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Next Advisor, led by Paolo Ragazzi, acted as Advisor to Fratelli Pagani S.p.A. in the acquisition of a business unit from Pimursa S.L., a historic Spanish company that produces and distributes spices and ingredients for the food industry. Pagani Iberica is thus born, which, in addition to incorporating Fratelli Pagani’s current business in Spain, acquires from Pimursa its company branch focused on the production of flavourings, ingredients and fragrances for Spain, Portugal and South America. This acquisition aims at strengthening Pagani’s presence in the Iberian Peninsula and marks the beginning of a strong partnership with Pimursa itself. Valentina Cardazzi, at the helm of Pagani Iberica and strong supporter of the operation states «The acquisition of Pimursa’s business unit is a fundamental step to strengthen Pagani’s presence in the Latin countries and lays the foundation for a rapid development in the Iberian Peninsula. The Iberian market…», continues Valentina, «…is very interesting, both for its remarkable affinity with the Italian market and for its high potential since Fratelli Pagani could acquire a significant share in just a few years…and last but not least, Spain is an indispensable bridge to South America, a huge market where Pimursa is already presents». Fratelli Pagani S.p.A. has been an undisputed leader for more than 110 years in the industry of spices, flavourings and functional ingredients for the food industry, especially for meat and related products. The Pagani Group, which boasts a turnover superior to 60 million euros, is present in more than 36 countries globally and the new Pagani Iberica subsidiary joins the three already present in Eastern Europe and the US one, inaugurated in 2018. Pimursa S.L, established in 1965 by the Muñoz family and headquartered in the Murcia region, is present in Spain and Portugal with the production and commercialization of a wide range of formulations for the food sector and is the undisputed leader in the world of Pimentón with a total turnover of more than 36 million euros. |
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Next Advisor, led by Paolo Ragazzi, acted as exclusive Advisor di Cerreto S.r.l., leading company in the world of organic products and foods, in the acquisition of a stake in Materland S.r.l., a historical Sicilian company specialized in the production and commercialization of legumes and dried fruits products. The transaction establishes the acquisition of 20% and an irrevocable option to reach 60% within the next 12 months. «The acquisition of Materland…» states Mattia Cardazzi, CEO of Cerreto «…is fully in line with Cerreto’s development plan for the coming years. Specifically, this first acquisition allows us to enter currently unattended markets, such as dried fruits and special legumes pastas, as well as allowing us, through the historical brand Terravecchia, to enter the traditional products’ market, affirming Cerreto as expression of the Organic world. Materland, moreover…», Cardazzi continues, «…already represents production excellence, boasting, for many products, a totally Sicilian integrated supply chain that, in the future, should involve almost all the marketed products». Cerreto S.r.l., headquartered in Gattatico (Reggio Emilia), has been operating in the organic food market for over thirty years, offering a wide range of top-quality organic products. Over the years, Cerreto has established itself as one of the most important and complete agrifood chains with an ever-increasing sensitivity to eco-sustainability in agriculture. Since 2015, Cerreto has become part of the Group Fratelli Pagani S.p.A., an Italian family company that has been producing and marketing exclusive flavorings and ingredients for the food industry for over a hundred years and five generations. Materland S.r.l., established in Sicily in the 1950s by the Terravecchia family, is active in the selection, production, packaging and distribution of a wide range of legume and dried fruit products. In recent years, the company has established important supply chain relations with leading Sicilian farmers to follow the products from sowing to harvesting, always with a particular focus and attention to the organic world. Today it is present on the market with the Terravecchia brand. |
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Next Advisor, led by Paolo Ragazzi, acted as exclusive Advisor of Aeromeccanica Stranich S.p.A a leading company in the world of industrial fans and dedusting systems, in the acquisition of E.C.M. Engineering Costruzioni Montaggi S.r.l., a company specializing in dust and ash handling and storage systems, fumes abatement plants and DeNOx systems. “The transaction, aimed to further strengthen the Group, is part of the consolidation campaign begun at the end of 2021 with the acquisition of the majority of Acovent S.r.l.. ECM represents an important and strategic add-on for Duscon, the historical Plant Division of Stranich, focused on the control of gaseous and dust pollutants, that, for almost a century, has played a role of excellence in the pollution control field” states Andrea Ferroni, majority shareholder, Chairman and CEO of Aeromeccanica Stranich. Aeromeccanica Stranich S.p.A., partially owned by the private equity fund Alcedo SGR, has been a leader in the Ventilation and Dust Collection business for more than 90 years. AS operates through its three production sites in Sesto San Giovanni, Pioltello and Senago and, since 2017, has been present in India with Stranich Fans & Duscon India Pvt Ltd to expand Stranich’s and Duscon’s activity in the strategic and continuously growing Indian and Asian markets, providing production, commercial and service solutions. ECM Engineering Costruzioni Montaggi S.r.l., established in 1990 and headquartered in Legnano (MI), specializes in the design and construction of ash and dust handling and storage systems, aspiration and purification plants for gaseous pollutants deriving from chemical processes, from steel and glass melting furnaces, from combustion and waste-to-energy and from any type of industrial process. |
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Next Advisor, led by Paolo Ragazzi, acted as exclusive Advisor of Aeromeccanica Stranich S.p.A, a leading company in the world of industrial fans and dedusting systems, in the acquisition of Acovent Srl, a company also active in the manufacturing of industrial fans and components for plants.
The legal aspects of the transaction were followed entirely by the law firm of Claudio Giammarino.
The acquisition allows Aeromeccanica Stranich to expand its presence in the market with centrifugal and axial fans of medium size, favoring the entry into industrial sectors currently not fully overseen, rapidly growing and benefiting from the NRRP.
“The completion of the product portfolio makes Aeromeccanica Stranich even more the leader in Europe in the field of industrial fans and inaugurates an acquisition campaign that will see the Company protagonist in the coming years” declared Andrea Ferroni, majority shareholder, President and CEO of Aeromeccanica Stranich.
Aeromeccanica Stranich S.p.A., partially owned by the private equity fund Alcedo SGR, has been a leader in the Ventilation and Dust Collection business for more than 90 years. AS operates through its two production sites in Sesto San Giovanni and Pioltello and can boast as references the main EPC contractors and final clients in numerous industrial sectors such as petrochemical, energy, chemical, pharmaceutical and steel. Since 2018, the Company has been present in India with a production plant and a technical-commercial office.
Acovent S.r.l., established in 1980 and headquartered in Senago (MI), specializes in the design and production of axial and centrifugal industrial fans. Acovent’s products are sold and installed both in Italy and around the world (i.e. Belgium, Germany, Turkey, UAE, India, Thailand, South America…).
Paolo Carcano takes on the role of President of Acovent, maintaining a minority shareholding.
| Next Advisor, led by Paolo Ragazzi, acted as Exclusive Financial Advisor to the Shareholders of the Ticomm & Promaco Group, a leading European company in the production and distribution of fiberglass gratings, in the sale of the entire share capital to LoGrate Holding AB, NewCo of Bolagsgruppen Lotorp AB, an industrial group based in Stockholm that manages, develops and invests in small and medium-sized enterprises.
“We have been looking for a long time for a Partner who would assist us in supporting and accelerating the growth of Ticomm & Promaco. Our choice fell on Lotorp because it shares our ideals, values experience and entrepreneurial spirit while operating with a long-term vision. Lotorp will be able both to guarantee the completion of the internationalization process and help us pursue the project, already in motion, to further develop the Made in Italy production in the Loreo plants” affirms Giuseppe Tantardini, founder of Ticomm & Promaco. The entrepreneur, who can boast over forty years of experience in the sector, will maintain his roles of CEO and Chairman of the Board of Directors, where he will be joined by Paolo Sacchi, director of LoGrate Holding AB. The Ticomm & Promaco Group with its brand EUROGRATE® is a European leader in the manufacturing and distribution of moulded and pultruded gratings and profiles for multiple industrial sectors. The Company uses an innovative and patented production technology and stands out in Europe for the quality of products, high standards of service, numerous certifications obtained and compliance with the highest environmental standards, boasting a unique and universally recognized experience and knowledge of the market. In addition to the production sites in Loreo (RO) and Gorgonzola (MI), the international presence of the Group is guaranteed by the foreign subsidiaries in Denmark, France, Germany and Spain. Bolagsgruppen Lotorp AB is a holding company, managed by three entrepreneurs, which invests, with a long-term perspective, in high-performing SMEs that boast recognized leadership in niche markets, with high profitability potential and established managerial structures. The Group makes complementary knowledge and skills available to its companies for the development of the various businesses and it ensures that all growth opportunities are exploited in the best possible way. The Lotorp Group currently consists of nine companies in diversified industrial sectors and has consolidated revenues of over € 150 million. This is, for Lotorp, the first acquisition in Italy. |
| Next Advisor, led by Paolo Ragazzi, acted as exclusive Financial Advisor of Sell-Plast S.r.l, a company specialized in plastic Thermoforming with a history in supplying major players in the automotive and hospital sectors, which sold a majority stake to MPD SME Capital One, the Private Equity vehicle designed by MPD Partners with the aim to innovate SMEs.
Sell-Plast S.r.l. was established in 1978 and headquartered in Torrazza Piemonte (TO). The Company as technology leader in the Automotive field, manufactures equipment for niche and series productions and supplies components to important Automotive and Special Vehicles Groups, such as CNH, Iveco, Magrius, Merlo and Lamborghini. Over the years, the Company has diversified its production by serving additional sectors that make extensive use of thermoformed components such as Furniture, Transportation and Aerospace. MPD SME Capital One (MSCO) is the innovation and investment initiative managed by MPD Partners. Its success hinges on an innovative governance model while matching innovative technologies and traditional businesses. MSCO channels its multi-year working experiences in invested companies with a constructive approach and leveraging on the knowledge of the invested company management. The transaction will allow Sell-Plast to further strengthen its position in the market and develop its business through efficiency, innovation and improvement of sales, processes, products, technologies and clientele, with an eye to sustainability and social responsibility. |
| Next Advisor, led by Mr. Paolo Ragazzi, acted as Financial Advisor of Assietta Private Equity SGR, which, through the Assietta Private Equity IV fund, acquired 70% of Mix Srl. Mix is an Italian company leader in the design and production of machinery for the mixing and treatment of powders, pastes, fibers and liquids used in food, chemical and pharmaceutical industries. The founding members will continue to hold the minority stake of the Company. “The operation“, explained, “confirms the growing interest from national and international private equity funds in the mechanical district of Emilia“.
Founded in 1990 and based in the province of Modena, Mix Srl expects to achieve a turnover of around € 11 million and an EBITDA of more than 20% in 2018. The entrance of APE in Mix Srl is aimed at internationalization, as well as approaching new markets and application sectors, achieved both through internal and external growth. The Assietta Private Equity IV fund has € 60 million of committed capital to invest in small and medium-size businesses, active in industrial sectors as mechanical engineering and manufacturing, heart of Italian SMEs. |
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Next Advisor, led by Dr. Paolo Ragazzi, acted as the Exclusive Financial Advisor of Happy Center Service S.r.l, a company active in the design and management of entertainment spaces for children, which sold its entire share capital to Leisure Group Italia S.r.l., a subsidiary of Dedem S.p.a, leader in the manufacturing and management of automatic photobooths. Happy Center Service S.r.l was established in 1995 by Gianni Fontana and headquartered in Gattatico (Reggio Emilia), is a company active in the direct management and third-party rental of children’s games, wholesale of games and rides, as well as the organization of entertainment activities within shopping centers. Happy Center manages about 1.800 entertainment spaces, 1.400 of which are installed in 300 shopping centers throughout the Italian territory. Leisure Group Italia S.r.l., headquartered in Rome, is a company active in the management of Family Entertainment Centers, travelling shows and permanent amusement parks. The transaction will allow Dedem to further strengthen its position in the national territory in the leisure industry, by bringing the Group approximately € 10 million in annual revenues and an EBITDA margin of around 10%, thus consolidating its status as the undisputed leader in the sector. |
Milan, September 29 2016
Next Advisor, led by Paolo Ragazzi, who already acted as Financial Advisor for the previous involvement of Intermonte Private Equity (now Assietta Private Equity) in Areomeccanica Stranich in 2013, has managed the entrance of Alcedo Sgr in the shareholding structure.
Alcedo SGR, through its new Alcedo IV Fund, invests € 10 million in Aeromeccanica Stranich, a company at the forefront in the design and manufacturing of heavy-duty fans and dust control equipment aimed at the petrochemical, power and steel industries. Alcedo bought its stake from Assietta Private Equity, which held it since 2013 through its MC2 Fund, which on this occasion netted a return of two times the capital invested.
Andrea Ferroni, CEO and majority shareholder of Aeromeccanica Stranich, will remain in its current role, confirming its full involvement in the management of the company. With a Value of Production close to € 25 million, Aeromeccanica Stranich operates in its two facilities of Sesto San Giovanni and Pioltello, both located near Milan. The company started its own activity in 1928, with the engineering, manufacturing and installation of centrifugal fans for all the industrial applications, acquiring and keeping over the years a consolidated leading position in the market. Since 1970, the Company has also developed its activities in the field of systems for pollutant and dusty gases control; for this purpose, a structure has been specifically created for the engineering, manufacturing and installation of state-of-the-art equipment. Alcedo will support Aeromeccanica Stranich in its geographical and commercial expansion strategy through both organic growth and strategic acquisitions in Italy and other countries. Aeromeccanica Stranich also aims to strengthen its organization with new managers that will allow the Company to support its ambitious growth plans.
“The strategy shared with the majority shareholder at the time of our investment – said Stefano Lissoni, director of Assietta – strengthened the company’s competitive position as well as its international expansion in geographical areas, such as Asia and the Middle East, having the highest growth rate in the industry, laying the ground for its future development”.
Andrea Ferroni, Chairman and CEO of Aeromeccanica Stranich commented: “Through the holding period of Assietta, Aeromeccanica Stranich achieved an important growth which brought our Value of Production from € 21 million to € 25 million, doubling our profitability and recording our highest ever backlog. In an increasingly competitive world market, we have found in Alcedo the ideal partner to support us in the future growth of Aeromeccanica Stranich”.
Paolo Ragazzi of Next Advisor acted as the only Financial Advisor.
Alcedo was assisted by Stefano Roncoroni of Gitti and Partners for legal matters, by Deloitte for financial and fiscal Due Diligence and for tax by Leo De Rosa of Russo De Rosa e Associati.
Assietta Private Equity was assisted by the layer Andrea Accornero of Simmons & Simmons, while the majority shareholder of Aeromeccanica Stranich was assisted by the layer Stefano Speroni of Studio Legale Dentons and Crowe Horwath AS., supporting the Financial Due Diligence and the organization of the Data Room.
The Corporate Finance newsletter of Crowe Horwath International – September 2016
Welcome to the September 2016 issue of Global Corporate Advisor.
In this issue, we discuss the strategic role that a corporate finance advisory firm can play when entrusted with the buy-side mandate. From research to strategic repositioning and creating a diversified product offering, the buyside mandate can be interpreted widely to the company’s advantage.
The second article addresses the startup climate in India, which is seeing a policy level push by the government. To be effective, start-ups need to identify the pain points in various sectors and undertake initiatives that address these, whether in the food technology,e-commerce or in overall research and development. India has the potential to become a global driver of innovation by harnessing its strong domestic market, deep talent pool, and underlying culture of frugal innovation.
A Case Study on Strategic Role in a Buy-Side Mandate
By Paolo Ragazzi, Milan
Fratelli Pagani (FP) is the Italian leader in the field of spices, aromas and ingredients for the meat industry. Across 2014 and 2015, the company implemented a diversification and expansion process of the business through two major acquisitions, and was driven in such deals as advisor by Crowe Horwath Italy (via Next Advisor, its corporate finance advisory firm).
The original buy-side mandate was directed to competitors of FP, essentially companies whose core business was the supply of spices, aromas and ingredients for the treatment of meat, pre-finished products, for the industry, for professional butchers and delicatessens. Research and the analysis of the potential target, interested in selling showed, however, that the acquisition of potential competitors could only substantially benefit FP in terms of acquisition of new clients, and not with gaining specific know-how and diversification in the market. In any case, as a market leader FP is already in a position to acquire new clients through aggressive market policies.
We then interpreted the mandate more widely, targeting a strategic repositioning of the group directing research into growing new sectors and markets, with a focus on generating strong synergies. The greatest competitive advantage of FP is their ability to individuate and build strong relationships with international suppliers in countries as varied as India, China and, Vietnam, traditionally renowned for their spices, which allows FP to obtain supplies at competitive prices.
Consequently, Next Advisor directed the search towards companies that were operating in the world of spices and aromas, but were business to consumer. This would enable the client’s entry into a market segment that they were not hitherto present in, while leveraging their core strength of product supply.
Keeping in mind the fact that the meat market, while driven by large volumes, is already quite mature, we focused on companies not particularly linked to the meat market. Based on this strategy, FP undertook a 45% acquisition of La Collina Toscana, a company with a turnover of more than €20 mn, focused on retail of spices, herbs and seasonings. For FP, this has created a major diversification both in terms of market and products, since La Collina Toscana is not only servicing the meat market, but also caters to fish, vegetables, pasta, and rice, among others. Having ended this first successful deal, Next Advisor continued the search for targets in line with this new diversification strategy, resulting in a second acquisition in 2015.
This time the acquisition marks FP’s entry into a related but completely different, high growth segment. Cerreto has been active in the organic food market in Italy for over two decades, as a food and agricultural company offering organic products of the typical regional and Mediterranean cuisine: herbs, spices, legumes and cereals, minestrone soups and risottos, soups, flavor enhancers and mixes for pasta sauces, seeds.
With this acquisition, FP entered the world of organic foods, which is showing high growth rates, following the trend of healthy food. In terms of synergy, the company’s core products – salts, spices, seeds, legumes and cereals are familiar to FP. Once Cerreto was identified, the deal was closed within six months with FP acquiring 93% of the capital, leaving 7% to the founder of Cerreto. The entry of Cerreto in the world of FP has an immediate benefit in terms of strong synergies with a cost-saving plan in the next couple of years, especially in raw material, leading to an expected improvement of the EDITDA of more than five points. FP thus enters a completely new and fast-growing market, acquiring credibility and know-how in organic products, which could enhance the brand-image of FP’s core business and consequently of the other diversification processes.
Today FP is the Italian reference company in the world of organic and non-organic aromas, seasoning, spices, herbs, vegetables and grains in the industrial and the retail markets. Between 2014 and 2016, the group’s revenue has grown from €30mn to more than €70mn. With this consolidation in Italy, FP is ready to look outside and Next Advisor’s buy-side mandate has the goal to identify new future acquisitions in Europe, in countries such as Poland, East-Europe, Germany and Spain.
Don’t Just Start Up – Solve the Right Problem
By Shitij Bahl, New Delhi
India is heading towards being the next big start-up hub and a lot of buzz has been created around the recently launched Start-up India movement. The initiative aims at fostering entrepreneurship and promoting innovation by creating an ecosystem conducive to growth of start-ups. The objective is that India must become a nation of job creators instead of being a nation of job seekers.
Highlights of the start-up India program
■ Compliance regime based on selfcertification
■ Legal support and fast-tracking patent examination at lower costs
■ Relaxed norms for public procurement for startups
■ Faster exit for start-ups
■ Tax exemption on capital gains
■ Tax exemption to start-ups for three years in a block of five years, if they are incorporated between April 1, 2016 and March 31, 2019
■ Tax exemption on investments above fair market value
■ Launch of Atal Innovation Mission (AIM) with self-employment and talent utilization (SETU) program
■ Launching of innovation focused programs for students
■ FAQs for startups hosted online
■ List of incubators hosted online
Fund of funds
A ‘fund of funds’ of INR100 billion for startups has been established by the government of India. The fund will invest in Securities and Exchange Board of India (SEBI) registered Alternative Investment Funds (AIFs) which, in turn, will invest in start-ups. Thus, this fund will act as an enabler to attract private capital in the form of equity, quasi equity, soft loans and other risk capital for start-ups.
Highlights of the status report published in September 2016
■ 1010 applications received between April 1, 2016 and September 18, 2016
■ 77 applications can be considered for tax benefits
■ The Start-up India hub has been able to resolve 19,566 queries received from startups through telephone and e-mails
■ Module to recognize incubators launched enabling them to obtain recognition from the government, which will allow them to issue recommendations
■ Seven proposals for research parks, 16 proposals for Technology Business Incubators (TBIs) and 13 proposals for start-up centers have been recommended for assistance by the National Expert Advisory Committee
It’s common to hear a new start-up story every day; some are inspiring, some are disappointing and some just don’t make any sense, either in terms of the usefulness of the product, or in terms of being a worthwhile investment opportunity.
It is a great thing to start-up, and we must give it a try, but successful startup ideas should be in sync with what is required on a long-term basis, fulfilling a need in the catchment. In the excitement and eagerness to start something new, keeping some basic rules of the game in mind would help organizations look at the big picture.
E-commerce websites
Do we need another one? Are any of them actually making money? If we review the financials that are on the portal run by the Ministry of Corporate Affairs (MCA), available on paying a simple fee of INR100, we can see that most of these financial statements are not showing any profits, and are bleeding investor funds. In fact, India’s e-commerce startup losses grew 293% to INR7,88.4 million in FY15.
Despite the seeming ease in setting up an e-commerce start-up, online shopping ventures are a long-term play and require strategic inputs to make them profitable.
Overall, the positive impact of this proliferation of e-commerce websites is the opening up of a whole new marketplace and related ecosystems. Consumers appreciate the fact we can order almost anything online and get it delivered in a couple of hours. In stage two of their operations, most e-commerce companies have realized the importance of investing in backend support and related activities. Many e-commerce ventures are scouting for companies providing innovative warehousing and logistics solutions, which makes entry into this sector a viable idea for those looking to jump into the start-up wave.
The ecosystem can get better only if more start-ups focus on improving the ecosystem at each and every step, eventually improving the online experience. Instead of focusing on another consumer- facing online venture in the fiercely competitive market, startups may be more effective if they focus on related activities, solving problems that are currently a hindrance to the success of the online shopping world.
Food technology
Anecdotally speaking, and from scanning media reports, it appears that food technology is currently a hot topic among potential start-ups and investors. However, unless new companies are willing to tackle the underlying dynamics of the sector, start-ups in the high-waste food sector may be doomed to failure.
Many start-ups in this sector have closed or are about to. Examples include Bangalore-based Dazo, which shut down within te year despite changing its business model from being an internet kitchen to a restaurant aggregator. Restaurant delivery service, Tinyowl shut operations in all cities except Mumbai, and Mealhopper, a service connecting customers to homecooked meals has been facing operational difficulties too. According to a Vision 2050 paper by the Indian Council of Agricultural Research, published in 2015, agricultural commodities post substantial incremental losses, estimated to be from 6 to 18% in 2012 during post production operations such as collection, cleaning, sorting/grading, decortications/shelling, drying, milling, packing, transportation, storage and value addition before reaching the consumer.
Among its short-term challenges, the paper lists using food technology to identify on-farm losses during storage by providing cost-effective cooling solutions. Technology for primary processing, safe packaging and transportation is also needed. In this scenario, successful start-ups will need to focus on resolving issues in the present ecosystem. They need to find solutions to first enable an ecosystem, which comprises elements such as home chefs, professional chefs, delivery people, kitchen equipment, delivery vehicles, quality control, food labs and test labs. There are many variables involved in this business, and many areas for potential success. An infrastructure-first approach is necessary for a food technology start-up to be profitable.
While apps and enabling technology are good, it is important for stakeholders in this sector to introduce the government to new infrastructure development, support new ideas for employment and address wider issues.
Taxi aggregation
Due to the entry of taxi aggregation companies, customers can find a reliable, fast and cheap mode of transport and drivers can look forward to a higher standard of living. Currently, the major players are Uber and Ola; the two rival companies with foreign funding trying to capture market share.
However, beyond the entry level disruptor stage, things are likely to get complicated. In countries where taxi aggregation has been around for a while, the maturing market is scrambling to address issues such as driver training,
costs and dynamics of car servicing, social profiling and driver behavior mapping to ensure safety.
Having solved a problem with an app, start-ups need to look beyond the first stage towards building a start-up to help in the evolution of this sector so they can continue to be meaningful and relevant.
Research and Development
To be truly competitive and hold its own against technology majors, Indian start-ups will need to begin focusing on research and development (R&D). Rather than focusing on smaller app projects, which will always depend on Apple, Google and Microsoft, start-ups need to focus on R&D. Unless Indian start-ups start ideating on a bigger scale and support large R&D projects, the bigger chunk of profit will always go to these companies.
India has been ranked 66 on the Global Innovation Index (GII) 2016 released this August. It has climbed 15 spots, from 81 in 2015, and maintained the top spot in the Central and South Asia regions. Worldwide the top spots are occupied by Switzerland, Sweden, the UK, the US, Finland and Singapore. In 2016, China has climbed to number 25, becoming the first middle-income country to enter the top 25 of the index in its nine editions of ranking the innovative capacity of 128 economies. India’s rank was low (117) in business environment. And while the overall education scoring was low, it was among the top 10 in graduates in science and engineering. It scored well in global R&D in the top three companies, in university rankings and in creative goods exports. Number 1 in information and communication technology service exports and number 3 on the domestic market scale that is measured by gross domestic product (GDP) based on the purchasing-power-parity (PPP) valuation of country GDP, the country is said to have all the ingredients neede to become a global driver of innovation.
Its strong market potential, a deep talent pool, and underlying culture of frugal innovation brings India second on innovation quality among middleincome economies, overtaking Brazil. The index’s report underlined that India’s priorities for innovation need to be in the areas of energy, water, transport, health care, food security and digital consumption.
A startup needs to focus on ingenious ways to solve problems, starting with fixing roads faster and making them more durable, and enabling every house to generate its own power and utilize resources efficiently. New and innovative housing and building material will enable the government to achieve its ambition of providing shelter to all. Ingenious ways for revolutionizing agriculture and community building will enable self-sufficiency, even as eschools ensure that education reaches every village. Efficient start-ups don’t aim to dazzle with another temporary viral idea; they create good, reliable solutions that address vital issues relevant to large sections of the population. This will enable holistic growth and create a foundation for entrepreneurs to thrive in.
So don’t just start up, please take the time to solve the right problem.
