State of Innovation in India

Read Write Web has an interesting article on the state of innovation in India. I agree with most of what the author says in terms of transition over last ten years. Within the context of technology businesses, which is what the article focuses on, I am not sure of whether concept arbitrage theme (which is where all of internet and mobile businesses are put in the article) is what will remain dominant over 2008 and beyond. Few reasons:
– Mobile will come into stronger play. We are seeing early signs of traction in companies with local innovation, and I think that momentum will become far more evident in 2008
– On the internet, the early pickings of concept arbitrage are gone. While one can still borrow concepts from other parts of the world, those concepts haven’t been huge successes in their host geographies. And hence, the entire model will be revisited and localized heavily. Local search is an example.

In our own polls at venturewoods, entrepreneurs seem to be exhibiting a high degree of optimism that this indeed is the direction we are headed in. The hot areas as per that poll are local language Internet, mobile data services, Ecommerce/Mcommerce, online financial services, digital entertainment and online education – most of these areas are very high on the localization axis (due to infrastructure, regulation, and local content orientation).