The Next Tech Wave In India Will Be Urbantech Even after the pandemic is a thing of the past, the urbantech industry in India is anticipated to grow exponentially to match the global pace of innovation and investment in this sector
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COVID-19 was an unprecedented global health crisis which caught countries off-guard and played havoc with economies across the world. At the same time, the pandemic boosted growth in certain sectors that had been lagging in innovation but were critical to the safety and sustainability of people's lives across the world. In India in particular, the state of our cities was thrown into the spotlight by challenges brought on by rules imposing social distancing and in crowded areas, impact of human activity on the environment, expectations of personal health and hygiene in poor communities, requirements of internet connectivity in working from home, and the migrant labor crises.
Necessity is the mother of invention, or at least an impetus for it. These issues have provided the necessary momentum to startups in the urban technology, or urbantech, space, which are working on a range of solutions focused on solving the problems faced in urban India. Even after the pandemic is a thing of the past, the urbantech industry in India is anticipated to grow exponentially to match the global pace of innovation and investment in this sector.
What's the buzz about?
Urbantech solutions refer to enhancing a city to make it smarter, more sustainable, and more responsive through a range of tech-enabled products and services. Solutions can be made for citizens, businesses, or governments, and in many cases benefit more than one stakeholder at a time, enabling each to live, work, and fulfill their responsibility. Urbantech can thus be viewed through the categories of mobility, real estate, energy, health and hygiene, and governance, while solutions can employ a range of technology applications including 5G, big data and Internet-of-Things (IoT), artificial intelligence (AI), automation and robotics, and augmented reality and virtual reality (AR/VR).
With nearly 17 per cent of global venture capital investment going into urbantech, the $75 billion industry is anticipated to make it bigger by the day. India, often called the fastest-growing tech hub in the world, is seeing growth of this industry at a CAGR of 10.71 per cent. As per a report by Indian Brand Equity Foundation, the urbantech market in India is expected to reach $350 billion by 2025. Additionally, the government's Smart Cities Mission, Swachh Bharat Mission, Jal Jeevan Mission and other policies encouraging clean energy are providing the necessary backing and impetus to the sector.
India's Smart City Mission
In 2010, China's metropolitan-dwelling populace outnumbered its rural populace; the country is home to 6 megacities, with another 3 metropolitan zones growing in number. India, which as of now has 53 urban areas with a population of more than 1 million seems to be following a similar growth path. By 2030, urban centers in India are estimated to house nearly 40 per cent of the country's populace and add to 70 per cent of the nation's GDP. To prepare for a technologically equipped and advanced India, the priority of the central and state governments remains the renewal and retro-fitting of clean, efficient, and data-driven Smart Cities.
To steer the economic success of the country and improve quality of life of the citizenry, the government of India launched the Smart Cities Mission in 2015. The aim of the mission is to develop an area within each of the selected cities as a model for the rest of the city as well as other cities where the model can be contextualized for success. The Indian government has invested over INR 2,05,000 crore ($21.8 billion) through 5,151 projects in the Smart Cities Mission till date, with 896 projects amounting to INR 15,000 crore ($2.06 billion) already completed, and another 1,895 projects worth INR 75,000 crore ($10.3 billion) currently in progress.
Additionally, the ministry of housing and urban affairs has built an economic assessment framework for Indian cities to analyse and rate themselves on some key parameters, including livability (quality of life and access to water, sanitation, mobility, etc.), economic ability (ability to generate revenue), and sustainability (quality of air, green spaces, etc.). This framework encourages urban local bodies and state governments to make evidence-based decisions, while also providing exciting opportunities for startups to collaborate with the government to collect, analyze, and manage this data using cutting-edge technologies and benefit all stakeholders in the process.
Investing the right way
Currently, India ranks third in the world in drawing investments for start-ups in the urbantech ecosystem, with the greatest growth seen in the smart and clean mobility sector, which saw a 1,277 per cent growth in investment between 2017 and 2018 alone. With venture capitalists supporting urbantech startups that are solving for the challenges faced by citizens, businesses, and governments in our urban centers, the Indian urbantech market is expected to maintain its upward trajectory of growth and contribute to the shared goals of improved quality of life for the citizens of the country.
