CRITICAL

EXAMINATION OF
INNOVATIVE
ENTREPRENUERS IN
ASIA

Submitted by:
Kanika
Goyal
08105028
 INTRODUCTION

GURCHARAN DAS, an Indian venture capitalist, consultant and author,

tells a story about stopping at a roadside café in southern India and
chatting to a 14-year-old boy who was waiting at tables. The boy said that
he needed the money to pay for computer lessons. His ultimate ambition
was to run a computer company just like his hero, Bilgay, the richest man
in the world. He may have got the name slightly wrong, but the sentiment
was spot on.

Over the past couple of decades India has been transformed from a
licence Raj into a land of uncaged entrepreneurs. Everybody knows about
companies like Infosys, but there is more to Indian entrepreneurialism
than software. Bollywood produces 1,000 films a year that are watched by
3.6 billion people (the figures for Hollywood are 700 and 2.6 billion). The
Narayana Hrudayalaya hospital, founded by Devi Shetty on the outskirts
of Bangalore, is turning heart surgery into a Wal-Mart-like business.
Kingfisher beer is popular wherever spicy curries are eaten. The global
slowdown will no doubt pose serious problems for India. But the country’s
mood has changed fundamentally since the government began opening up
the economy in 1991: fatalism has been replaced by can-do optimism.

India has drawn heavily on its expatriate population, particularly the 1m

who live in America, to kickstart its entrepreneurial economy. Rajat Gupta,
a former head of McKinsey, did as much as anybody to create the Indian
Business School in Hyderabad. Gururaj Deshpande, who sold his company,
Cascade Communications, to Ascend for $3.7 billion, is a ubiquitous
cheerleader for entrepreneurialism. Draper International, which in 1995
became the first foreign venture-capital fund to invest in India, relied on
money from Silicon Valley’s Indian community.

India has now begun to reverse the brain drain, summoning its prodigal
children back home. In 2003-05 some 5,000 tech-savvy Indians with more
than five years’ experience of working in America returned to India. Such
people have helped to fill some of the skills gaps created by the country’s
recent boom. They have also reinforced India’s already numerous links
with high-tech America.
India’s other advantage is its higher-education system, the top end of which
is very good at discovering and developing first-class brains. The British
introduced the ideal of meritocracy to India; Jawaharlal Nehru gave it a
technocratic twist by launching the Indian Institutes of Technology; and
India’s natural love of argument did the rest. These institutes, so
oversubscribed that only one in 75 applicants gets in, are now as bent on
producing entrepreneurs as they were once determined to produce Fabian
technicians.

New Ground Zero for Innovative Entrepreneurs:

The Asian region is showing some of the strongest signs of economic

life. China's economy is on track to grow more than 8% this year, fueling a
revival around the region. The Singapore economy grew an annualized
20% in the second quarter, and other parts of Southeast Asia as well as
India, Taiwan, and South Korea are looking up, too. Even Japan is officially
out of the recession, with gross domestic product increasing 0.6% in the
second quarter.
For all the recent good news, though, there's no denying these are
challenging times for Asian entrepreneurs. With the economic climate so
uncertain, they need patience, innovative ideas, and entrepreneurial spirit.

Of all the qualities that entrepreneurs possess one you will always seen in
varying degrees is the ability to be innovative. You will see entrepreneurs:

• coming up against a problem and actively deciding to find a solution

to solve it

• subconsciously struggling with one of lives irritations only to have a

'eureka' moment when a better way suddenly strikes them

• using a service or product everyday and starting a business by

adding a slight twist to make it even better than before
 A. Incredible India!!!

India is definitely the hub of entrepreneurs worldwide. More than 100

companies start every year, irrespective of the fact most of them do not
survive the competition, and die out sooner. But one cannot deny the fact
that people in INDIA are more risk-taking. Especially the distinct ‘marwari’
class, here where people make it as a status symbol, and take pride in
doing business.

According to research, INDIA ranks second in terms of innovation and the

entrepreneurial viewpoint or approach. The list is led by Thailand and to
my utter surprise the last name is JAPAN. Who would believe that? Even
US, Germany, UK are in the middle league of the race. But the concept in
INDIA is also changing today. People are encouraging their next generation
to look for service options. They find it more lucrative, more ‘relaxed’ (god
knows how!) and a much more safer and secure life. It is indeed a fact that
majority population of INDIA is in the service industry, taking INDIA to the
global positions.

A lot depends on many other factors in constituting this. For example, the
background of the parent, the approach of the individual, the friend circle,
he’s bred in (one of the most important factors), the people you stay with,
your upbringing, the education today plays a very important role today and
faces a serious challenge in creating more successful, powerful leaders.

The role of entrepreneurs has to be clearly understood in the present

scenario. A distinct difference between an entrepreneur and a businessman
has to be drawn. Working as a manager and working for a manager is a lot
different. Then again individuals have their own ideologies. I have friends
of all kinds. Versatility is the best traits! But you never choose your friends
based on whether he’s doing service or he is a businessman. However
interestingly you can always strike a distinct difference of opinions between
both types and contrast them to each other. That’s what amazes me, and
supports my personal effectiveness of being an entrepreneur!

Innovation is the key to sustainability today, in any regional or global

scenario. One has to understand that managers or employees who think
innovatively have the traits of an entrepreneur. What lacks in them, or
resists them from achieving that is RISK taking ability. This can again be
attributed to the fact that the person has never had an opportunity to take
risk, or has never taken an initiative. And India was ranked 2 in a research
for people with most innovative thinking. I believe this is true in a context
because the kind of development India has had in the past 5-10 years is
beyond what we dreamt of, and also in the future its going to be a super
power by 2010. Cheers to Indian Entrepreneurs and the workforce of
INDIA.

B. Progressive Russia:

The recent events signalled that Russia is growing its importance on the
global innovative landscape. On 10th December 2009, the leading Russian
stock exchange announced the opening of trading in the market for
innovations and investment.

A full scale of the current innovation activity in the country and its future
potential has become visible through a number of innovation-related
events. For example, the Russian Innovative Convent in Saint-Petersburg
in December was filled with more than 2,500 Russian scientists and
technical entrepreneurs who develop compelling products & technologies.
Projects ranged from technologies allowing evaluation of toxic elements in
water to active nanomembrane technologies and to devices which allow
easy identification of cancer. Again, the significant attention was driven by
foreign companies and investors. Some projects did receive the
acknowledgement from multinational corporations and a number of
projects were distinguished by Mercedes-Benz for the ecological
innovations in the automotive industry.

Russian innovative life is most prominently driven by talented scientists

and technical entrepreneurs which focus on the prospective areas such as
biotechnology, medical instruments, security systems, nanotechnology,
water and energy technologies, information technology including green IT.
Russians have been traditionally very strong in math and natural science as
well as in the IT space. The majority of innovative activity is happening in
Moscow, Zelenograd, Saint-Petersburg, Tomsk, Novosibirsk which are rich
in a number of innovative entrepreneurships, research institutes, centres of
innovation and technology. For some cities such as Tomsk, innovation
became the backbone of the regional development. This is why a number
of international IT-related corporations have already opened the centres of
innovation in these cities like f.e. the Centre of Innovation of Microsoft in
Saint-Petersburg.

The Russian innovative community has already become an increasing

source for R&D activities of the foreign companies and research institutes.
We come across the facts that Russian innovative entrepreneurs more
often collaborate and sell their ideas to foreign research institutes,
international corporations and venture investors. One of the reasons of this
intensifying collaboration is the fact that the market potential of these
technologies in the home country is often limited. The reason for this is the
current limited presence of technology-intensive industries in Russia which
could absorb these new technologies and innovative products as well as the
weak bridge between innovation and production. This is why technologies
developed by Russian scientists and entrepreneurs often find their
appliance in foreign markets which are closer to the end-user industries.

With the current intensification of the innovative activity in the country, we

envision that Russia would become an increasingly important part of the
global innovation system. At the same time, whether these innovative
ideas would be utilized within the country or would be more utilized
globally would depend on a number of factors. Most prominently, it would
depend on the success of the localization of technology-intensive industries
such as pharmaceutical industry, manufacturing of medical devices or
indigenous equipment manufacturing. Also, the intensity of modernization
of service-related industries such as utilities and telecommunication
services which could absorb these technologies is another important
contributing factor.

C. From knock-off to innovation: India V/s China

India and China are the two economies which have been growing
handsomely in times when even global superpowers like America have had
a roller-coaster ride.

Communist China’s conversion to entrepreneurialism is even more

surprising than Fabian India’s. When Wu Yi, the country’s then vice-
premier, visited America in 2006, she took more than 200 entrepreneurs
with her. About 60 Chinese companies are now traded on NASDAQ. The
Central Party school even offers special courses for entrepreneurs, known
as red capitalists.

In some ways China has had a more difficult task than India. The Cultural
Revolution destroyed the country’s intellectual and managerial capital. Few
Chinese speak good English. The state is more interested in grand projects
—from state-owned companies to giant infrastructure schemes—than in
letting a hundred flowers bloom. But China shares one important
advantage with India: the army of overseas Chinese who have made their
home in America, particularly Silicon Valley. China has used them well.

The Chinese authorities are fully aware of the part that the overseas
Chinese played in Taiwan’s economic take-off. Since the late 1990s they
have been doing everything they could to tempt expats back, upgrading
their universities, often working with foreign institutions, setting up science
parks and welcoming foreign companies. So many Chinese expats have
returned in the past few years that Valley-slang has given them a special
name, B2C (back to China).

Many of China’s most successful entrepreneurs have done little more than
produce knock-offs of American companies, mostly those they studied
when they first went to America. Baidu is a Chinese Google; Dangdang is a
Chinese Amazon; Taobao is a Chinese eBay; Oak Pacific Interactive is a
mishmash of MySpace, YouTube, Facebook and Craigslist; Chinacars is a
Chinese American Automobile Association. But even producing knock-offs
takes skill, particularly when the original companies are determined to
colonise the Chinese market. And imitative Chinese entrepreneurs can
bring innovative management methods to China. Baidu’s founder, Robin Li,
raised funds from American venture capitalists and offered stock options to
his earliest employees.

China is also producing some genuinely innovative entrepreneurs. Jack Ma

uses a website, Alibaba, to sell goods from China’s thousands of corner
shops to other businesses. Mr Ma has also created a college for
entrepreneurs. Jeff Chen has developed an internet browser which has
attracted venture capital from Denmark and is available in 20 languages.

Some of the most innovative entrepreneurs are working with mobile

telephony, which is even more important in China than it is in the West. Liu
Yingkui is selling insurance, mutual funds and bank services over the
 mobile internet. Charles Wang is trying to get subscribers addicted to his
free text-messaging service, PingCo, so that he can start signing them up
for premium services such as backing up address books, selling astrological
charts and providing weather updates.

• Watching this space (Analysis):

Both India and China have a long way to go. The Indian government is a
lumbering elephant riddled with favouritism, the country’s legal processes
move at glacial speed, much of the infrastructure is a mess and over a third
of the people are illiterate.

As for China, Yasheng Huang, of the Massachusetts Institute of Technology,

has shown how Chinese capitalism is being distorted by the influence of
politics. Some 40% of entrepreneurs are members of the Communist Party.
State-backed businesses receive a disproportionate share of capital. Even
sound businesses are frequently opaque: the Chinese reportedly maintain
three sets of books, one for their bankers, one for their accountants and one
for the government. Businessmen often neglect their firms because they
spend so much time cultivating political connections.

But both countries have already come a long way. HBS’s Tarun Khanna
points out that the entrepreneurial spirit is beginning to breathe new life into
India’s public sector. Bangalore has replaced its dilapidated airport with a
splendid new one, with the help of some private money. As for China’s red
capitalists, however much they are being held back by the party, they in
turn are forcing the party to change.

The opening up of China and India is releasing millions of new entrepreneurs

onto the world market. Many of them have already shown themselves able
not just to translate Western ideas into their local idioms but also to drive
technological advance of their own. The world has only just begun to feel the
effects.