Even as India has emerged as a growing hub of technological know-how and outsourcing business that the rest of the world admires, there is anxiety within India that the country is not living up to its innovation potential as reflected by its lack of trend-setting products. The Indian government and corporations invest significantly less on research and development (R&D) than other nations, and Indian companies funded by venture capitalists are far fewer compared to overseas.
Infosys co-founder Nadathur S. Raghavan says India is being constrained by a number of factors, including an educational system that focuses on rote learning rather than problem solving, a financial system that tends to shun investment in unproven concepts, and a culture that frowns on failure and atypical career choices. Analysts say entrepreneurial ventures such as Sloka Telecom are more likely to generate the next wave of jobs than big, entrenched Indian tech firms.
Indian Institute of Management professor Rishikesha T. Krishnan says that entrepreneurship continues to be restrained by government control over such sectors as manufacturing. In the United States and elsewhere, wealthy individuals or angel investors provide the seed capital for many startups, but in India most rich investors prefer to invest with relatives or close friends because it is thought to be less risky.
Nevertheless, innovation researcher and former tech entrepreneur Vivek Wadhwa says the climate for Indian startups has improved substantially over the last few years, and it should continue to improve partly because companies such as General Electric have recruited scores of engineers in India to work in R&D. He anticipates that these engineers will inevitably outgrow the companies they are working for and establish new firms with entrepreneurs that previously failed with startup attempts.
From The New York Times
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