India needs to convert IT skills to entrepreneurship

India's startup industry has been boosted by the growth of smart and cloud technologies and the rise in demand for big data and related services.

These trends have sparked an increase in new startups over the last couple of years. Facebook’s acquisition in January of Little Eye Labs, which helps developers analyze, optimize and measure apps, is a recent acknowledgement of the value of Indian innovators and risk-takers.

Other Indian IT startups that have been in the news include Exotel, Flytxt, Uniphore, Keypoint Technologies and Nanobi.

But India needs to up its game in developing intellectual property (IP). Recent comments by John Chambers, CEO of networking giant Cisco, hint that India is still far behind countries such as China and Israel. He said: "The Indian market has to do a lot more (with) startups, create that entrepreneurial spirit at a faster scale. I am committed to India, but it has not taken off in terms of IP generated anywhere like China or Israel."

It is important to encourage entrepreneurial spirit among graduates, because getting into a job is not the only option. Compared with universities such as MIT or Stanford, Indian institutions still lack ability to create independent entrepreneurship. But there are other institutions and companies, including Cisco, that are trying to change this situation.

Tanay Srivastava, junior software engineer at Tech Mahindra, said: “In recent times, startups in India have emerged as a new segment in the market. The promising element here is the 25-30 age group. These young people are coming out of colleges and universities and are full of energy and promising ideas. It is these people who need to be guided in the right direction and provided with some training. They can then come up with their own business ideas.”

Srivastava adds: “A small hindrance in this country might be the capital needed for investment. Another hindrance might be the pressure for people to start earning their daily bread. This is because the country has a big population and not enough jobs.”

There is big demand for new technologies, and although Indian companies play a major role in IT outsourcing services, innovation can disrupt the status quo.

Sushant Sahoo, managing director of Top League Technologies, said there are many reasons why India's startup ecosystem is still in its infancy. “As per this research, the internet culture in India hasn't matured as well as it's supposed to be," he said. "A huge percentage of our population is still not equipped with  general PC skills.

“A technologically advanced and knowledgeable population is the backbone of every successful e-commerce industry.” 

Startups will only thrive in India if there is at least a potential customer base, but startups in e-commerce, for example, struggle to get traction, said Sahoo. “It's no surprise that quite a few people, particularly in the rural belt, are still skeptical about buying online. As per the research, most debit card holders in India only use their cards to withdraw money from the bank.”

But there is hope. The BBC has suggested that Facebook's acquisition of Little Eye Labs could signal the start of a trend of US firms going for Indian startups. India's startup community is already enthused, and many believe more such acquisitions and transfers will follow. According to reports, about 15% of Silicon Valley tech startups have Indian founders.