Zinnov, the analyst group, revealed something promising today. They report that the rate at which technology startups are springing up in India is back to pre-recession levels. That translates to about 25-26 startups every quarter.
Currently India has about 2020 startups concentrated in the Bangalore and NCR region, a figure slated to go up by another 150 by year end.
All this augurs well and Zinnov even goes on to mention that these startups could provide the much needed impetus to turn India into an innovation hub.
I personally feel that these start-ups could also define India’s second moment of reckoning after the IT services boom that Indian companies capitalized back in the 1990’s and continue to reap benefits from.
Several factors lend credence to this belief of mine.
1. India is a proven story when it comes to IT services: The likes of TCS, Infosys, Wipro, HCL, Patni, MindTree and hundreds more have proved beyond an iota of doubt the ability of Indian companies to take on multi-geography, multi-year, multi-domain IT deals and execute them to world class standards.Be it RTB (Run the Business) and CTB (Change the Business) deals, Indian companies have proved their mettle bagging orders from Fortune 500 customers world over. These companies will be a hot bed of innovation as they embark on scaling the next level of value – Services to Solutions to Software Products. Be it Infosys with their Flypp and Finacle products, TCS with its iON Cloud offering, HCL with its AGORA SaaS platform you can see the transformation these companies have started institutionalizing within them.
2. Reverse Brain Drain: Lot of Indian talent that moved away from the country’s shores in search of better opportunities back in the 70s, 80s and right till the middle of 90s.The World Bank in 2005 estimated that there were 1.04m Indian-born people, educated past secondary school, living in the 30 relatively rich countries of the OECD in 2000. This largely successful diaspora today is yearning to get back to roots given the recession that has hit the OECD countries. Its members are a source of know-how and money, and provide valuable entrées into foreign markets and supply chains. Given the changing economic and investment climate back home and the captive market of 1 billion strong Indians to cater to, this reverse brain drain will be the second big hot bed of innovation coming in the form of startups
3. Innovation spurs innovation: A small trickle is how it all starts, but then it does not take long for the trickle to swell into a stream. Proven innovation will draw more companies to tap Indian talent for innovation. Be it Tata’s Nano, IISc’s Simputer, Chennai based Zoho or ThoughtWorks, Hyderabad based NotionInk, all these startups have proven one common thing. Indigenous talent can if given chance, develop world class innovations. This raises the confidence bar for Global R&D power houses like IBM, Microsoft, Google, Xerox, Samsung, etc to start looking at India as a hub to power their innovation fronts. The R&D labs that these enterprises setup would be 3rd hotbed for innovation.
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