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Monday, January 19, 2015

What incubators want from FM in the budget 2015.

iSPIRIT Expert Team on Incubators submitted their wishlist. Some recommendations:
1.      Incubators should be recognized and notified as “Single Window Clearance” point for starting and closing a business, set up by Incubatee companies. New provisions could be incorporated in the Companies Act to establish such procedures, with time limits. 
2.     The Incubators be exempt from: a) Income Tax under the applicable sections of IT Act, b) Customs Duty or any other applicable taxes for import of equipments, consumables, raw material, components and spares up to a limit of Rs. 20 crore ad valorem, and c) CST / Excise / VAT or any other applicable taxes for purchase of goods required for the Incubator.
3.      “Donors” who contribute funds to the Incubator for furtherance of the objects of the Incubator should be eligible for 200% tax benefits as currently applicable to R&D investments. As an additional motivation, the benefit of such an investment can be carried forward for three successive assessment years.
4.The Incubators currently run SEED Funds given by the Government which are at present less than Rs. 5 crore per Incubator and with an investment cap  1.      of Rs. 50 lakh per enterprise. These being risky investments, the gains made out of successful exits, should be tax exempt as these resources are redeployed for investment, similar to the current pass through status accorded to VC’s.
5.      The Incubators should be recognised as crowd funding platforms under SEBI. The SEBI should work with Incubators to workout modalities in this regard.
6.      The Incubators should be authorised and empowered to approve and notify Incubatee Companies to avail of the benefits extended from time to time.
7.      To be considered as par with SEBI approved Investors as per provisions in Section 56(2).
8.      There is a restriction on compensation/salary of CEO/MD of Section 25 (Sec 8) companies which is grossly inadequate. This must be raised to a minimum of Rs.2 lakh per month and can be made applicable to the approved Technology Business Incubators.

Saturday, January 17, 2015

Market leaders to Category Kings: Fast mover takes all.

Report by Play Bigger `Time To Market Cap: The new metric that matter' elaborated on this concept of Category Kings.
TTMC is the measure of the time it takes a company to reach certain market capitalization milestones such as $500 million, $1 billion, or $5 billion. Time is measured by the number of years since the company was founded. Market cap is measured by (a) a company public market
capitalization, or (b) a company valuation at the time of purchase, or (c) the most recent post-money valuation from a round of financing.
Category Kings, the companies that dominate the rest of their competitors in a particular market, rise above the rest. Think Facebook, Twitter, Uber, Airbnb, Workday. Category Kings take a greater percentage of a category’s total market cap now than in any previous era. Most Category Kings win 76 percent of the category’s valuation.
Consumers Vs Enterprise
Is there a difference in TTMC by category of company?
Consumer companies had a much faster TTMC than enterprise
companies by a wide margin. However, enterprise companies went thru the same phenomenon, though stretched over longer time periods. So within the enterprise group, while not as fast as for consumer, were enterprise companies where TTMC was still accelerating, with enterprise companies reaching $500 million almost twice as fast for Era 3 (2009-13) compared with Era 1 (2000-3).

Tuesday, January 13, 2015

Lessons from the Chinese patenting system

Peter K. Yu, Drake University Law School, in his paper `

Building the Ladder: Three Decades of Development of the Chinese Patent Systemtraces the development of the modern Chinese patent system. It begins with a historical overview of the protection China offered to inventions during the dynastic and Republican eras. The article then identifies five different stages of development of the modern Chinese patent system. Going from stage to stage, this article demonstrates how a developing country could strategically build a patent system that is tailored to its own social, economic and technological conditions. The article concludes with five key lessons China's patent reform can provide to other developing countries.
Five Lessons:
First, a one-size-fits-all model does not work well at the global level, and retaining policy space is essential to the successful development of a country’s patent system. As commentators have widely noted, overprotecting intellectual property rights can harm a country as much as under-protecting them. While policy makers and industry leaders from intellectual property-exporting countries are eager to offer policy advice on how best to improve the patent system, policy makers from developing countries should pay close attention to their countries’ local needs, national interests, technological capabilities, institutional capacities and public health conditions.
Secondly, and relatedly, countries should maximise the flexibilities available in the existing international patent system.To be certain, the policy space available under today’s system is much more limited than what was available in the system’s early days.countries could still decide whether they want to promote the development of utility models, prohibit patent grants on second indications or introduce public interest exceptions into their laws.They
could also explore the use of alternative models to generate incentives for inventors.
Thirdly, countries that dare to develop their patent system at different paces or in different directions than what major intellectual property-exporting countries expect will likely be heavily criticised as pirating nations, or even “rogue” players in the international intellectual property community.
Fourthly, there seems to be a “crossover point” at which countries go from a pirating nation to a nation respectful of patent rights.Such crossover took place in many once-developing countries, including the United States, Germany, Japan, Singapore and South Korea.
Finally, there is no quick and easy solution to the massive piracy problems confronting developing countries. It took developed countries centuries to develop their patent system to its current stage.

Saturday, January 10, 2015

Fund of Funds- IFC Venture Capital Funds

Annual report 2013-14 shares information about the 3 funds managed by IFCI viz. India Automotive Component Manufacturers Private Equity Fund-1-Domestic (IACM-I-D), Green India Venture Fund (GIVF) and India Enterprise Development Fund (IEDF) with an aggregate corpus of `508 crore. The focus of all the three funds was on investments in mid-sized companies involved in setting-up niche business models in respective industry sectors with the prospects of scalability. The above mentioned funds were floated in June 2008. The funds are SEBI registered “Trust” funds. IDBI Trusteeship Services Limited is the trustee to all the three funds and IFCI Limited is the settlor. The funds have received contributions from 38 investors including 9 Banks, 5 Insurance Companies, 2 Financial Institutions and 22 HNIs. All the three funds were fully invested by 2011 and partial disinvestments have also started in these funds. Under these three funds,  investments made in 29 companies. The Company earns an annual management fee @ 2% p.a. on the outstanding fund corpus, of about ` 360 crore as on March 31, 2014. Besides, IFCI Venture is entitled to profit sharing on divestment since it also acted as an investor in all the three funds.

The so called venture funds do not invest in new technology ventures or start-ups.

Innovators Exhibition, Egypt, 8-9th March 2015

Hebatalrahman, Founder & President of Egyptian inventors syndicate is coordinating Egypt's first innovation exhibition and invites participation by Indian Innovators.
Dates: 8-9, March 2015
Venue: Beni-Suef University
Concessional travel by Egypt Air available and accommodation in University Hotel available.

A.S.Rao, President, Indian Innovators Association,
Hebatalrahman A, 
Dr.eng consultant in material science
founder & president of Egyptian inventors syndicate
president of the Egyptian society for women &youth inventors

Thursday, January 08, 2015

Medical Devices- expectations from Indian industry

Rajiv Nath, forum coordinator, Association of Indian Medical Device Industry (AIMED) listed the excitement and expectations in Indian Medical Times.

FDI only in Greenfield project :“The country remains heavily import dependent with nearly 70 per cent overall import dependency and in some device segments like medical electronics nearly 90 per cent. In this context, the biggest setback has been government’s decision to permit 100 per cent FDI in brownfield projects. We are not against 100 per cent FDI in greenfield projects but 100 per cent FDI in brownfield is short-sighted and will only increase the distress level of Indian medical device manufacturers by making them easy target for cherry picking by MNCs and will also defeat the very purpose of reducing import dependency or encouraging manufacturing of medical devices within the country.
“Last time, when FDI was permitted in this sector but without putting conditions to achieve the end objective i.e. encourage manufacturing within country, the whole idea got defeated as MNCs simply put up marketing and trading shops in India without creating manufacturing bases. They simply imported goods and sold it here increasing the country’s import dependency. This time too, such things are going to happen. In a letter to the Union Minister for State, Department of Commerce & Industry, Smt Nirmala Sitharaman, we have demanded a blanket ban on 100 per cent FDI in brownfield projects.
“Even for greenfield projects, there has to be a condition that at least 60 per cent of overall goods being sold by a foreign company in India have to be manufactured within the country. Unless this is done, we firmly believe that manufacturing of medical devices within the country will never take off and we will continue to be heavily import dependent.
Rationalization of Tax StructureDue to myopic import taxation policy we have a situation where import duty on raw materials and semi-finished goods (which goes into making of medical devices) is higher than import duty on finished goods. This means, it is cheaper to import medical devices rather than manufacture it in the country. So, why would anyone invest in manufacturing or continue to be manufacturer when they will never be able to match the price parity with imported items. If the government really wishes to encourage ‘Make in India’, it has to remove this anomaly at the earliest.
Domestic Preferential Public Procurement Policy: Countries such as China and US are not only leading manufacturers of medical devices but they also follow a ‘Domestic Preferential Public Procurement Policy’ whereby they give 15-20 per cent price preference to domestically manufactured goods in public procurement. India follows no such policy. We have petitioned the government through a representation to Mr V K Subburaj, Secretary, Department of Pharmaceuticals, Government of India to formulate a 15 per cent price preferential ‘Buy Indian Procurement Policy’ in Indian Public Healthcare System which will also be in sync with policies followed in countries such as US and China and will also be in line with Prime Minister Modi’s vision of ‘Make in India.’
De-clubbing of Medical Device sector from Drug and Cosmetics Sector: Currently, medical device industry in India is governed under the provisions of the Drugs & Cosmetic Act 1940 & Rules 1945 and nodal regulatory authorities are Drugs Controller General (India) and Directorate General of Health Services, Ministry of Health and Family Welfare! At present, there is no nodal or separate body for regulating or supporting medical device industry. So, this sector is nobody’s baby but everyone’s business! World over this does not happen as medical device industry is different from drugs and cosmetics. We have demanded changes in the Act and the creation of a separate regulatory authority for medical device industry. Medical device sector should never have been and should not be clubbed with drugs and cosmetics.

Electronic Development Fund (EDF) to be set up as a “Fund of Funds” to participate in “Daughter Funds”

As part of the “Digital India” agenda of the Government, it is envisaged to develop the Electronics System Design and Manufacturing (ESDM) sector to achieve net zero imports by 2020. Setting up of EDF is one of the important strategies which would enable creating an electronics industry ecosystem in the country in this regard.
Creating a vibrant ecosystem of innovation, research and development (R&D) and with active industry involvement is essential for a thriving electronics industry. It is with this objective that an Electronic Development Fund (EDF) is proposed to be set up as a “Fund of Funds” to participate in “Daughter Funds” which in turn will provide risk capital to companies developing new technologies in the area of electronics, nano-electronics and Information Technology (IT).
Assuming that the average participation of EDF in Daughter Fund is 25%, the policy will help leverage four times Government funding in the area of R&D and innovation. It will help create a battery of Daughter funds and Fund Managers who will be seeking good start-ups (potential winners) and selecting them based on professional considerations.
The policy provides a framework where the decision to support R&D is based on market conditions and through industry professionals well versed with industry requirements.
Download policy.

Wednesday, January 07, 2015

Workshop on Design Innovation and Creative Problem Solving , IIT Hyderabad, India Jan 15-17 2015

This workshop aims to introduce broad areas of design innovation and creative problem solving.The emphasis will be on methodologies like TRIZ, systematic Innovation and Technology Forecasting.
Prof. Gaetano Cascini, Professor, Politecnico di Milano, Milan, Italy
Dr. Shankar Venugopal, Director, Technology & Innovation,
Cummins Inc., Pune, India
Dr. Bala Ramadurai, Co-founder, TRIZ Innovation India, Pune, India
For online registration
Organising Committee
Workshop on Design Innovation & Creative Problem Solving
Department of Design,
Indian Institute of Technology Hyderabad
Ordnance Factory Campus,
Yeddumailaram 502205, Dist: Medak,
State: Telangana
Phone: +91-40-23017120
mobile: +91-8106691649