Tuesday, February 20, 2007
India: The next Silicon Valley
posted by Andy Leff 
Let's play Word Association: Global Edition. China -- manufacturing. Japan -- electronics. India -- outsourcing.
India's technological savvy and abundance of labor has already drawn many U.S. companies to its shores. Now it is adding more fuel to the outsourcing fire by positioning itself to become the most bandwidth-competitive country in the world, thanks to new government regulations.
This is terrific news for American companies who want to start an Internet-based company or application for less money. Increased bandwidth in India lowers startups' barriers to entry, and saves larger, established corporations more cash. This, in turn, injects good ol' fashioned competition into the global marketplace, keeping businesses hungry and monopolies at bay.
But it's terrible news for American employees who might see more jobs sail overseas. If bandwidth costs drop 20 percent to 25 percent as predicted, new hosting companies will spring up all over India, and offer significantly cheaper services. This is likely to put smaller, U.S.-based hosting operations out of business, sending employees to the bread line.
Either way, India will reap rewards. Many VC firms are investigating investments there, giving small Indian shops the big funding options U.S. firms currently enjoy. Couple this cash flow with the drop in bandwidth prices, and India is poised to become the next global tech hub, joining South Korea and China as early tech adopters.
I can picture the new word association now: India -- Silicon Valley. The change is closer than we think.
India's technological savvy and abundance of labor has already drawn many U.S. companies to its shores. Now it is adding more fuel to the outsourcing fire by positioning itself to become the most bandwidth-competitive country in the world, thanks to new government regulations.
This is terrific news for American companies who want to start an Internet-based company or application for less money. Increased bandwidth in India lowers startups' barriers to entry, and saves larger, established corporations more cash. This, in turn, injects good ol' fashioned competition into the global marketplace, keeping businesses hungry and monopolies at bay.
But it's terrible news for American employees who might see more jobs sail overseas. If bandwidth costs drop 20 percent to 25 percent as predicted, new hosting companies will spring up all over India, and offer significantly cheaper services. This is likely to put smaller, U.S.-based hosting operations out of business, sending employees to the bread line.
Either way, India will reap rewards. Many VC firms are investigating investments there, giving small Indian shops the big funding options U.S. firms currently enjoy. Couple this cash flow with the drop in bandwidth prices, and India is poised to become the next global tech hub, joining South Korea and China as early tech adopters.
I can picture the new word association now: India -- Silicon Valley. The change is closer than we think.
Labels: India, Silicon Valley, VC
