NW Venture Voice

« WSA Wireless Sensor Network Panel | Main | Ignition Raises $300MM Fund »

October 21, 2004

Musing about India

Just got back from India. A friend's wedding in Goa. Every morning I picked up a copy of The Economic Times. Every evening I chatted over drinks with various young professionals attending the wedding from across India, Europe and America. A couple of things struck me as important:

- The Indian economy is firing on all cylinders. Auto sales, pharma sales, real-estate, outsourcing and IT jobs are up double digits YonY.
- India's growth is accelerating even as China comes on line.
- Indian companies are moving up the value chain, especially in IT. There is a consolidation going on at the top of the IT outsourcing business by Wipro, Infosys leaving the middle market and small players looking to product development for growth. Look for Indian companies to get into original branded software product development in a big way (look out America).
- The bio/pharma sector is probably hotter than the IT sector. A partner in a leading executive recruiting firm said he has triple the number of searches going on in bio/pharma versus IT.
- The VCs that only visit Bangalore and think the India story is only about BPO are missing the mark.
- The Indian government is serious about divesting state owned enterprises (the old bedrock). Twelve new ones are being offered in the next three months.

The most interesting one to me was the fact that every day in the Economic Times of India was another article on an Indian IT company moving up into product development. And details of all the government programs to support this. While the culture of development is significantly different from the culture of a call center, it is probably just a matter of time. The recruiter I was talking to said most of his "C" level hires are returnes from America and Europe. Salaries go MUCH farther in India. India produces more computer engineers than America. It is only a matter of time before this combination of American trained management and inexpensive raw talent starts to deliver really cool products.

While I didn't spend alot of time looking for investments or talking with potential partner companies, it was clear to me that there is WAY more going on in India than most people are considering. I advise every start-up I work with to consider what their strategy to leverage India and China is. It can be as simple as outsourcing QA/testing or call center. It can be as complex as outsourcing all development and selling into the local markets. Whatever the strategy, the CEO who doesn't leverage the growth and market efficiencies going on in India/China does so at his peril.

Posted by Martin at October 21, 2004 10:28 AM

Trackback Pings

TrackBack URL for this entry:
http://www.nwventurevoice.com/cgi-bin/mt-tb.cgi/1473

Listed below are links to weblogs that reference Musing about India:

» Musings about India from Deep Green Crystals
Just posted some musings on India and how it may affect venture capital in the northwest over at : NW Venture Voice: Musing about India... [Read More]

Tracked on October 21, 2004 10:30 AM

» Wharton India Trip from Zornitza Stefanova
It has been a few days since I got back from a trip to India with my classmates at Wharton West. The purpose of the trip was to get a sense if the current economic boom in India (annual GDP [Read More]

Tracked on October 21, 2004 10:42 PM

» Martin Tobias on India from hamari vritti
Martian Tobias of NW Venture Voice via Rajesh Jain's Emergic talks about India - The Indian economy is firing on all cylinders. Auto sales, pharma sales, real-estate, outsourcing and IT jobs are up double digits YonY. - India's growth is accelera... [Read More]

Tracked on October 27, 2004 07:16 PM

Comments

Here's a personal twist on "outsourcing" to India. Last night, I met the founder of www.yourmaninindia.com. His company caters to non-resident Indians (NRIs) and provides concierge services for their needs within India. The breadth of services is amazing, everything from sending flowers to managing real property to providing care for an NRI's family members still in India. Great stuff.

Posted by: castanet at November 5, 2004 10:32 AM

Post a comment