NASSCOM moots innovation fund of $100 mn

Bangalore, July 25: NASSCOM today announced the role out of a 100 million US dollars India Innovation Fund to be mopped up from IT and BT sector to encourage investment in innovative ideas and thoguhts that could add an additional 50 billion dollar in the revenue stream by 2012.

Speaking at the release of the NASSCOM and Boston Consulting Group (BCG) Innovation report that called for a six step approach to build India's innovation ecosystem, NASSCOM President Kiran Karnik said that the second tranche to the Fund could be around 150 to 200 Million US dollars.

He said besides the industry and financial institutions, the government could also chip in its contribution to the Fund with a hands off policy to encourage innovative ideas, processes and systems that could put India in a global leadership position.

Initially the IT and BT companies would be tapped he added stating even ICICI bank had offered to contribute.

He said the Fund could make seed investment into some innovation companies and the funding should be a long range investment.

The findings of the Innovation report 2007 aimed to unleash the innovative power of the Indian IT-ITES industry and benchmarked the Indian innovation ecosystem with leading innovation ecosystems around the world. In its recommendations it sought NASSCOM to scale its existing innovation initiatives and draft a Indi Innovation Framework which besides formation of a Fund have Indi Innovation certification programme and Thematic Innovation platforms.

The Report wanted the government to synergise its innovation related inititives to drive a national innovation agenda through one or several mechanisms. it could create a national innovation policy, launch mission mode projects in key tech areas and establish a National Innovation Commission, the NASSCOM-BCG report said.

Besides establishing innovation clusters of research institutes, academia and industry, the government should implement bold changes in polices related to innovation such as patents, business environment, venture capital and commercialisation of domestic technology, the report said.' Another recommendation was need for collaboration by local educational institutions with their foreign counterparts to increase quality of local research.

Commenting on the report Mr Karnik said though the country had emerged a distinguished leader on the world stage in the IT-ITES arena, Indian firms need to recognise act on the importance of 'innovation' to maintain their competitive edge and fuel further growth to challenge global players. Traditional factors that enabled the growth were fast eroding due to rising costs, geographical and cultural affinity to other destinations.

Mr Karnik said "focusing on innvoation besides difrferentiating Indian IT-ITES industry wil also allow it to tap additional revenue streams worth US D 50 billion by 2012".

The report traced out challenges faced by the Indian Innovation ecosystem said the current set up was beset with problems such as insufficient mentoring and networking support for start ups and entrepreneiurs, lack of entrepreneurs focussed on IP development in emerging technologies and lack of knowledge sharing between IT-ITES firms and key user industries. The basic problem was severe lack of funding at the seed/start up stage.

NASSCOM President Lakshmi Narayanan ''if the Indian IT industry can futher enhance its ability to service innovation which was the top priority for global corporations, the market opportunity is inestimable. Investment in deep domain knowledge and IP creation would help fuel the IT growth story''.

he said to sustain highlevels of growth the industry need to focus on cultivating and nurturing an ecosystem of innovation and institutionalise it.

UNI