India is morphing into a global R&D hub, but can it ever take on Silicon Valley?

When Americans think of the Indian technology sector, they still perceive a nation of call center workers and low-level computer programmers administering databases and updating websites. But while the West was sleeping, Indian IT morphed into a giant R&D machine. Indian companies that started out doing call center and low-level IT work have climbed the value chain to become outsourced providers of critical R&D in sophisticated areas such as semiconductor design, aerospace, automotive, network equipment and medical devices.

This is happening as multi-nationals set up their own R&D operations in India and partner with local shops. Both the Palm Pre smart phone and the Amazon Kindle, two of the hottest consumer electronics devices on the market, have key components designed in India. Intel designed its six-core Xeon processor in India. IBM has over 100,000 employees in India. A large number of these are building Big Blue’s most sophisticated software products. Cisco is developing cutting edge networking technologies for futuristic “intelligent cities” in Bangalore. Adobe, Cadence, Oracle, Microsoft and most of the large software companies are developing mainstream products in India.

Equally important are the arrival of Indian multi-nationals who are tackling global markets, such as Tata with its dirt cheap Nano car that the company is now positioning for a European market entry and Reva, which recently announced it was planning to build an electric car factory in New York state to address the U.S. market for electric vehicles.

What has been missing to date in India, however, is early stage venture activity and the type of grass-roots entrepreneurism that is the hallmark of American capitalism and Silicon Valley. In that respect China is way ahead of India with many startups taking advantage of huge government incentives and reeling in talented native Chinese returnees to serve as CEOs and CTOs. Note that Kaifu Lee, formerly Google’s top guy in China, was able to launch a $100 million startup incubator focusing entirely on the mobile sector — and he was flooded with business plans within days of opening his doors in the Middle Kingdom.

Read more . . .

Related articles by Zemanta

• Polycentric Innovation: The New Global Innovation Agenda for MNCs (blogs.harvardbusiness.org)
• The Global Innovation Migration to Low-cost Engineering (induslatin.com)
• Microsoft, IBM And Yahoo Are Vying To Take Part In India’s Unique ID Project (techcrunch.com)
• Polycentric Innovation: A New Mandate for Multinationals (online.wsj.com)

Random Posts:

• Palau pioneers ’shark sanctuary’
• Welcome to Innovation Toronto!
• Cassandras of Climate
• Location Changed for Today!
• Dark Days for Green Energy

Related posts:

1. SMSONE: Micro-Local News From India To Make Silicon Valley Jealous
2. Seattle Taps Its Inner Silicon Valley
3. Why China Isn’t “The Next Silicon Valley”
4. Silicon Valley Shaped by Technology and Traffic
5. An Outsider’s Flawed View Of Silicon Valley

Tags: entrepreneurs, entrepreneurship, india, microsoft, Silicon Valley, startup, venture capital

This entry was posted on Sunday, November 15th, 2009 at 5:51 pm and is filed under Consider This, Innovation, Shape of Things to Come?, TechCrunch, economics, learning. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.