India’s information technology sector may have started by running call centers and maintaining old computer code for American companies. But, today, instead of starting more I.T. services companies, a new breed of Indian entrepreneurs are developing high-value technology products based on intellectual property.
India’s I.T. industry is entering a new stage. The transition of India’s I.T. industry has been nothing less than remarkable. After helping American companies fix the Y2K bug in the late 90’s, Indian outsourcers started taking on the task of performing sophisticated research and development. Today, Indian engineers design aircraft engines, automotive components and manufacturing plants, next-generation microprocessors, telecom products, and medical devices. Indian I.T. has grown from almost nothing in 1980 to an estimated $88 billion in revenue in 2011 according to Indian I.T. trade group, NASSCOM. The engineering R&D services component of this has increased from $1.4 billion in 2004 to $11.3 billion. It is these R&D workers who are now innovating.
Look carefully, and you’ll see that dynamics at play in the U.S. are the same ones at play in India, where entrepreneurs start their tech companies when they are, on average,39 years old. American entrepreneurs typically have 10 to 15 years of work experience combined with ideas for products that solve real customer problems. They get tired of working for others and want to build wealth before they retire, so they make the plunge into entrepreneurship. India now has hundreds-of-thousands of R&D workers who have the experience and knowledge to found their own companies, and, like their U.S. counterparts, many are taking the risk and starting companies.
The Nov. 9 NASSCOM Product Conclaveprovided a first-hand look at how the ecosystem has evolved. The event was filled to capacity—1,400 people. The entrepreneurs in attendance were as confident, assertive, and ambitious as those I meet in Silicon Valley. But there were far fewer me-too social media companies and inexperienced founders making pie-in-the-sky projections of revenue growth. Most of the entrepreneurs in Bangalore were seasoned, mature executives focused on solving the problems of India’s infrastructure or taking advantage of its rapidly growing e-commerce marketplace.
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