Building an Entrepreneurial Ecosystem for Tech Start-Ups a CASE STUDY of the ROLE PLAYED by a PRIVATE UNIVERSITY

Building an Entrepreneurial Ecosystem for Tech Start-ups A CASE STUDY OF THE ROLE PLAYED BY A PRIVATE UNIVERSITY

university) overcome the multiple chal- M H Bala Subrahmanya*, H S Krishna and lenges towards creating a nascent eco- K N Krishnaswamy system for tech start-ups in a Tier 2 city Department of Management Studies, Indian Institute of Science, through the establishment of a TBI is Bangalore-560012, India interesting to examine and analyze. This *E-mail: [email protected] is done by means of an exploratory case study for KLE Technological University Abstract (which was earlier known as BVB College of Engineering) in Hubli, Karnataka. The promotion of entrepreneurial ecosystems for tech start-ups through policy initia- A case study is an empirical inquiry tives is a recent development in India. As of now, tech start-up hubs are predominantly that investigates a contemporary phe- confined to Tier-1 cities, particularly Bangalore, National Capital Region (NCR) Delhi, Mumbai, Hyderabad, Chennai and Pune, and the emergence of tech start-ups in Tier-2 nomenon within its real life context, and cities is an exception than a rule. This is primarily due to the absence of a conducive relies on multiple sources of evidence (Yin, entrepreneurial ecosystem for nurturing tech start-ups. However, a private technologic- 2014). A case study is a complete analysis of al university in a Tier-2 city (Hubli) in Karnataka has slowly but steadily taken exceptional an individual subject with respect to spe- leadership initiatives towards the building up of a nascent ecosystem for generating cific phases of its totality (Krishnaswamy tech start-ups. How did this happen? What results did it yield so far? Given the current et al., 2006). The advantage in using case scenario, what prospects does the ecosystem have for the future? This article explores studies as a method of business research and throws light on these issues. is that they offer rich and reliable results due to the combination of both quanti- Introduction sponsored and promoted by academic tative and qualitative data collection and institutions/universities, mostly in fairly analysis methods and the triangulation of niversity promoted incubation to information from multiple sources (Rob- well-developed technology/innovation assist the growth of spin-off firms son, 1993). U clusters which has a strong base of univer- through a dedicated facility providing sity research (Mian et al, 2016). However, subsidized space, consultation and other Role of academic institutions they can also be found in institutions that services and support to encourage tech- and TBIs in an ecosystem for do not perform basic research, but which nology entrepreneurship is a noted world- tech start-ups: A review of wide phenomenon (Etzkowitz, 2002). This have strong links with the infrastructure literature of science and technology and the com- is done through, what is commonly known The creation, sustenance and growth of mercialization of technologies (Breschi as, Technology Business Incubators (here- a tech start-up involve a considerable de- and Lissoni, 2001). after TBIs). In fact, universities constitute gree of uncertainty and challenge to its one of the Triple Helices and TBIs form But, in an emerging economy, particu- founders/promoters, due to three import- one of the indispensable components of larly in a city, which has the presence of ant factors, which are as follows: an entrepreneurial ecosystem for technol- neither a well-developed entrepreneurial (i) These tech start-ups are unfamiliar ogy based start-ups (Bala Subrahmanya, ecosystem nor a strong university research and without precedence and there- 2017a). TBIs provide a mechanism for tech- base, initiating a TBI and thereby driving fore suffer from the liability of new- nology transfer and commercialization for the creation of an entrepreneurial eco- ness; new venture creation (Wonglimpiyarat, system for technology based start-ups (ii) They are generally created on a small 2014). Over a period of time, they have be- is quite a challenge. The hurdles to bring scale with limited resources; and come one of the most successful tools to together the ecosystem components for (iii) They often, directly or indirectly, face mentor start-up ventures (Jordan, 2010). enabling ideation, commercialization of established competitors, powerful Today, TBIs are present in many parts innovations and technology transfer for suppliers, sceptic customers and hesi- of the world that facilitate development creating tech start-ups will be numerous tant financiers. of regional innovations through industry- and daunting, to say the least. Given this, Given their limited internal resources and institute interactions (Thursby and Kemp, how did a private engineering institu- strength, they tend to depend on the local 2002). More often than not, TBIs are tion (which later became a full-fledged environment for critical resources which

TECH MONITOR • Apr-Jun 2018 39 Building an entrepreneurial ecosystem for tech start-ups are essential to sustain their operations There are two unique entrepreneur- ecosystem for the benefit of tech (Romanelli and Schoonhoven, 2001; Bala ial ecosystems for tech start-ups in the start-ups. Subrahmanya, 2015). Start-ups which are global economy which are often cited as promoted in a structured and vibrant entre- the benchmarks, namely, Silicon Valley The above discussion enables one to preneurial ecosystem have higher chances of and Israel. Both have generated more suc- understand that entrepreneurial ecosys- success compared to the rest, because such cessful start-ups than other nations could tems are crucial for nurturing tech start- ecosystems have a positive impact on start- create in years or decades, and they are ups, and these ecosystems can be defined up fertility, stability and growth (Arruda et al., not identical but distinct in their respec- in terms of certain common components 2013; Cukier, 2016). A strong entrepreneurial tive ambiences (Arruda et al., 2013). This and their functions. Further, an ecosystem ecosystem in a region will have the ability brings out that different nations with is dynamic in nature as it can be nurtured/ to promote technological innovations and different economic environments, can developed in a region, over a period of development of business environment for build their own entrepreneurial ecosys- time. Given this, it is appropriate to know the growth of tech start-ups in that region, tems to nurture successful tech start-ups. the key elements which can drive the crea- which in turn, would promote employment There is no exact formula for creating an tion/development of an entrepreneurial generation and national income in an econ- ecosystem, but there are only practical, ecosystem in a region. omy (Krajcik and Formanek, 2015). Due to though imperfect, road maps (Isenberg, There are nine core issues concerning these reasons, policy makers in the world’s 2011). This implies that it is not possible an entrepreneurial ecosystem for tech most dynamic areas explicitly focus on to replicate either a Silicon Valley or an start-ups, which are as follows: (i) sources of promoting entrepreneurial ecosystems for Israel, rather what is significant is to iden- entrepreneurship, (ii) finance, (iii) market, start-ups (Manzella, 2015). tify and promote the key bench mark ele- (iv) human resources, (v) support structure Though several empirical studies have ments of an ecosystem for nurturing tech (including accelerator/TBIs/proof of con- defined entrepreneurial ecosystems for start-ups. cept centres/prototype/product develop- start-ups in different ways, there are found It is equally important to note that ment & testing centres), (vi) business & to be some common components which entrepreneurial ecosystem for tech start- technology mentorship, (vii) policy, (viii) are interlinked with one another in the ups is dynamic in nature. Ecosystems culture, and (ix) media. These nine core process of start-up creation, sustenance change from time to time, in terms of issues are provided or promoted by one and growth. In a broad sense, an ecosys- people, organizations and environments. or more of the four key elements, namely, tem for start-ups is defined as a set of inter- This could be due to differential-talent (i) large companies (domestic as well as connected entrepreneurs (both potential pool, resource base, cultural attitude and foreign), (ii) tech start-ups (in different and existing), entrepreneurial organiza- support structure, created/emerged over stages of their lifecycle), (iii) education & tions (e.g., firms, venture capitalists, angel a period of time. Further, the introduc- research institutions, and (iv) governments investors, banks), institutions (such as uni- tion of non-native people, knowledge (regional and national) (Figure 1) (Bala Sub- versities, public sector organizations, and and skills can cause substantial shifts in rahmanya, 2017a). The four key elements financial agencies), and entrepreneurial the ecosystem functions (Isenberg, 2011). broadly fall under (i) Government (G), (ii) processes (consisting of business births, This enables us to derive three inferences, Academia (A), and (iii) Industry (I), which number of high growth firms, levels of which are as follows: constitute the Triple Helix model, as origi- ‘blockbuster entrepreneurship’, number nally proposed by Etzkowitz (2003). of serial entrepreneurs, degree of sell-out (i) Even within a country where start-ups It is this Triple Helix and its interactions mentality within firms and levels of entre- are subjected to the same macroeco- which form the base or support structure preneurial ambition) which formally or nomic policy environment, entrepre- for an entrepreneurial ecosystem. Within informally consolidate to connect, medi- neurial ecosystems in two different the Triple Helix model, an entrepreneur- ate and govern the performance within regions are unlikely to be similar; ial ecosystem would comprise a nucleus a local entrepreneurial environment (ii) The spontaneous or induced influx of consisting of tech start-up and prospective (Mason and Brown, 2013). Thus, a start- non-native people with knowledge tech start-up entrepreneurs, with two outer up ecosystem comprises entrepreneurs, and skills, resulting in cross-cultural layers. The first outer layer will include indis- different kinds of financial support such migration, would facilitate an entre- pensable (primary) components consisting as debt finance, equity investments and preneurial ecosystem to experience of (i) sources of finance such as seed funds, grants, non-financial support in the form substantial improvements; and angels, venture capitalists, private equities of incubation, acceleration support, men- (iii) Where there is hardly any presence of and investment banks, (ii) market, (iii) human toring and technical experts. In addition, an identifiable entrepreneurial eco- resources, (iv) support system comprising it includes government policies and pro- system, internal initiative or external accelerators, TBIs, co-working spaces, com- grammes relevant to start-ups, academia intervention or both can lead to a slow mon facility centres, common technology and other organizations which in different and steady emergence of ecosystem platforms/laboratories, and (v) business and ways interact with start-ups (CII, 2015). components thereby cultivating an technology mentors. The second and outer

40 TECH MONITOR • Apr-Jun 2018 Building an entrepreneurial ecosystem for tech start-ups most layer will comprise supplementary (Bala Subrahmanya, 2017a). A typical struc- enter into a reciprocal relationship with components such as (i) supportive local culture of an entrepreneurial ecosystem for each other in which each helps to enhance ture, and (ii) supportive media. The primary tech start-ups feasible in the Indian context, the performance of the other. Most such components are those without which an as defined by Bala Subrahmanya (2017a), is initiatives take place at the regional level ecosystem will not emerge or sustain or be given in Figure 2. where specific contexts of industrial clus- effective, whereas secondary components A triple helix interaction typically starts ters, academic development and pres- are those which play only a supportive role as university, industry and government ence of governing authority influence the development of the triple helix (Etzkow- itz, 2007). It is the triple helix interactions which generate or influence the primary LargeFirms(Domestic /MNCs) and the secondary components of an Provide / Influence 1 , 2 , 3 , 4 , 5 , 6 , 8 , 9 entrepreneurial ecosystem in a region (Bala Subrahmanya, 2017a). Sourcesof Supportive Entrepreneurship Media The triple helix interactions driven by 9 1 Conducive public policy initiatives leading to the Culture Tech Start-ups and Finance Educational 8 2 emergence and growth of an entrepre- Government ProspectiveTech andResearch Provide/ Start-ups Institutes neurial ecosystem for tech start-ups over a Influence Provide/ Provide / Policy Influence period of about six decades, is empirically 2 , 3 , 5 , 6 , Market Influence 7 1 , 2 , 3 , 4 , 2 7 , 8 , 9 3 1 , , 3 , 4 , 5 , illustrated by Bala Subrahmanya (2017b) in 6 8 , 9 , 6 , 8 , 9 the context of Bangalore and Hyderabad. Human Mentorship Support Public policy initiatives laid the foundation Structure Resources 6 5 4 for the creation of academic institutions, public sector enterprises, and public R&D institutions which led to the creation of a modern industrial cluster in Bangalore by the mid-1980s. Subsequently, it was the entry and growth of MNCs in the IT and Source: Bala Subrahmanya (2017a) BT sectors followed by an increasing entry Figure 1: Entrepreneurial ecosystem for tech start-ups – core issues and of MNC R&D affiliates (both in response supportive elements to steady economic policy liberalizations) which created the IT/BT industries cluster by the late 1990s/mid-2000s followed by an R&D centres’ cluster by mid-2000s/late 2000s. These three clusters, with the aid of

Industry Government (G), Academia (A) and Indus- try (I) together played a decisive role in the gradual emergence and growth of different components of an entrepreneurial SuSu urure ecosystem for tech start-ups in Bangalore Indispensable (Primary) Factors as well as Hyderabad (Bala Subrahmanya,

Finance Market 2017b).

Tech Start-ups However, the challenge of develop- M and ent n es Prospective a ing an entrepreneurial ecosystem takes a o rc r m ship Start-ups Hu esou different dimension, in a tier 2 city in an R Support emerging economy, particularly when: Systems

Academia Government Media (i) it is away from the regional government (G); (ii) it has no significant research base gen- Interactions erated from the presence of research intensive public/private universities or Source: Bala Subrahmanya (2017a) public R&D institutions (A); and Figure 2: Entrepreneurial ecosystem for tech startups in India: structure (iii) it has no significant presence of large and components scale industries, particularly MNCs (I).

TECH MONITOR • Apr-Jun 2018 41 Building an entrepreneurial ecosystem for tech start-ups

This is a situation where Triple Helix base Bangalore, the capital of Karnataka state centre and currently 30 companies are is largely absent. How could an entrepre- and 550 km south-east of Mumbai. under incubation there (STPI, 2017). Thus, neurial ecosystem be promoted to nurture The district has a moderate con- a drive to facilitate the growth of IT indus- tech start-ups in such a region? Who has to centration of manufacturing industries in the city has been initiated. take the initiative? What course of action tries spread over eight industrial areas, Hubli-Dharwad is the educational hub is appropriate? How effective will be such namely, (i) Belur Industrial Area, (ii) of northern Karnataka. The twin-cities have an ecosystem, if at all, developed? Empiri- Rayapur Industrial Area, (iii) Tarihal four universities, namely, (i) Karnataka Uni- cal literature has hardly addressed this Industrial Area, (iv) Lakkamanahalli versity, Dharwad, (ii) University of Agricul- research question, which is of relevance to Industrial Area, (v) Sattur Industrial Area, tural Sciences, Dharwad, (iii) Karnataka all emerging economies, particularly India, (vi) Gamanagatti Industrial Area, (vii) State Law University, Hubli, and (iv) KLE in the current context. The present study is Gokul Industrial Area, and (viii) Mummi- Technological University, Hubli, the last undertaken to address this research gap. gatti & Narendra Industrial Area (KIADB, being the youngest and the only private 2017). The district has a total of about technological university in the region. In Objectives, scope and 19,000 industrial enterprises, of which addition, an Indian Institute of Information methodology 924 are registered industrial enterprises Technology (IIIT), as an autonomous insti- The present study has two research objec- comprising six large and six medium tute setup by Government of India (MHRD), tives: enterprises, the remaining being small Government of Karnataka and Industry scale and micro enterprises (MSMEDI, Partners (represented by KEONICS) as a  How could a private technological uni- 2017). It is important to note that not not-for-profit Public Private Partnership versity initiate the building up of an even a single foreign MNC operates out (N-PPP) Society, was established in 2015. entrepreneurial ecosystem in a region, of Hubli-Dharwad, as of now. This is intended to be a world-class Informa- which is bereft of a Triple Helix base? In the recent years, several initiatives tion Technology Institute with the objective  What are the key achievements of such have been taken to promote IT industry of developing professional expertise and to an initiative, and what promise does it in the region, both in terms of infrastruc- address the increasing skill challenges of hold for the future? ture and academia. The Government of Indian IT industry (IIITD, 2017). Karnataka through Karnataka Electron- More recently, an Indian Institute The study is primarily confined to ics Development Corporation (KEONICS) of Technology (IIT), as an autonomous exploring the role played by KLE Tech- is setting up an exclusive IT Park in Hubli premier engineering and technology nological University in developing a tech (KEONICS, 2017). A Software Technology university under the Ministry of Human start-up ecosystem in Hubli, officially Park of India (STPI), set up by the Govern- Resource Development, Government known as Hubballi, which is the second ment of India, has been operational since of India, was set up in Dharwad in July largest city (next to Bangalore) in Karna- May 2001, which has its own incubation 2016 (IITD, 2017). Thus, both industry and taka state. Hubli forms continuous urban area with the city of Dharwad. Hubli- Dharwad is the largest conurbation in the state after the capital city of the state, i.e., Bangalore, in terms of geographical coverage and population. Hubli is located in Dharwad district, which is situated in the western sector of the northern half of Kar- nataka State. The district encompasses an area of 4260 km2 lying between the latitu- dinal parallels of 15°02’ and 15°42’ North and longitudes of 73°43’ and 75°33’ East. The most conspicuous contour lines of very high and very low areas of the district are located 500 and 700 metres above the mean sea level, respectively. The district is bound by Belgaum in the north, Haveri in the south, Gadag in the east and in the southwest by Uttara Kannada district (Census of India, 2014) (Figure 3). The twin cities of Hubli-Dharwad are located at a distance of around 420 km north-west of Figure 3: Dharwad district in Karnataka, India

42 TECH MONITOR • Apr-Jun 2018 Building an entrepreneurial ecosystem for tech start-ups academic institutions have yet to make its curriculum and student experience ii. C M Patil, Chief Executive, Sandbox a mark in the knowledge and technol- (KLE-TU, 2017). Startups, Start-ups Incubation Centre; ogy intensive industries, on the map of In the ever-dynamic global economy, iii. Four start-ups which originated and Hubli-Dharwad twin cities, to attract any apart from delivering good quality edu- operating out of Sandbox Startups; national attention. cation, the engineering institutions are iv. Vivek Pawar, CEO, Sankalp Semi- Obviously, there was hardly any tech expected to develop their capacity in Conductors; start-up that emerged and was operating research and innovation. They also need v. Nitin Kulkarni, Director, KLE Centre for out of Hubli about a decade back, and to undergo a fundamental transformation Technological Innovation and Entre- therefore, there was neither any venture in terms of their role in the society, mode of preneurship (KLE-CTiE), KLE-TU; capital fund nor any TBI or Accelerator or operation, and economic structure and the vi. Three tech start-ups, which originated Co-working space based out of Hubli (as scale at which they operate. To respond to and operating out of KLE-TU TBI; and ascertained from multiple sources). The these challenges, BVB College of Engineer- vii. Ashok Shettar, Vice Chancellor and Pro- market base in terms of technology inten- ing and Technology undertook a strategic fessor, KLE-TU. sive industrial enterprises was absent and initiative of transforming itself into a Uni- In addition, we scanned for, gathered tech savvy consumers might have been versity of national distinction. In 2014, BVB and reviewed secondary data relating to very limited, to say the least. The engineer- college was recognized as a state private general profiles, education institutions ing graduates, who emerged out of the University by the Government of Karnataka. and industrial concentration of Hubli- engineering colleges in Hubli-Dharwad Since then, it has embarked on several new Dharwad district as well as business news cities largely migrated to Bangalore and initiatives towards nurturing entrepreneur- items published in print media on tech Mumbai in search of jobs. Given all this, the ship through promoting industry-institute start-up initiatives in Hubli. This formed scope for the prevalence of business and interactions, on the one hand, and setting the basis for our case description, case technology mentors was practically nil. All up a TBI, on the other (KLE-TU, 2017). analysis and discussion, inferences and these indicate the absence of a start-up The case of KLE-TU in Hubli attracted conclusions. conducive culture as well as a supportive our attention because recently we heard media. This brings out that an ecosystem frequent references to KLE-TU in the Ban- The driving role of KLE-TU in for tech start-ups [characterized by a Triple galore ecosystem for tech start-ups, due to creating an entrepreneurial Helix base, with a nucleus surrounded by (i) the former’s noticeable performance in ecosystem for tech start-ups in two outer layers consisting of five primary/ tech start-up generation, and (ii) migration indispensable components and two sec- of tech start-ups from Hubli in search of a Hubli: A case study ondary/supplementary components (as larger market for stability and growth to If entrepreneurship has to increasingly discussed earlier)] was non-existent in Bangalore and elsewhere. Since we had blossom in a particular location, the pre- Hubli. previous interactions with KLE-TU through requisites are: (i) presence of an adequate Given the above, a description on KLE S V Patil, Professor and Head, Department industrial ecosystem, (ii) visibility of the Technological University (hereafter KLE- of Management Studies, we approached location, with adequate industrial infra- TU) is in order. The origin of KLE-TU can him to obtain some preliminary informa- structure, and (iii) willingness of industrial be traced back to 1947 when Karnataka tion and to schedule personal interviews enterprises, located elsewhere, to col- Lingayat Education (KLE) Society, Belgaum with the key personalities in KLE-TU and laborate with local institutions. However, established B V Bhoomaraddi College of other relevant ecosystem stakeholders, on Hubli, as a location, did not have any of Engineering and Technology with an aspi- mutually convenient dates. Accordingly, these, as recently as about a decade ration of creating an institution that would based on the advice and help of S V Patil, back. As a result, leave alone attracting lay the foundation of modern engineering authors scheduled a visit to Hubli on 29th entrepreneurship, even the engineering education in northern region of Karnataka. and 30th May 2017. graduates who emerged out of KLE-TU Over the years, it evolved to reach and hold To understand and analyze the role migrated to large cities such as Bangalore a unique position of pride in the technical played by KLE-TU through the promo- and Mumbai, in search of employment education system of the state. According tion of industry-institute interactions and opportunities. This hardly gave scope for to one source, KLT TU was ranked 12th establishment and operations of a TBI for the emergence of local entrepreneurship among all the engineering institutions in promoting technology entrepreneurship and thereby deprived nurturing of local the State of Karnataka in 2016 (Career360, led start-ups, we visited Hubli and carried competitiveness. 2017). In pursuit of academic excellence, out day-long intensive consultations and Therefore, the challenge facing KLE- the BVB College attained academic auton- interactions on 29th and 30th May 2017, TU was crystal clear: apart from playing omy from the University Grants Commis- with the following: the traditional roles of (i) human resource sion (UGC) in the year 2007, which enabled development through knowledge trans- the institution to establish its distinctive i. Naveen Jha, CEO, Deshpande Centre fer, and (ii) knowledge generation through character in the academic space through for Social Entrepreneurship, KLE-TU; R&D, it had the responsibility of driving

TECH MONITOR • Apr-Jun 2018 43 Building an entrepreneurial ecosystem for tech start-ups regional economic and social develop- of several companies including Cascade  Prospective entrepreneurs for incu- ment. With no significant presence of Communications, Sycamore Networks, bation are short-listed based on their regional government (G) and large scale Coral Networks, Tejas Networks, Cimaron, ability to conceptualize the ideas and industries (I), to drive the Triple Helix base, Webdialogs, Airvana, Sandstone Capital, the identification of target markets. In as a representative of Academia (A), KLE- A123 Systems and Curata (Deshpande addition, the background of promoters TU under the leadership of its Vice Chan- Foundation, 2017). and team composition played a crucial cellor, Ashok Shettar, decided to take the Gururaj Deshpande and Jaishree role. lead role in the beginning of the current Deshpande have encouraged the use  The short-listed prospective start-up decade. of entrepreneurship and innovation as funders are invited to visit Deshpande However, in the absence of a clear catalysts for sustainable change in the Centre to make a presentation and for role model visible in the context of Indian United States, India and Canada since an interaction. The final selection of higher education institutions, KLE-TU 1996. The Deshpande Foundation India prospective start-ups is made based looked up at the Massachusetts Institute was established in 1996, as a part of the on their suitability and ability to get of Technology (MIT) and its impact on global philanthropic pursuits of Desh- accommodated in the TBI ecosystem. the regional economy, as brought out by pande Foundation, which launched one of the reports of Kauffman Founda- Facilitated the location of large scale Hubballi Sandbox in 2007. “The aim of tion. To foster, enable and grow the inno- Private Enterprises in-house the Sandbox is to create an environment vation and entrepreneurial ecosystem, KLE-TU felt the need for the location of where unconventional approaches to KLE-TU founded Centre for Technology private enterprises within the campus. addressing social innovation is encour- Innovation & Entrepreneurship (KLE - Accordingly, it facilitated the in-campus aged. The value of the Sandbox lies in its CTiE), informally in February 2012. It got birth and growth of four private enter- ability to identify synergies and explore official recognition from the Department prises, namely, (i) Sankalp Semi-conduc- of Science and Technology, Government potential collaborations among the cat- tors (hereafter SS), (ii) Navya Biologicals, of India, New Delhi in February 2016. KLE alyst network” (Deshpande Foundation, (iii) Athena composites, (iv) Hi-Wi Com- – CTiE adopted a two-pronged strategy 2017). Applying a ‘bottom-up’ approach munication (GDV), by creating the right to build an entrepreneurial ecosystem, to to build scalable solutions, the Desh- value propositions in terms of (i) provid- (i) attract and support external entrepre- pande Foundation India – Hubli Sandbox ing working space, (ii) support facilities, neurs, and (ii) inspire, educate and enable works to create an effective ecosystem and (iii) start-up - student/faculty synergy. student start-ups. Let us first examine how where resources are put to use through The objective was to have anchor entre- were the external entrepreneurs attracted entrepreneurship, innovation and sus- preneurs on the campus who can develop and supported to emerge from Hubli. tainability. The Hubli Sandbox engages synergy with the faculty and students for with not-for-profits, academics, organi- mutual advantage. Developing external support for the zations and entrepreneurs leading to the Of the four, a reference to the birth ecosystem launch of effective and scalable models and growth of SS in KLE-TU is in order. SS Deshpande Foundation India of development. is an advanced technology services pro- The roping in of Deshpande Foundation It has adopted three distinct vider offering comprehensive solutions of Gururaj Deshpande and Jaishree Desh- approaches for the creation of entrepre- from concept to prototype, in the semi- pande (who hail from Hubli but attained neurship and start-ups, namely: conductor space. It offers an integrated global reputation through their outstand- portfolio of services to their clients in key ing professional achievements in the IT (i) Sandbox Action Partnerships; domains including digital, analog, high industry in the USA) as an external sup- (ii) Inculcating Leadership among Com- speed physical interface IP, Embedded porter for entrepreneurship promotion munities; and Memory Compiler and EDA modelling by KLE-TU was one of the first major steps (iii) Building Entrepreneurs through Edu- (Sankalp Semiconductors, 2017). The taken by KLE-TU. Gururaj, an alumnus of cation and Mentorship. CEO of SS, Vivek Pawar was an employee IIT Madras, was the Co-chair of a Nation- of Texas Instruments (TI) in Bangalore. He al Council to support US President Barack KLE-TU invited Deshpande Foundation was subsequently shifted to Houston, Obama’s innovation and entrepreneur- and enabled the location of the Desh- USA. But, Vivek always felt the need to do ship strategy. He has set up Deshpande pande Centre for Social Entrepreneurship something for his country, by generating Centre for Technological Innovation at inside the University campus in 2012. entrepreneurship and providing employ- Massachusetts Institute of Technology In line with the spirit of the Deshpande ment to the local youths and prevent brain (MIT), USA, among others. He has pur- Centre at MIT, USA, the Centre at KLE-TU drain to metropolitan cities in a techno- sued an entrepreneurial career for the last has the mission of funding technology logically less developed Tier-2 city. three decades. He is involved either as the products for commercialization. This is Though Vivek created his enterprise founder, a founding investor or chairman achieved, in two ways: (SS) in Bangalore, he got business from TI

44 TECH MONITOR • Apr-Jun 2018 Building an entrepreneurial ecosystem for tech start-ups based in Houston. As his objective was to tion of new product ideas derived out of beyond. Pupa was initiated in 2013. Since move into a Tier-2 city, he had the option the technology research, capacity building then, it has been attracting more and more of shifting SS to one of the three cities in of faculty and students as a result of the students, year by year, where student Karnataka state, namely, Mysore, Belgaum previous activities leading to development groups exhibit their ideas for evaluation. and Hubli. The prompt positive response of an indigenous chip from India as a high- In 2016 alone, 1250 students from 30 insti- that he received for his query from KLE- tech product formed the key tenets of the tutions participated in the Pupa where 404 TU led him to Hubli and understand the implementation roadmap of the proposed teams exhibited their ideas. efforts put in by KLE-TU for entrepreneur- plan. Though IESA aimed at promoting six Ideation camp: The ideation camp ship promotion and ecosystem building. ESDM Centres of Excellence (ECOE) in six is a two-day workshop (with 72 seats) The offer of space, free of cost, by the Vice- different locations of India, only KLE-TU where students are trained for idea vali- Chancellor of KLE-TU to Vivek clinched the could establish the centre. The students, dation, and pitching. This will have multi- issue in favour of creating another unit faculty, resident entrepreneurs, the sup- disciplinary teams and it is result oriented. of SS in Hubli, apart from Bangalore. He port system at KLE-TU served as the key Ideation camp was initially launched by founded Hubli-based SS in 2005. Today, SS ingredients required to enable success of Intel as a Youth Enterprise Programme, employs about 1000 persons (mostly rural the pilot program to build an indigenous which was started by KLE-TU in 2014. As of youths) and operates out of six locations, IOT chip out of the activities pursued as now, Ideation Camp is primarily confined namely, Bangalore, Kolkata and Hubli in part of this consortium (IESA, 2016). to KLE-TU students. India, apart from Canada, Germany and As of now, the first India Chip built from Butterfly contest: The KLE-TU stu- USA. His only intent was to create centres the above efforts is being tested. About 90% dents with proven ideas are encouraged in Tier II cities of India, in order to enable of the students involved in this activity were to move on to the Butterfly stage involving inclusive growth, and SS is a small step successfully absorbed to lateral positions in technology business plan contest, which towards that (Yourstory, 2016). different MNCs – indicating the success in has an overall duration of three weeks. The capacity building and skill development in business plan contest is judged by indus- Partnering with NETRA the sector. The flexibility provided by KLE- try partners of KLE-TU. The successful ones NETRA is the acronym for National ESDM TU to consider Industry course as a credit graduate to join Capstone Project Track of Technology Research Academy, which is course enabled the incubation, research CTiE in the final year of their engineering a consortium and think tank supported and product development activities of this degree programme. The Butterfly contest by India Electronics and Semiconductor plan. In summary, by being a core partner in was first launched in 2012 as a lead into the Association (IESA) and Electronics Sector the NETRA program, KLE-TU is providing the Capstone Project Track with seven projects Skills Council of India (ESSCI) which in- foundation for further success in the high- comprising 37 students successfully join- cludes, among others, the Vice Chancellor tech entrepreneurship sector. ing the track (out of a total of 14 teams of KLE-TU. The vision of NETRA & ESSCI is involving 52 students altogether). to transform engineering campuses into Building internal ecosystem The formal intervention is done ESDM Product Innovation Centers [EPIC] What was equally challenging was the through planned curriculum introduction through Industry Partnerships. The key creation of an internal system to nurture as follows: promoters of NETRA envisioned to inte- entrepreneurial talent within KLE-TU. To Engineering design  Product grate the right ingredients to drive the achieve the objective, CTiE planned both design and realization  Principles of global leadership from India in a high- formal and informal interventions with innovation & entrepreneurship  Cap- technology sector such as ESDM. the graduate student community (rang- stone Project Track To achieve their vision, the key stake- ing from the first year till the final year of An engineering design course has holders of NETRA derived a plan to focus engineering). The interventions are aimed been introduced across all the disciplines on research with productized solutions. at (i) inspiring, and (ii) educating & ena- of engineering and it ends with a design This plan was arrived at after a careful bling student start-ups. project. This enables the students to get a review of the operating models of suc- The informal intervention has three grasp over project designing. This is gener- cessful global entrepreneurial ecosystems stages of operations: ally done in the second semester. In the across the world – such as Stanford Univer- Pupa  Ideation Camp  Butterfly third and fourth semesters, the students sity, USA, Industrial Technology Research  Capstone Project Track are formed into multi-disciplinary teams Institute (ITRI), Taiwan Province of China, Pupa: The objective of Pupa is to for enabling them to understand product Electronics and Telecommunications capture ideas from the young minds design and realization, with hands on pro- Research Institute (ETRI), Republic of Korea for its subsequent nurturing. Pupa is an jects. This is done with respect to existing and International Medical Equipment Col- annual programme conducted by and at technology products. laborative (IMEC) in Europe. Technology KLE-TU for the engineering graduate stu- Subsequently, these students have to research where the right problems were dents belonging to various engineering credit a course on principles of innovation chosen by industry trained faculty, incuba- education institutions across the state and and entrepreneurship, to get exposure to

TECH MONITOR • Apr-Jun 2018 45 Building an entrepreneurial ecosystem for tech start-ups business development. In addition, they  Some of the start-ups work on smart process, CTiE has achieved a considerable are trained in business communication and drones, block chain technology, bio- degree of success in developing a bare other soft skills. They are also exposed to Mas- medicines and bio-materials, among minimum entrepreneurial ecosystem in sive Open Online Course (MOOC) and field others, which reflect on the technology Hubli comprising the following: work. This was initially confined to the freely intensity of the projects involved. 1. A Double Helix base bringing together available University of Maryland (USA) online  During 2014-2016, CTiE has led to the Academia and Industry, in the absence course, but recently this has been replaced emergence and operations of 11 stu- of explicit role of the Government; by “Start-Up India Programme” inputs. dent led start-ups. Thus, encourage- 2. A growing number of tech start-ups Finally, they enter into Capstone Pro- ment to student entrepreneurship has and prospective tech start-ups; ject Track with their final year projects. started bearing fruits. 3. Five indispensable components con- Capstone Project Track is held for the  Eight of the 38 start-ups, which have sisting of (i) finance, (ii) market, (iii) final year students spanning over the already started their revenue gener- human resources, (iv) support system last two semesters of their engineer- ation stream, has moved into KLE-CTiE involving business incubation and ing degree programmes. Here they are Tech park in January 2017 on commer- support services, and (v) business and trained in conceptualizing and develop- cial terms thus providing revenue for technology mentors; ing their innovative ideas which have a KLE-CTiE. This is a win-win situation for 4. Two supplementary components, commercial potential, and after gradu- both start-ups and the incubator. namely, (i) supportive culture, and (ii) ation, opportunities are given for such  Two of the enterprises which emerged supportive media. students to get into formal business as start-ups, namely, Sankalp Semi- incubation. conductors and Navya Biologicals have This entrepreneurial ecosystem, though It is important to note that both infor- grown to become Rs.1000 million+ turn- at its infancy, is able to produce results in mal interventions and formal interven- over companies. This indicates their suc- the form of growing number of start-up tions converge at the Capstone Project cess and growth in terms of scaling up. emergence leading to their stability and Track, which is the stepping stone for  Growing media attention towards sustenance, and even success and growth, technology entrepreneurship emergence Hubli and slow and steady building but on a very limited scale. in the form of tech start-ups. up of the culture of entrepreneurship, thanks to the diverse initiatives of KLE- Major achievements: Developing TU and its outcomes. Inferences and conclusions industry-academia linkages for KLE-TU has played a commendable role start-ups Overall, KLE-TU through CTiE has pri- towards creating an entrepreneurial eco- The CTiE of KLE-TU has come a long way marily aimed at encouraging the building system for tech start-ups in Hubli, in the since its inception. The key achievements up of ecosystem components with the absence of an explicit Triple Helix base. are as follows: help of industry, by directly encouraging As an academic institution, it found the  CTiE currently has 38 start-ups, nearly industrial enterprises/start-ups to emerge local presence of private large enterprises ¾ of them are from serial entrepre- within the university campus, and ena- imperative, to prevent the exodus of engin- neurs. bling them to develop synergy with both eering graduates out of the city, in the  These start-ups have engaged more faculty and students, for mutual advan- short-run, and as a means of generating than 450 students through internships tage. This is achieved by providing the different components of an entrepreneur- and projects, indicating the growing following to in-house enterprises: ial ecosystem, in the medium to long run, enterprise-student synergy. apart from generating technology entre- 1. Physical space;  In four of the start-ups, faculty mem- preneurship itself. The entry/growth of 2. Access to the facilities on campus; bers of KLE-TU have joined as co-pro- private large enterprises in the field of IT 3. Student and faculty partnerships; moters and/or co-innovators, implying industry was a challenge because earlier 4. Business and Technology mentoring enterprise-faculty synergy. attempts to rope in domestically grown (in case of matching skills being avail-  These start-ups have created more IT MNC, Tata Consultancy Services (TCS), able on campus); than 400 engineering jobs for the local followed by Bangalore-based Quest, an 5. Business plan reviews and potential graduates and thereby prevented their engineering services IT company, into Hubli pivots; and had ended up in failure, due to the inordin- out-migration from Hubli in search of 6. Professional business environment. employment. ate delay in the decision-making process  The products from start-ups such as At the same time, with a clear defini- of the regional government in allotting the LabinApp, Navya Biologicals, Krishagni, tion of formal and informal interventions, required land (Times of India, 2006). GDV Research are exported all over the CTiE has developed a road map for the Thus, in the absence of a conducive and world, which indicate their interna- emergence of student entrepreneurship explicit support of the regional govern- tional acceptability. for technology start-ups. In the whole ment for the entry and/or birth and growth

46 TECH MONITOR • Apr-Jun 2018 Building an entrepreneurial ecosystem for tech start-ups of domestic large-scale IT enterprises in Thus, the KLE-TU initiatives, on the one task of building on the gains already made Hubli, apart from the absence of any MNC hand, tried to make up for the absence will be more challenging in the future. and any major research oriented public of a strong “Triple Helix” base, and on the Bangalore, being a globally recognized educational institution till recently, it was other, contributed to the creation of the tech start-up hub with heterogeneous high- left to the only reputed engineering educa- much needed “nucleus” of tech start-ups tech clusters, involving a strong Triple Helix tion institution, KLE-TU in the region “to act (and prospective tech start-ups), and one base, a growing number of tech start-ups or to leave it”. The leadership of KLE-TU took of the important indispensable (primary) and prospective tech start-ups, apart from the plunge by taking appropriate initiatives components, namely, human resources. the other valuable ecosystem components, towards the building up of an entrepre- The involvement of University faculty in is still considered to be “evolving”, implying neurial ecosystem for nurturing tech start- the nurturing of tech start-ups in the proof that it is still moderately matured (Bala ups. It rightly focused on encouraging large of concept/prototype development and a Subrahmanya, 2017c). As of now, Hubli still scale high-tech private enterprises, in the Minimum Variable Product (MVP), led to a lacks a strong base of R&D institutions and absence of any major public-sector enter- gradual emergence of “technical mentors”. MNCs, particularly Fortune 500 companies prise in the region. It has made the right In addition, the forging of successful links in the IT sector, both of which are diverse judgement by promoting the birth and with private enterprises enabled the provi- sources of tech entrepreneurship, human growth of private large-scale enterprises sion of “business mentors” to tech start-ups, resources, early market adopters, technol- within the university campus, to forge links for “market” identification, locally, region- ogy and business mentorship, sometimes with the faculty and students, for learning ally and even internationally. As majority even finance and support system in the as much as for generating employment and of the “fledgling start-ups” were primarily form of TBIs/Accelerators. Unless and until thereby prevent out-migration of young looking for “finance” in the form of seed (i) KLE-TU networks with the “recently born” technical talent from the city. Though the funds, they were arranged internally either IIITD and IITD, and (ii) regional government achievement made thus far is only on a tiny by the start-up founders themselves or by takes an initiative for attracting IT MNCs into scale, it is a heartening beginning. the TBIs, including CTiE of KLE-TU. Hubli, further growth of the ecosystem can The fact that Gururaj Deshpande who The emergence of tech start-ups and be hardly achieved to ensure an increasing hails from Hubli, but more importantly well- their operations, thanks to the role of Desh- number of birth as well as growth of tech disposed to the city to contribute to the pande Foundation, particularly Deshpande start-ups in the future. To conclude, ensur- development of IT industry and entrepre- Centre for Social Entrepreneurship and CTiE ing the presence of a fairly strong Triple neurship, became handy for KLE-TU to seek of KLE-TU, the favourable “entrepreneurial Helix base as early as possible is the need his contribution to the ecosystem develop- culture” is slowly and steadily blossoming. of the hour for KLE-TU as much as for Hubli ment initiatives. By arranging talks from him This has started attracting the attention of if it has to make it big in the future. in the University during his annual visits to local and regional “media”. Further, by open- Hubli, KLE-TU is deriving benefits out of his ing up its student entrepreneurial programs References international experience and exposure as to all other universities and colleges around an entrepreneur and venture capitalist, for the region, KLE-TU is building strong net- 99Arruda, C, V S Nogueria and V Costa strengthening Hubli ecosystem. The setting works and awareness about technology (2013): “The Brazilian Entrepreneurial up of Deshpande business incubator and its entrepreneurship which will be conducive Ecosystem of Start-ups: an analysis of entry into KLE-TU added further strength to to enhance the entrepreneurial culture of entrepreneurship determinants in Brazil the external environment of the university. the region, thereby also generating positive as seen from the OECD pillars”, Journal However, KLE-TU rightly observed that mere media coverage for its activities. Thus, slowly of Entrepreneurship and Innovation Man- development of external support will not and steadily two supplementary (second- agement, Vol. 2(3), pp. 17–57. carry it any far. What is equally important is ary) components are also emerging in Hubli. 99Bala Subrahmanya, M H (2017a): “An to build an internal environment for the cre- This is how, KLE-TU ensured the bare Ideal Entrepreneurial Ecosystem for ation of entrepreneurship. It is here that the minimum - emergence, presence and avail- Tech Start-Ups in India: Structure, Role two-pronged strategy in terms of informal ability - of tech entrepreneurial ecosystem and Importance”, ASCI Journal of Man- and formal initiatives for entrepreneurship components: acting single handedly for agement, Vol. 46(1), pp. 12–34. development adopted by KLE-TU needs to a Triple Helix base, and thereby generate 99Bala Subrahmanya, M H (2017b): “Com- be appreciated. Even here the University a nucleus and five indispensable compo- paring the Entrepreneurial Ecosystems for has made a beginning, though on a modest nents, followed by two supplementary Technology Start-Ups in Bangalore and scale, not only by forging links with the large components. To sum up, KLE-TU has enabled scale private enterprises (located within the Hubli to make a beginning on the path of a Hyderabad, India”, Technology Innovation campus as well as outside) by providing suitable entrepreneurial ecosystem devel- Management Review, Vol. 7(7), 16 pages. quality technical talent, but more import- opment for tech start-ups, but it has a long 99Bala Subrahmanya, M H (2017c): “How antly by generating technology entrepre- way to go to make a mark on the start-up did Bangalore emerge as a Global Hub of neurship. ecosystem landscape of India. Particularly, its Tech Start-ups in India? Entrepreneurial

TECH MONITOR • Apr-Jun 2018 47 Building an entrepreneurial ecosystem for tech start-ups

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