TECH TALK: India Trends: Made in India

That India needs to move up and across the value chain is clear. The signs of that happening emerged in India. The number of companies setting up (or expanding) their development centres in India is growing. Yahoo India employs 250 people. Google has just opened their R&D centre. Microsoft and Oracle are growing theirs. IBM and the others already have a large presence. There is a small but non-zero possibility that Intel could set up a manufacturing facility in India. Nokia just announced that it will start making handsets in India next year. Even some of the leading American universities are exploring the possibility of setting up campuses in India to tap into the demand for highly qualified talent.

This is what the International Herald Tribune had to say about Nokia and Microsoft: Nokia and Microsoft both announced new ventures in India, underscoring the country’s increasing allure for high-technology companies. Nokia, the world’s biggest mobile phone maker, plans to spend as much as $150 million on a new mobile phone manufacturing plant in India to reduce costs and to cash in on increasing demand in the country. Microsoft, the world’s largest software maker, said that it would open a research lab in Bangalore, India, in January to increase its presence in the market and take advantage of the country’s large and increasingly sophisticated population of engineersWhile Microsoft is tapping into India’s scientists and engineers, Nokia is targeting its rapidly growing phone market.

The state-of-the-art development centres and manufacturing facilities are also attracting Indians back from abroad and a growing interest in venture capitalists. Even though much of the VC investment continues to be in the services and BPO sectors, we are already starting to see US-based companies with freshly acquired capital make India a key part of their technology development strategies. As the talent pool grows, we will start seeing companies emerge out of India for the global marketplace.

One such example is Ittiam, an Indian DSP firm, which recently got $6.5 million second round funding from Bank of America Equity Partners Asia. EE Times wrote about Ittiam: Ittiam has more than 50 customers for its intellectual property, some of which have been used in IP video phones and V.92 modems. Recently named the world’s most preferred DSP IP supplier, Ittiam counts Sony and Texas Instruments among its customers.

What we are now starting to see is innovation from India. What we also need to see is innovation for India. Here is the difference: the first kind of innovation focuses on the needs of the top of the pyramid globally, while the second kind of innovation is for the middle of the pyramid in emerging markets. We are seeing some of the latter, but we have a long way to go. For this, we need entrepreneurs and venture capitalists willing to look inward rather than outward. Hopefully, the coming year will see a lot more of such innovation. This is what will get us the Rs 5,000 ($110) PC and the Rs 1 lakh ($2,200) car. This is about a new innovation mindset made in India, first for India, and then for the other emerging markets.

Tomorrow: Looking Ahead

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Rajesh Jain

An Entrepreneur based in Mumbai, India.