Q&A: Romesh Wadhwani, founder of Symphony Technology Group and chairman of Wadhwani Foundation
For an entrepreneur who has floated almost all his ventures during recessions in the past, Romesh Wadhwani, founder of Symphony Technology Group and chairman of Wadhwani Foundation, says he loves recession which is a great time to buy companies and build discipline in one's organisation. In a chat with Kalpana Pathak, Wadhwani shares how his foundation plans to help Indian entrepreneurs. Excerpts:
You donated Rs 32.5 crores to two centres in India for research in biosciences. Why?
Yes. Both the centres-- the Shanta Wadhwani Centre for Cardiac and Neural Research at National Center for Biological Sciences (NCBS) in Bangalore and the Wadhwani Research Centre in Biosciences at IIT Bombay are part of the innovation initiative of the Wadhwani Foundation where we have pledged Rs 32.5 crore in total---Rs 7.5 crore at NCBS and Rs 25 crore at IIT Bombay. The opportunities for innovation in India are very broad. And we have chosen biosciences and bioengineering as the initial focus. We think it can help health care in India and also across the world. It takes advantage of the great Indian mind and talent. And focuses on areas where most other Indian foundations and corporations don't seem to be investing enough.
Why did you chose Cancer as the research focus here?
Cancer is one of the most difficult problems we have and anything that can be done to improve treatment of cancer will have a huge human impact. It will potentially open up a lot of opportunities for entrepreneurs to create companies and accelerate economic development. At IIT Bombay, one of the major projects of the Wadhwani Research Centre will be around therapies for cancer treatments. They are doing research and identifying why cancer spreads through out the body. If we could stop this spread and make it very localised, it would be easier to treat. Similarly, the research centre at NCBS is focused on cardiac and neuro research and will have a similar impact.
Will funding increase at IIT-Bombay in future?
The challenge that I have given IIT Bombay is to achieve a status of world class research organisation in biosciences and bioengineering. They are a great research institution, but there is a difference in standards between the best of Indian research institutions and the best of global research institutions. As they make progress towards becoming a globally world class research institution, I have told them that for individual projects we would be open to a public private partnership with the government or other agencies in India, funding a portion of this research programme. Wadwani Foundation will provide a complimentary funding. So there is no real limit to the kind of research funding that can be provided but it does need to be tied to demonstrative progress towards world class standards.
Do we see more research funding coming from your foundation?
In research, not yet. We are only exploring other possibilities. But if you take the full range initiatives of the foundation, it is expanding very rapidly. We are expanding funding for: entrepreneurship initiative, for programmes for the disabled and for skill development among other. We have begun an entire new bunch of pilot programmes for creating a whole new approach to community colleges and vocational training in India. We have established a new policy initiative to strengthen the bonds between India and US with economy development at India at the core of that policy initiative. I would say that funding for Wadhwani Foundation in India in 2012 is probably doubled against last year and would further double in 2013. This year funding would be in the range of around Rs 30-35 crore. Every year we update the five year plan and this time its around Rs 200-250 crore for the next five years, 2012 onwards.
Where does National Entrepreneurship Network (NEN) go from here?
NEN has done a magnificent job of building the infrastructure for training, mentoring and supporting entrepreneurs at the college level. So if eight years ago--- there were zero colleges teaching entrepreneurship, today we have 600 colleges; if there were no faculty members specializing in teaching entrepreneurship, today they are 1200; if there were zero students who had the potential to become first generation entrepreneurs, who were getting this kind of help, today there are half-a-million students who are seeking these services.
We want to expand the programme now-- to take the entrepreneur who we have trained through NEN and other entrepreneurs who may not have gone through NEN network-- and give them individual attention as they go from being university graduates to entrepreneurs. To help them bridge that transition we are trying to identify all the challenges or obstacles with respect to licensing, labour laws, capital, ability to attract management teams, ability to get support for prototyping etc. There are 20 different challenges that a prospective entrepreneur faces in India.
Given the regulatory and government approvals one needs, entrepreneurs do hit a roadblock. Is NEN doing something on that?
Yes. You can train an entrepreneur to have a passion. But that does not change the obstacles-- governmental, regulatory and otherwise. One of the important decisions we have made is that we need to be doing a lot of in terms of policy and research in entrepreneurship. No one in India, right now, is doing anything to really understand the obstacles that entrepreneurs face and what policy changes one needs to overcome. So we have begun a number of projects in that area. In fact, we would be significantly increasing our investments in the policy and research area and we would like to go back to the central and state governments with hard facts on the impact these obstacles are having in inhibiting the opportunities in India. We will encourage them and convince them to remove these obstacles.
So can you list three big obstacles for entrepreneurs in India?
Firstly: there are too many licenses and bureaucrats that an entrepreneur has to deal with, in order to get his company going. That should be removed.
Why should there by any licensing at all? Why should not an entrepreneur be able to start a company of his own choice without having to go to any bureaucrat? However, if some government agencies want to be informed of the venture, set up an on-line process for registering companies, or for informing the Registrar of Companies or state ministries that may have an interest. But don't make it an obstacle. Just make it process of information sharing.
Secondly: It is about early stage funding of product development. Today, Venture Capitalists in India behave like Private Equity and Private Equity behaves like industrial groups. Angel funding is non-existent when I think both private and public corporations have the ability to support innovation, product development etc. There is no reason why a 50 or 100 government enterprises like State Bank of India, Indian Railways, or a Bharat Heavy Electricals limited cannot come together to fund these innovation programmes.
Similarly, large corporations like Reliance Industries, Hindustan Unilever among others could also encourage innovation because sooner or later this innovation will come back and benefit them.
Finally: there is a big gap in providing funding once a product or service is ready for market. Venture capital is difficult to find even at that stage. Unless of course, you are a proven entrepreneur or you come from a business family. So we need some kind of small business and loan guarantee programme which is efficient and very easy to obtain. Where approvals are fast and yet it protects against fraud and abuse.
So why does not your foundation plug the gaps?
The Wadhwani foundation does not want to become a venture capital fund. That would be to cross the line from being a philanthropic organisation. We don't want to be in the business providing capital to individual entrepreneurs as it then becomes for profit. However, once we get these policy initiatives in place, there will certainly be a central resource for entrepreneurs, a place where they can go to get information on how these government obstacles are hopefully being removed and additional help is being provided to help them start companies.
We should also be a place where we can guide them to sources of angel capital or venture capital. We should be able to guide them through various governmental process. We will want to encourage well to do businesses and individuals to try and become angels and create small organisations regionally. The idea would be to create angel network because there should be an economic upside for them. We would encourage them as it helps entrepreneurs and entrepreneurship.
But investors are not very bullish on India...
I think that is very short sighted. Governments go through good and bad times and make political decisions driven by elections. But none of this changes the fact that India has millions of entrepreneurs in the making. These entrepreneurs will be there through good and bad government times. I think the fundamental forces of entrepreneurship have been unleashed. I think Indian entrepreneurs will be incredibly successful. They will succeed in spite of the government, rather than because of government policies. I have no doubt that with or without the Wadhwani Foundation entrepreneurship in India will thrive. With our foundation's help it will succeed at a greater scale and faster.
You mean slowdown will not impact entrepreneurship?
I think today, there is much greater readiness to become an entrepreneur than there was in 2008 slowdown. The economic challenges that one reads about will impact countries. But the Indian economy has much more reliance on domestic market and thus the potential for an Indian entrepreneur to succeed is entirely driven by the domestic economy. It should thus, not matter to anyone if the UK or Europe or US is doing well or not. Also, on the domestic side, its not like the economy is going from 9 per cent growth to a negative growth. Growth has slowed down, but still better than other economies. So there is huge opportunity for entrepreneurs to succeed here and not be mislead by headlines which talk about gloom and doom world over. It has nothing to do with India.
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