Just had a chance to read my friend Shahid Shah's posts (1, 2, 3) about his recent trip to India -- good stuff! I'm finally reading "The World is Flat" by Friedman, and he goes into some depth about offshoring and its ability to accelerate the US and Europe's delivery schedules for innovation and invention.
I think that India's type of innovation is different to America's, at least right now. At the moment, they're taking existing tasks and finding new ways to execute them. The Japanese did the same thing with engineering: they didn't invent the car production line but they definitely executed it better than Ford, for example. Over time, of course, to maintain the edge they had created in innovation in execution, the Japanese had to look at the design of their products. And that's when they started becoming truly innovative. The Chinese are doing the same thing.
I've no doubt that Indian businesses will do the same over time, on a much grander scale because of the pent-up entrepreneurial spirit and legal structure of their economy (versus China, say). I wouldn't be surprised if Indian businesses were picking up stuff like Ruby on Rails much faster than US businesses, for example, and quickly developing J2EE frameworks and methods that will significantly accelerate their development timelines.
What's encouraging, though, is that unlike engineering businesses of yore, the US IT community seems to be embracing the prospect of India's services and how they can deliver benefits to our own economy.
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