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USA-India-Israel Collaboration Report 2018

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A Zinnov-Indiaspora Report : Innovation has been a key driver for growth of the 3 nations – USA, India and Israel. In the report, we analyze the unique characteristics demonstrated by these leading economies with respect to innovation and the possible synergies that exist. With the 3 start-ups ecosystems being quite vibrant, their role in innovation and potential as a driving force for trilateral collaboration is immense. The market opportunities for innovation are also explored with collaboration being key to unlock these

A Zinnov-Indiaspora Report : Innovation has been a key driver for growth of the 3 nations – USA, India and Israel. In the report, we analyze the unique characteristics demonstrated by these leading economies with respect to innovation and the possible synergies that exist. With the 3 start-ups ecosystems being quite vibrant, their role in innovation and potential as a driving force for trilateral collaboration is immense. The market opportunities for innovation are also explored with collaboration being key to unlock these

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USA-India-Israel Collaboration Report 2018

  1. 1. USA-INDIA-ISRAEL Collaboration: An Ocean of Opportunities January 2018
  2. 2. 2Source: World Economic Outlook Database, World Bank Doing Business 2018 Report, The Global Innovation Index 2017 Report, NASSCOM-Zinnov Indian Start-up Ecosystem Report 2017, Economic Times, Crunchbase, Zinnov Research and Analysis USA-India-Israel (UII): As-is Innovation Landscape USA INDIA ISRAEL GDP1 | GDP Growth2 $ 19.4T | 2.2% $ 2.4T | 6.7% $ 0.35T | 3.1% Ease of Doing Business Ranking3 6th 100th 54th Global Innovation Index Ranking4 4th 60th 17th # Startups 50,000+ 5,000+ 5,000+ Total Funding $ 40-45B $ 3.5-4B $ 4.5-5B # Unicorns 124 10 3 # Incubators/ Accelerators 1,500+ 190+ ~190 Innovation Indicators Notes: 1. Current Prices 2017, 2. Annual Real GDP Growth 2017, 3. A high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm. The rankings incl. 10 topics - Business Rank, Starting a Business, Dealing with Construction Permits, Getting Electricity, Registering Property, Getting Credit, Protecting Minority Investors, Paying Taxes, Trading across Borders, Enforcing Contracts, Resolving Insolvency, 4. Global Innovation Index is a function of parameters such as ICT services exports, graduates in science and engineering, e-participation, presence of global R&D companies, government’s online service, general infrastructure, creative goods exports, knowledge impact, and intellectual property payments
  3. 3. 3 USA INDIA ISRAEL Source: Zinnov Research and Analysis The three nations display unique characteristics of Innovation USA: The Nucleus of ‘Breakthrough Innovation’ India: The Hub of ‘Frugal Innovation’ Israel: The of Center of ‘Sustainable Innovation’ Legend High Medium Low Innovation led by unique technological advances creating newer market categories or disrupting consumption patterns of existing products and services Innovation focused at substantial cost reduction while ensuring quality, concentration on core functionalities, and aligned to country-specific requirements and challenges Innovation led by sustainability considerations – esp. social needs and national security – integrated into the value chain from idea generation to R&D and commercialization Breakthrough Innovation Frugal Innovation Sustainable Innovation Innovation Types Rating of Countries across Innovation Types Innovation Entities Enterprises/ MNCs Academic Institutions Start-ups Government
  4. 4. 4Source: Federal Labs, Google Finance, Crunchbase Unicorn Leaderboards, Milken Institute Report, University Zinnov Research and Analysis Notes: 1. 2017, 2. Startup Genome 2017; 2. Market cap of all companies as on 11 January 2018 USA: The Nucleus of ‘Breakthrough Innovation’ Global Tech Titans Platform Centric Companies Deep-tech Defense/ Aviation • Combined market cap of $ 2.9T • World’s first ride sharing company launched in 2009 • Top unicorn with valuation of $ 69B • Introduced semi-autonomous ‘Autopilot’ feature in 2015 • Market cap of $ 58B greater than Ford ($ 52B) • Largest accommodation provider in the world • 5th largest unicorn with $ 31B valuation • 500 technologies licensed & 460 patents issued since 2014 along with 76 startups created from patented innovations Examples of Breakthrough Innovation2 Legend: Enterprises/ MNCs Start-ups Academic Institutions Government 50% of Forbes 100 most innovative companies1 50% of the Top 10 global start-up ecosystems are in USA2 49% Reuters 100 most innovative universities1 $ 152B Spend on R&D in FY 2017 Federal Budget • First successful Mars mission in 1964 by Mariner 4 spacecraft • Human Mars mission planned in 2030s • F117-Nighthawk, the first operational aircraft with modern stealth technology introduced in 1983 • Russian & Chinese modern stealth aircraft planned to be introduced only in 2018-19 $ 767B $ 677B $ 900B $ 545B
  5. 5. 5Source: NASSCOM-Zinnov Indian Start-up Ecosystem Report 2017, Atal Innovation Mission, Live Mint, Crunchbase Unicorn Leaderboards, Zinnov Research and Analysis Notes: 1. Includes analytics/ advanced analytics, artificial intelligence, IOT, AR/VR, robotics, 3D printing, blockchain India: The Hub of ‘Frugal Innovation’ Examples of Frugal Innovation 1200+ R&D centers setup by global MNCs 700+ Total number of advanced tech start-ups1 900+ Atal Tinkering Labs planned at schools to drive innovation ~$ 1.5B Total corpus of Startup India fund by government Legend: Enterprises/ MNCs Start-ups Academic Institutions Government Adaptive Innovation • Based on Amazon’s e-commerce model • 58% share of India’s e-tail market (GMV) • Largest Indian unicorn with $ 12B valuation • Based on Uber’s cab aggregator model • 0.5M drivers, and serving 102 Indian cities • 4th largest Indian unicorn with $ 6B valuation Aerospace/ Defense • Mangalyaan - 4th space agency to reach Mars at 1/10th the cost of NASA’s mission • World’s smallest satellite built by an Indian student, weighing just 100 grams KALAMSAT Inclusive Healthcare • Providing prosthetic limb at 1/40th cost compared to USA • 1.6M+ beneficiaries in over 26 countries Sustainable Agriculture • 50% reduction in pesticide usage by using pheromones- based traps to attract crop- damaging pests • Sprayers for improving farm mechanization which are 30% cheaper than sprayers from other countries Business Model Innovation Consumer-Tech • Disrupted telecom industry by offering free services for 1 year • Offers all domestic voice calls for free • Data tariff plans 30% lower than competitors • Reverse Innovation to innovate in India, & developing products for local market (such as portable ultrasound machine) • Natural refrigerator made entirely from clay which is ~50% cheaper than electric refrigerators (priced at $ 40)
  6. 6. 6Source: Economic Times, Forbes, Roland Berger, Zinnov Research and Analysis Notes: 1. Reuters 100 Most Innovative Universities 2017 Israel: The of Center of ‘Sustainable Innovation’ Examples of Sustainable Innovation Social Infrastructure Agriculture Water Power/ Energy • Reusable plastic trays to collect dew from air • Reduces water requirement for crops/ trees by up to 50% • Unconventional water sources to supply ~90% population • Allows 75% water to be reused (highest in the world) • Pioneered a technology to convert CO2 to fuels which is 10X more efficient that plant photosynthesis • Introduced first drip irrigation system which led to significant lowering of water consumption (considering that 60% of the country’s area is desert) • Harnessing water from air for citizens • Leveraged by Israeli army in remote areas & combat zones • System to produce energy from waste water using bacteria • 7,000 installations in more than 70 countries Security Infrastructure Cybersecurity Military/ Defense • IDF Unit 8200, a cyber security unit estimated to have produced 1000+ startups • Reported to have taken out Iranian nuclear centrifuges • Drone to evacuate wounded soldiers from battlefield • Capacity to carry 180 kgs for upto 2 hours at 120 kmph • In 2000, Israel became the only country with operational anti- missile system• Focus on taking down cyber threats • Used by over 50% of Fortune 100 companies 350+ R&D centers setup by global MNCs $ 10B Total value of start-up exits (2016) 13,500+ Patents by top innovative universities1 24 Technology Incubators setup by government Legend: Enterprises/ MNCs Start-ups Academic Institutions Government
  7. 7. 7 USA Japan Germany France United Kingdom INDIA Brazil Italy Canada South Korea Russia Australia Spain Mexico Indonesia Turkey Netherlands Switzerland Saudi Arabia 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 70,000 75,000 80,000 85,000 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Source: World Economic Outlook Database, Zinnov Research and Analysis Notes: 1. Excluding China USA and India: Conduits for targeting global opportunitiesGDPperCapita,CurrentPrices2017(in$) GDP, Current Prices 2017 (in $ B) Top 20 Global Economies Market Opportunities for Innovation USA: Gateway to Developed Markets INDIA-led Entry to Emerging Markets Emerging Economies Developed Economies A B China (High barriers to entry)
  8. 8. 8Sources: World Economic Outlook Database, Plunkett Research, Trading Economics, Health Affairs, YCharts, Tech Republic, IDC, Statista, Zinnov Research and Analysis Notes: All figures for 2017, 1. 2016, USA: Gateway to Developed Markets Immense Scale of Economy Large Size of Industries High Technology Adoption $ 19.4T $ 11.9T Country GDP, Current Prices Total Consumer Spending Total Government Expenditure Overall Value of Imports $ 6.9T $ 250B $ 5.7T $ 2.2T Total Retail Sales Manufacturing Contribution to GDP Overall Size of the Healthcare Industry Total Assets of US Banks $ 3.6T $ 17.2T $ 63B $ 77B R&D Spend of Software Companies1 Overall Public Cloud market SMB Market for Cloud Services Big Data and Business Analytics Market $ 31B $ 80B
  9. 9. 9 Large Scale Available for Businesses Challenges across Social Infrastructure Source: Worldometers, NCAER Report, Ministry of MSME-GOI, NASSCOM-Zinnov Indian Start-up Ecosystem Report 2017, News18, Bloomberg, NDTV, YourArticleLibrary, iTV Report, Zinnov Research and Analysis Notes: All Figures for 2017 India-led entry to Emerging Markets Education Water Power/ Energy Agriculture Healthcare 1.3B 287M Total Population of the Country Estimated Size of Indian Middle Class Number of Small and Medium Businesses (SMBs) Total Number of Tech Start-ups 55M 5000+ 60% 50M 76M 19% 698M Cropped area dependent on rain Rural homes don’t have power Don’t have access to safe drinking water Gross enrolment ratio (GER) - Higher education Population at risk for malaria
  10. 10. 10Source: Zinnov Research and Analysis Start-up led collaboration critical to unlock the massive opportunity Trilateral Collaboration A. Start-ups ⇄ Enterprises/ MNCs B. Start-ups ⇄ Government C. Start-ups ⇄ Start-ups/ Start-up Ecosystem D. Start-ups ⇄ Academic Institutions A B C Enterprises/ MNCs Academic InstitutionsGovernment Start-up Ecosystem ISRAEL INDIA USA 4 Entities of Innovation D New-age Collaboration Scenarios Government ⇄ Enterprises/ MNCs Government ⇄ Academic Institutions Government ⇄ Government Enterprises/ MNCs ⇄ Enterprises/ MNCs Enterprises/ MNCs ⇄ Academic Institutions Academic Institutions ⇄ Academic Institutions Traditional Collaboration Scenarios Legend: Traditional Collaboration New-age Collaboration
  11. 11. 11Source: NASSCOM-Zinnov Indian Start-up Ecosystem Report 2017; Notes: MAVERICKS – Evolved countries with mature start-up ecosystem; EMERGENTS – Countries where start-up ecosystem is evolving at a rapid pace aided by increasing investments, govt initiatives, etc.; ASPIRANTS – Countries where start-up ecosystem is beginning to grow; however, lacks in terms of enablers such as investments, govt. Initiatives, etc. Rapid acceleration of start-up ecosystems in India and Israel Start-up Activity Index = f [Landscape (Total Start-ups, Start-up Per Capita, Acquisitions), Unicorns Analysis, Investors Ecosystem & Funding, Advanced Tech Focus] LowestRating Highest RatingLowest Rating HighestRatingGovt. Focus & Country Specific Indices = f [Government Initiatives (Govt. Policies, Govt. Funding), Country Specific Indices (Global Innovation Index, Ease of Doing Business)] *Size of the bubble represents the total number of start-ups in the country India Israel MAVERICKSEMERGENTSASPIRANTS United States of America• Good progress in govt. initiatives, requires improvement in global indices • 2nd highest average Unicorn valuation led by Flipkart • Top geo for overall start-up base and highest number of unicorns • Most active investor ecosystem • Highest number of start-ups per capita • Highest % of Advanced Tech start-ups Global Start-up Comparison Framework
  12. 12. 12 Source: Economic Times, Live Mint, Reuters, University Website, OurCrowd Press Release, No Camels Website, Zinnov Research and Analysis Notes: TIM - Technology Innovation Momentum A. Collaboration: Start-ups ⇄ Enterprises/ MNCs A.Enterprises/MNCsB.GovernmentC.Start-ups/Start-upEcosystemD.AcademicInstitutions USA Enterprises/ MNCs – Start-up Collaboration INDIA Enterprises/ MNCs – Start-up Collaboration Deep-tech Aerospace/ Defense Invested $ 5M in the Israeli wireless charging start-up Acquired for chip development capabilities for $ 320M Acquired for AI-related capabilities; 16 member team Boeing HorizonX India Innovation Challenge in collaboration with T-Hub in areas of autonomous, unmanned systems & AI Acquired for their capabilities on building machine learning systems Social Infrastructure Aerospace/ Defense Targeting Israeli start-ups focused on areas such as clean-tech, water- tech and fintech Invested in Tel Aviv University’s TIM Fund, to drive innovation in areas like cleantech, healthcare, pharma, etc. Jointly pursue contracts with Israeli aerospace and defense companies with offset obligations in India Deep-tech Plans to setup a technology incubator in Jerusalem in collaboration with Hebrew University and Motorola Solutions
  13. 13. 13 Sustainable Innovation Water Conservation Accelerator supported by Florida government with Israeli startup in the areas of security, transportation, agriculture, food, etc. Indian startup with products for waterless bathing selected by US government incubator, Nexus Cybersecurity US Department of Homeland Security and the White House to explore partnerships with Israel start-ups Source: Times of India, Times of Israel, Horti Daily, Aqwise Press Release, Business Standard, Bloomberg Quint, Hindu Businessline, Zinnov Research and Analysis Notes: NCIPM - National Centre for Integrated Pest Management, NRCG – National Research Centre for Grapes B. Collaboration: Start-ups ⇄ Governments USA Government – Start-up Collaboration ISRAEL Government – Start-up Collaboration Digital Citizen Services Aerospace and Defense Offered solution to Israeli Chamber of Commerce that allows e-sharing of documents for visa application Israel Aerospace Industries that supplies missile systems, etc. is looking to engage with Indian start-ups in aviation and defense INDIA Government – Start-up Collaboration Agricultural Technology Sustainable Water Bio-Bee Biological Systems collaborating with NCIPM and NRCG for launching its pest management products in India Water treatment plant supplying drinking water to city of Agra through release of polyethylene biofilm carriers into water Defense and Security Providing solutions for India’s smart border management initiative in partnership with India’s Dynamatic Technologies CleanLife Products A.Enterprises/MNCsB.GovernmentC.Start-ups/Start-upEcosystemD.AcademicInstitutions
  14. 14. 14Source: Live Mint, WhartonIndia Website, OurCrowd Press Release, Business Wire, NeuroLaunch Website, Economic Times, Your Story, Zinnov Research and Analysis Notes: DST – Department of Science and Technology (Government of India), IIFA - Israel-India Friendship Association C. Collaboration: Start-ups ⇄ Start-ups/ Start-up Ecosystem Start-up Funding Innovation Challenges/ Hackathons Incubation/ Accelerator Collaboration Start-up Partnerships/ Acquisitions USA INDIA ISRAEL Set up operations in Israel partnering with Israel-India Chamber of Commerce and IIFA Mobileye’s accident-preventing tech installed in over 10,000 Zoomcar vehicles Setting up first Indo-Israeli Innovation Accelerator in India leveraging expertise of Tal Caltran (TC Holdings) • Competition to promote entrepreneurship at global level • 2 Indian startups in top 10 startups that take part in Israel US Trek, a curated business trip VC fund access for Indian investors on OurCrowd platform allowing investment in Israel's startup ecosystem Partnership to expand Zebra’s solution to 20+ countries and 150 healthcare organizations Partnership for investment, innovation, and dialogue between U.S. & Israeli entrepreneurs across neuroscience/ neurotechnology • Start-up challenge organized by Embassy of Israel collaborating with DST • 5 Indian startups awarded access to startup incubators by the DST; Indian winner to travel to Israel Co-founded a $ 300M VC fund in partnership with Ratan Tata for Indian start-ups Acquired to support in building of large scale infrastructure and services Joint venture with ANSR Consulting to launch incubation/ accelerator programs in India Start-up challenge with emerging startups and investors organized by Wharton School at the University of Pennsylvania A.Enterprises/MNCsB.GovernmentC.Start-ups/Start-upEcosystemD.AcademicInstitutions FinitePaths
  15. 15. 15 MIT-IIT Make In India, a boot camp on social innovation and entrepreneurship at IIT-D campus with students from MIT for development of prototypes and business pitches Source: Business Insider, India Today, Business Standard, Start-up Hyderabad, Israel21c, Press Releases, University Websites D. Collaboration: Start-ups ⇄ Academic Institutions Collaboration with Wyss Institute for Biologically Inspired Engineering to develop and license lightweight exoskeleton technologies enabling people to walk • MIT Global Startup Workshop (2016) organized in Hyderabad targeted at Indian start-ups • Participants from 70 nations since inception • Started a 10-week certificate program aimed at entrepreneurs from the Indian startup ecosystem • Provided guidance to 200 innovators till date USA Academic Institutions – Start-up Collaboration ISRAEL Academic Institutions – Start- up Collaboration Partnership with International Centre for Entrepreneurship and Technology (iCreate) of India to jointly incubate few start-ups from both countries Strategic partnership to establish startup accelerator, Pinnacle Capsula.Studio in Pune INDIA Academic Institutions – Start-up Collaboration A.Enterprises/MNCsB.GovernmentC.Start-ups/Start-upEcosystemD.AcademicInstitutions Israel Centre setup at IIM-B focused on business relationships in domains of start-ups, innovation and scaling companies
  16. 16. 16 In Summary Trilateral collaboration between USA-India- Israel can unlock significant potential Rapid growth of startup ecosystems in the 3 nations emerges as a driving force for collaboration Encouraging early signals of bilateral collaboration to accelerate innovation
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