From quite a few times I’m swinging on dreams of contributing in Indian technology industry, being a competitor for rest of the world, where till date 1st world technical institutions/industries has complete capture. Most of us have a feel that Indian software baby is now getting mature, and I have a strong feeling that it has got enough strength to conquer the battle. And strength is the skills acquired by Industry professional.
Now where is the Idea? Idea is in the open market (thanks to Economic Reforms). Now u can think of selling new things in the potential market. And when it all started? I got in touch with the communication industry while doing my Engineering course and believe me this market segment has really BIG potential. Now, for what we are waiting?
Let’s talk about some grown up babies. In the last decade, one of the most admired institutions among industrialists and economic policy makers around the world has been the U. S. venture capital industry. A recent OECD (2000) report identified venture capital as a critical component for the success of entrepreneurial high-technology firms and recommended that all nations consider strategies for encouraging the availability of venture capital. With such admiration and encouragement from prestigious international organizations have come various attempts to create an indigenous venture capital industry.
Probably the only other nation to develop a fully Silicon Valley-style venture capital industry is Israel. Taiwan, perhaps, is the only other country that appears to have developed a venture capital industry, though there has been little research on the dynamics of this process in Taiwan. Given the general difficulties in more wealthy and developed nations, it would seem that India would have poor prospects for developing a viable venture capital community.
Now there are reasons for India also to cheer up having good prospects of developing venture capital industry but there are reasons for thumbs down also. First, in contrast to the U. S., India had a history of state-directed institutional development that is similar, in certain ways, to such development in Japan and Korea, with the exception that ideologically the Indian government was avowedly hostile to capitalism. Furthermore, the government's powerful bureaucracy tightly controlled the economy, and the bureaucracy had a reputation for corruption. Such an environment would be considered hostile to the development of an institution dependent upon a stable, transparent institutional environment.
But India did have a number of strengths. It had an enormous number of small businesses and a public equity market. Wages were low, not only for physical labor, but also for trained engineers and scientists, of which there was a surfeit. India also boasted a homegrown software industry that began in the 1980s, and became visible upon the world scene in the mid-1990s. Experiencing rapid growth, some Indian software firms became significant successes and were able to list on the U. S. NASDAQ. Finally, beginning in the 1980s, but especially in the 1990s, a number of Indian engineers who had emigrated to the U. S. became entrepreneurs and began their own high-technology firms. They were extremely successful, making them multimillionaires or even billionaires, and some of them then became venture capitalists or angel investors. So there was a group of potential transfer agents.
The investment of capitalists in Indian industries in the first half of 2006 is $3 billion and is reached $6.5 billion at the end of the year.
Scientific, technology and knowledge based ideas properly supported by venture capital can be propelled into a powerful engine of economic growth and wealth creation in a sustainable manner. In various developed and developing economies venture capital has played a significant developmental role. India, along with Israel, Taiwan and the United States, is recognized for its globally competitive high technology and human capital. India has the second largest English speaking scientific and technical manpower in the world.
The Indian software sector crossed the Rs 100 billion mark turnover during 1998. The sector grew 58% on a year to year basis and exports accounted for Rs 65.3 billion while the domestic market accounted for Rs 35.1 billion. Exports grew by 67% in rupee terms and 55% in US dollar terms. The strength of software professionals grew by 14% in 1997 and has crossed 1,60,000. The global software sector is expected to grow at 12% to 15% per annum for the next 5 to 7 years.
Recently, there has also been greater visibility of Indian companies in the US. Given such vast potential not only in IT and software but also in the field of service industries, biotechnology, telecommunications, media and entertainment, medical and health services and other technology based manufacturing and product development, venture capital industry can play a catalytic role to put India on the world map as a success story.
So where, seeding is being done? Wireless/Telecom/Semiconductor/Embedded technologies, IT and IT-enabled services, Software Products (Mainly Enterprise-focused), Banking, PSU Disinvestments, Media/Entertainment, Bio Technology/Bio Informatics, Pharmaceuticals, Electronic Manufacturing, and of course Retail.
Indian VC yet to be established as a sustainable asset class among institutional investors. Moreover a limited amount of true “risk-capital” impacts entrepreneurial activity.
Exit challenges exist mainly due to shallow capital markets and dull M&A environment for small companies. Most importantly, India is yet to create a brand-name for IP-led companies, like Israel has successfully done but don’t lose heart, remember the strengths.
So what to do with this piece of info? Is any thing left to say? Its high time now to align your skills with the market requirement and make as many bucks as possible out of it.
