The Hindu : National : Pushing for a national innovation agenda

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Wednesday, Aug 15, 2007
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National

Pushing for a national innovation agenda

V. Jayanth

IT-ITES sector must spur domestic industry applications

— File Photo: K.K. Mustafah

NEW THRUST: Internet-based banking marked another step forward in computer applications in banks.

CHENNAI: With the recent NASSCOM-Boston Consulting Group (BCG) survey focussing on building India’s innovation ecosystem, industry leaders want a government-led initiative to put in place a coordinated approach to evolve that framework.

Though the IT-ITES sector has performed well in the last quarter, the market’s expectations may be high to meet, especially in the context of the appreciating rupee.

NASSCOM sources say that it becomes equally important for IT majors and BPOs to focus on domestic industry and partner it in scaling up IT applications in all segments of industry. The Indian Railways, banks, insurance companies, and the financial services in general have already been identified as potentially the highest spenders on IT. “It may be useful if we could put together a team to bring about a close coordination between IT companies and the users, perhaps starting with the public sector. Our association is ready to catalyse this process with the support of the government,” says a vice-president of an IT major. According to James Abraham, partner and director, BCG, “support for innovation ecosystem is very important in making innovation at firm and country level successful. Relative to several international examples, Indian ecosystem is weak and requires significant bolstering. This study identifies specific initiatives which need to be undertaken by different stakeholders.”

Some of the challenges facing the Indian system are: insufficient mentoring and networking support for start-ups and entrepreneurs, lack of focus on intellectual property development in emerging technologies, lack of knowledge-sharing between IT-ITES firms and key user industries, severe lack of funding at the seed stage, lack of platforms for stakeholders to interact, absence of a marketplace for innovation trading, a tenuous partnership between industry and academia, and lack of meaningful collaboration between industry and research institutions.

A NASSCOM study has shown that IT spending by large corporates and small and medium enterprises in the country was the highest in banking and financial services, followed by energy and utility companies. But the segment that seems to have the largest potential was tourism and hospitality, which kept growing at a fast pace.

Similarly, after its historic turnaround, the Railways plans to spend about Rs. 6,000 crore over the next five years on IT applications. This will mark a substantial step-up in investment in both hardware and software during the 11th Five Year Plan, compared to a relatively modest Rs. 1,000 crore during the 10th Plan period.

Co-founder of a Bangalore-based IT major says the automotive sector holds “immense potential for the future.” With virtually every global automobile major setting up shop in India, and looking for export markets from this base, their focus was bound to turn to IT applications. “There are manufacturers who have a chip in the bonnet that can provide the current condition and the problem areas in a car. That is the way of the future: computer diagnosis of problems in car or vehicle. It facilitates quick maintenance of vehicles,” he reasons. His company is working with some of the automobile majors to take this process forward.

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