The rapid expansion of the Internet has created an irreversibly networked world, accelerating globalization and rate of technological advancement.
Growing adoption of technology will play a crucial role in India's economic development and security.
India should aggressively kick-start the process of accelerating new technologies by rapidly and legally tapping into what has already been invented elsewhere - for creating an eco-system of technology know-how, demand and skill creation; crucial for both use, commercialization and technological capabilities.
India's Software savvy talent pool gives it a head-start in quickly moving into adoption and development of new technologies such as, Cybersecurity, Blockchain and Artificial Intelligence. The missing piece in achieving overall technology leadership and domestic capabilities is India's hardware and system design capabilities. India needs to seriously undertake development of domestic infrastructure for Cloud Computing, Networking, Automation, and Drone technologies crucial for its security and Military apparatus.
The recent US-China Trade spat has opened up a strategic window of opportunity for becoming part of a Global Value Chain of electronics hardware. India should jump into with both feet to rapidly capitalize on it before other Asian tigers such as, Vietnam, Malaysia etc. fill the gap. India has an edge over China as it is considered as a safer country to share Intellectual property due to its respect for IP, and laws to protect it.
A rapid way to put this strategy into action will be to strike a deal with major global contract manufacturer like Flex USA. Flex is a leader in the latest breakthroughs in manufacturing innovation. It works, collaboratively with technology manufacturers, startups, software and application providers, research institutions, universities and Flex innovation labs to bring innovations to market.
India should provide lucrative incentives (free land, subsidized electricity, tax breaks etc.) to lure such leaders to set up shops in India for building hardware and system software, for both meeting domestic needs (through white labeling products) and producing cost-effective exports for the rest of the world.
A company like flex will bring with it the global supply chain, crucial for building full systems and act as a training and skill development platform for accelerating India's domestic technology capabilities.
Once we create a critical mass of domestic know-how, we can begin to proliferate this skill into our sensitive domains of Defense and Security.
However, unlike Software, building Hardware requires much larger amount of Capital and the return on the investment is much longer and not as efficient. This is why many private businesses in India have generally stayed away from large investments in hardware development. Indian Government should step in to provide the necessary subsidies and incentives to attract private domestic and foreign partners to kick-start this important effort.
US government is reportedly considering restricting H1B vis grant for Indians to 15 per cent. India should use this change as an opportunity to retain the top talent from fleeing the country and incentivize them to stay home for developing technology companies with private-public partnerships. The Government should also woo some of the H1B presently in USA, who are eager to come back. A large-scale effort to build technology capability can absorb a large number of talented individuals in such enterprises and key Government positions. These returnees should be leveraged to help shape the future domestic technology policies utilizing the best practices they bring back with them.
Venture Capital start-ups are an important part of the innovation ecosystem. I had the distinct privilege and honor of pioneering, along with a handful of other pioneers, an early eco-system of Venture Capital in India. Venture Capital investments are highly speculative — bulk of the companies that receive VC funding fail. However, the one that hit a home run, such as my previous employer Intel and silicon valley household names like Apple, Google, and Microsoft, have gone on to make a lasting effect on America's lead in technology, innovation, jobs and economy. A fifth of current public U.S. companies were initially started with venture capital financing. VC backed companies act as mini-R & D centers, and even those which fail, contribute to growing know how, new skills and innovative mindset through spillovers. Indian Government should generously support venture capital and private equity by encouraging growth of domestic capital for equity financing. Central Government and states should spur growth in Venture capital by becoming Limited partners through investing 3% to 5% of their fixed income pension funds into venture capital.
If executed thoughtfully, technology will transform India into a twenty first century superpower and help lift tens of millions from poverty through technology driven economic growth.
(The Silicon Valley-based author also known as "Father of Pentium" is an engineer, entrepreneur and venture capitalist. Views are personal.)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)