The Future of Indian Technology

The Indian technology industry got its start running call centers and doing low-level IT work for western firms. Then, in the 2000s, it started taking on higher-level IT tasks, offering management consulting services, and performing sophisticated R&D. Now there is another transition happening, one far more significant: a transition to development of innovative technology products. Instead of providing IT services as the big outsourcing companies do, a new breed of startups is developing high-value products based on intellectual property. The Indian industry group NASSCOM estimates that in 2008, the country?s software product revenues totaled $1.64 billion. It forecasts that this will grow to $11 billion per year by 2015.

I attended the NASSCOM Product Enclave in Bangalore, this week, and gave several talks to the 1000+ entrepreneurs in attendance. I was surprised at the changes that are powering the new transition: its tech workers are leaving high-paying jobs in IT services, and kids out of school are ignoring social taboos against failure and defying marriage customs to become entrepreneurs. A few Americans are also joining the fray, starting their ventures in India rather than in Silicon Valley. Though in China, returnees from the U.S. are fuelling the entrepreneurship boom, they aren?t as important in India. Sadly for my Indian friends in Silicon Valley who are looking to return home, returnees?formerly in high demand and treated like rock stars?are out of vogue and now treated like rocks.

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