In 2017, Bitcoin evolved from an obscure curiosity to a household name, with it’s value rising from USD 1,000 at the beginning of the year to over USD 19,000 (and counting) by mid-December. At its peak in November, over 100,000 new users were being added to Bitcoin trading every day. While Bitcoin’s future is still highly speculative, it’s exponential rise has put the focus on “Blockchain”, the technology behind Bitcoin.

Although blockchain so far has been synonymous with mining cryptocurrencies, the basic features and characteristics of this technology such as it being Secure, Transparent, Autonomous, Open, Decentralized, Immutable, Permanent and Democratic, lend it to be used for many applications and solutions across various industry verticals, outside of Banking and Finance. In the music industry, we are witnessing the use of blockchain not just for artists’ royalty payments, but also for them to connect and engage with fans. In digital retail, blockchain is enabling easier and faster purchase and transaction of merchandise in P2P marketplaces. In urban transport and mobility, blockchain-based solutions are being used for ride-sharing applications and traffic decongestion. In town planning and development space, blockchain is being used for secure management and monitoring of property records and contracts.


  • IoT went mainstream in Industrial and Enterprise sectors: Industrial and Enterprise IoT solutions are primarily in the verticals of Smart Manufacturing, Industry 4.0, Smart Grids, Oil Rigs & Refineries, Wind Farms, Retail, Logistics, etc. Consumer IoT solutions are being developed in Home Automation, Healthcare, Quantified Self, Sports, Automotive, Entertainment, etc.

In 2017, with lack of standards, interoperability issues, fragmented platforms and scarce funding, consumer IoT companies found it difficult to evolve and scale. Over three quarters of investor funding was directed towards industrial IoT solution providers. Moreover, the defocus on hardware by US companies such as Google announcing NEST to be a software-only platform, to closure of it’s hardware-led projects (such as Project Ara), and trouble with hardware other startups such as Skully, made it difficult for consumer IoT to garner support, globally. The Dyn cyberattack (in October, 2016), that took down the internet service across major parts of Europe and US (which was essentially a DDoS attack using connected CCTV cameras), has brought the security issues of IoT into spotlight. All these developments led to IoT being limited, and it scaled (cautiously) in the industrial sector as compared to the consumer solutions.


The Indian Technology Innovation Engine Was in the Clean Up Mode

In 2017, India has been transitioning through to the second phase of technology startups based innovation and investments cycle. Most of the technology innovation (at least at the startup level) is VC investments led in India. And, there has been continuous consolidation of the first phase consumer internet and mobile startups (primarily to cash out the early backers of the ecosystem), and emergence of first generation, VC investments-backed technology giants – Flipkart, PayTm and Ola. These three companies have not only rapidly influenced and changed the digital consumer dynamics in India, but also attracted majority share of VC investments in the country. India, unlike Japan, US or China lacks big name domestic investors, and the technology startups in the country are dependent on US-based VCs, (and, in the recent past) China’s Alibaba and Tencent, and Japan’s Softbank.

As for the innovation in the emerging technologies and deep tech is concerned, India is lagging the rest of the world when it comes to quantum of innovative products and solutions, primarily due to the lack of requisite expertise and talent, investor risk appetite and founders’ need for early revenue generation. Most Indian companies working in emerging technologies space, especially in AI/ML and Blockchain, are service providers or data aggregators (in case of AI startups), and only handful are developing innovative, globally scalable products. Most of the innovation in emerging technologies, especially AI, is happening in-house the large and well-funded companies – be it Reliance Jio’s investment and focus on advanced analytics, PayTm’s machine learning based recommendations and fraud detection, Flipkart’s predictive analytics engine, IDFC Mutual Fund’s AI-based fund that picks stocks for portfolio, manages it and suggests exit opportunities… the innovative and creative deep tech development using emerging technologies was limited to deep-pocketed companies in India, in 2017.


In 2018, Indian Technology Companies Will Primarily Innovate for Domestic Market and Opportunistically Scale Globally

Globally, young companies in the emerging technologies space are innovating and developing intellectual property with wide, global adoption potential. Be it Bite.ai’s (Shazam for food) two-member team that used advanced clustering algorithms and proprietary support vector machines to vectorize and classify over a million photographs in just two weeks, or Underwrite.ai’s use of AI advancements in genomics and particle physics to provide lenders with non-linear, dynamic models of credit risk that radically outperform traditional approaches in the banking sector, or SingularityNET’s (a decentralized marketplace for AI) aim to solve interoperability issue of AI leading the way for data collaboration, especially for IoT products and solutions… there are rapid advancements and innovation by small teams in various areas of emerging technologies. Indian companies currently lack requisite vision, expertise, talent and investor confidence to develop such generic solutions in the emerging technologies space.

However, in India, in 2018 technology-led innovation and entrepreneurship is expected to solve domestic issues and shift towards middle-India to tap the potential 300 mn to 500 mn mobile-first consumer segment. Be it India Stack’s UPI and further API’sation of banking and payments infrastructure, Metro Bikes’ (a Bangalore-based startup) customization of the global success of dockless bicycle sharing through scooter sharing in India, Reverie Technologies’ language-as-a-service platform – transliteration, input, localization, multi-lingual search – developed for Indic languages… all these initiatives and companies are using emerging technologies such as AI/ML and IoT to solve India-specific problems. And such innovations are expected to scale, capitalizing on early-mover advantage and capturing market share in India in 2018, before scaling globally. Also, from the investors’ point of view, the marketability and revenue-generation capability of India-specific solutions for middle-India market needs to be proved at scale. And, 2018 is going to be the year of cautious experimentation for Indian companies in the emerging technologies innovation area.

Currently, almost all of the emerging technologies have significant gating issues that will restrict their growth and adoption beyond a certain point and scale. AI & ML have large, structured data sets requirement issue, cryptocurrencies mining and blockchain have excessive power requirement issue and IoT has interoperability and security issues. There exist opportunities for companies that are working to solve these issues and reducing this friction, to evolve as the next billion-dollar (revenue, not just valuation) companies in future.



Disclosure: Convergence Catalyst advises and mentors Metro Bikes team in India, and works closely with Underwrite.ai and Bite.ai teams in US.


An abridged version of this Analyst Note was originally published as an Op-Ed in Mint's Quarterly Technology Review on 28th December, 2017.