MUMBAI -- Large businesses in India are looking to team up with their younger competitors to stay ahead of the competition.
Maruti Suzuki India, a manufacturing subsidiary of Japanese automaker Suzuki Motor, has started a program to collect innovative technological ideas, while Procter & Gamble's Indian subsidiary has set up an investment fund to support startups.
Startups have flourished in India, thanks in part to Prime Minister Narendra Modi's policies. The government is promoting entrepreneurship under the Startup India initiative, which has simplified the patent application process and helped with fundraising.
Large companies are trying to keep up with the accelerating pace of innovation in business, and startups are a good source of new ideas and vigor. Newer companies are often better able to adapt to rapid technological change and bring new perspectives to the market.
Maruti Suzuki is soliciting business ideas online. It plans to choose the best ideas and let applicants test them over four months with advice from external experts. After the testing period is over, it will select the best candidates and look for ways to put their ideas to practical use.
The automaker is looking for innovative ideas related to automated driving, electric vehicles and charging equipment. But it is also exploring other areas, like artificial intelligence, big data analysis, finance and services for farming villages.
"India's automotive industry is growing," said Maruti Suzuki India CEO Kenichi Ayukawa. The company needs to promote technological innovation and take advantage of original ideas to revitalize its business, he added.
P&G's investment fund, set up last fall by its Indian operation, is aimed at investing in startups and entrepreneurs. The size of the fund has not been made public, but is believed to be several million dollars. The consumer products company invites startups to pitch business ideas online. It is looking for ideas related to manufacturing technology, packaging, distribution and supply chains.
"We are confident that through [the] program [for collaboration with startups] and the fund, we will be able to identify and implement cutting-edge solutions that are a strategic fit for us," said Madhusudan Gopalan, managing director and CEO of P&G India.
Collaboration is happening in other sectors, too. HDFC Bank, India's largest privately owned bank, in October signed a tie-up with 91springboard, a coworking space operator that provides support for startups. The bank aims to identify promising companies in fintech, which merges financial services with information technology.
Ride-hailing services have grown rapidly in India over the past few years as connected cars and automated driving reach the country. In retail, online shopping services have developed, and in finance, new services that threaten conventional banks, such as cashless transactions and digital loans, have appeared.
Collaboration between large companies and startups has become a global trend as innovations disrupt established business frameworks.
India’s education system emphasizes scientific and technical learning, and it produces many IT engineers. It has a population of about 1.3 billion and faces many social problems, such as poverty and inadequate public sanitation systems, but its business culture fosters many startups.
India's better-known startups include online companies like retailer Flipkart, which U.S. retail giant Walmart purchased last August. Another example is Think & Learn, the developer of "Byju's," an online education app that uses video and anime.
India is believed to have nearly 20 unicorns -- unlisted companies valued at more than $1 billion, putting it in third place worldwide, behind the U.S. and China.