Rafiq Dossani

Creating an Environment for Venture Capital in India

Abstract The institution of venture capitalism is a difficult one to initiate through policy intervention, particularly in developing countries with unstable macroeconomic environments and histories of state involvement in the use of national capital and in the composition of production. India has all these constraints. The emergence of a thriving software services industry after 1985 created the raw material that venture capital could finance, thus achieving a critical precondition for venture capitals growth. It was followed by efforts to create a venture capital industry. After several setbacks, some success has been achieved largely due to a slow process of moulding the environment of rules and permissible institutions. The process was assisted by the role of overseas Indians in Silicon Valleys success in the 1990s. Yet, in terms of what is needed, most of the work remains to be done. Inevitably, this will be the result of joint work by policymakers and practitioners.

Lift and Shift: Moving the Back Office to India

The recent growth in offshoring business processes is driven by the need for cost savings, but, because of the potential for both the quantity and quality of work that may be done overseas, has larger implications for the service economy in developed countries. This paper uses India as a case study to examine the business, knowledge-related, and technological considerations that drive the globalization of business process fulfillment. It also examines the industrial structure that is emerging in India for the work and draws conclusions about its future and its implications for service workers in developed countries.

Reorganization of the power distribution sector in India

This paper presents the central issues for electricity-sector reform in India, as they grew out of the reform process that began in 1991, and within the context of the sectors organization, regulatory structure, and other institutional characteristics. The paper argues that Indias current reform policies will not be sufficient to achieve reliable, efficient power because distribution reform has not been done. Undertaking distribution reform is a difficult path to tread because of the absence of global consensus on best practices and conflicting forces, both economic and political. The paper analyzes alternative institutional structures for reform in the distribution sector. The findings include that the objectives of coverage and efficiency may conflict, that economically efficient reorganization may be politically unachievable and that the small, municipally owned firm may be the best compromise. Since many Indian states are economically and politically diverse from each other, and include both large served and unserved areas, there is scope to vary the organizational structure depending on the states situation. This paper provides a means to do so. The agenda for policymakers is to identify the situation in their respective states and choose a reorganization path that is the best compromise.

Globalization and the Offshoring of Services: The Case of India

The overwhelming majority of exports from developing countries to developed countries consist of agricultural commodities and manufactured goods. Such goods are usually produced under contract to a buyer from a developed country, the buyer managing design, marketing, and sales, while the seller handles production. Intermediate steps, such as accessing finance, technology, and raw materials, managing currency risks, and maintaining quality control, are shared between the buyer and the seller in special arrangements. Typically, in the introductory stages, the buyer assumes more control and takes more risk than in later stages. As the seller matures, it shares more of the risks and rewards. Nevertheless, history shows that the share of rewards (that is, the economic rents, if any) tend to remain with developed-country buyers. A new phase of globalization, international trade in services, has been emerging for at least a decade, and by now it looms important within the total value of World Trade Organization (WTO) trade. Developing countries around the world, particularly in Asia, have become large producers of services for developed countries. The range of such services is impressive. It includes back-office services such as payroll; customer-facing services such as call centers and telemedicine; design services such as the design of application-specific integrated circuits; research services such as conducting clinical trials; venture capital provision, from Taiwan to Silicon Valley, for example; software services such as programming; and IT and infrastructure outsourcing such as the managing of

Telecommunications reform in India

Introduction The Policy Agenda by Shyamal Ghosh TRAIs Objectives and Policy Focus in a Changing Environment by M.S. Verma An Institutional View by Rafiq Dossani and S. Manikutty Unleashing Telecommunications and Internet in India by Ashok Jhunjhunwala The Institutional Environment and Effects of Telecommunication Privatization and Market Liberalization in Asia by J.P. Singh A New Approach to Service Provision by Vinod Khosla Toward an Indian Information Economy: Lessons in Telecommunications Policy and Practice by Heather E. Hudson Universal Service, Competition, and Economic Growth: The Case of the Hidden Subsidy by Gregory L. Rosston and Bradley S. Wimmer Regulation and the Opening of the Mexican Telecommunications Markets by Cristina Casanueva Pricing Interconnection and Universal Service in a Liberalized Network: Lessons for India by Yale M. Braunstein Provision of Universal Service for Telecommunications in Densely Populated Developing Countries by F. Gasmi, J.J. Laffont, and W.W. Sharkey Parvathagiri, Andhra Pradesh: A Case Study of Rural Telecom in India by Uday Kumar National Telecom Policy-1994 National Telecom Policy-1999 Index

Network Associations and Professional Growth Among Engineers From India and China in Silicon Valley

The economic benefits attributed by the literature to ethnic networks include helping their members cope with social exclusion, mainstreaming, facilitating entrepreneurship, and providing access to transnational opportunities. In this article, the authors explore the benefits provided by participation in ethnic professional associations formed by Indian and Chinese engineers in Silicon Valley. We find that the ethnic professional associations offer several of these economic benefits. These benefits are complementary to the benefits from other ethnic ties and from nonethnic ties.

The Internet's role in offshored services: A case study of India

Using India as a case study, this article analyzes how the Internet influenced its export-oriented software industry. We show that prior to the Internet, domestic entrepreneurship was the key factor for the industrys origin and growth. The industry suffered from relatively low value-addition. As a result, domestic firms, though they were industry leaders within India, were followers of the global leadership provided by transnational firms. With the arrival of the Internet, there was a rise in the level of domain expertise. We show that the Internet facilitated the transfer of domain expertise for foreign firms more than it helped the acquisition of domain expertise by domestic firms. While the value-addition of the industry increased as a result, industry leadership began to pass to foreign firms. The strategic lesson for other countries trying to rapidly develop an export-oriented software industry is unambiguous: exclusive reliance on domestic entrepreneurship will usually result in the domestic industry falling behind its global competitors, while granting unrestricted entry to transnational firms will lead to the domestic firms losing industry leadership in most cases.

Reforming venture capital in India: creating the enabling environment for information technology

The paper analyses the need for venture capital in India to support the growth of its Information Technology industry. It is shown that the growth of a venture capital industry in India will help sustain growth at current levels with less risk, but that substantial changes in the regulatory, tax and currency environments are needed. An ideal environment is proposed, benchmarked against the US environment and used to develop a set of proposals for reform. The Indian venture capital regulator, the Securities and Exchange Board of India, recently accepted a report based on these proposals and the Ministry of Finance has put some of the proposals into law. An analysis of the accepted proposals shows the least progress in currency reform and in prudent expert rules. The forecast is for modest growth of the venture capital industry, with substantial growth unlikely until the remaining proposals are accepted.

Preparing for a Services Economy: An Evaluation of Higher Education in India

This report is part of a larger study to examine the role of higher education in Indias success in providing globally traded services. In this report, we assess the quality of software engineering education. We find that the institutional structure has the capacity to produce a quality of engineer suited to the current needs of the marketplace. This is a remarkable achievement considering the rapid change in both job requirements and the role of private provision in higher education. While it is too early to assess whether the currently emergent needs, particularly in research, project management and entrepreneurship, will be met by the current structure, we argue that the states role as regulator will be critical. While the state has so far demonstrated its capabilities of being an effective regulator, we argue that new regulatory capabilities will be needed of the state to address the evolving demands.

Preparing India’s Workforce for the Knowledge Economy

In this chapter, we assess the role of higher education in preparing India for new product and service development, focusing on software engineering education for tractability. We find that the institutional structure has the capacity to produce a quality of engineer suited to the current needs of the marketplace. This is a remarkable achievement considering the rapid change in both job requirements and the role of private provision in higher education. While it is too early to assess whether the currently emergent needs, particularly in research, project management and entrepreneurship, will be met by the current structure, we argue that the state’s role as regulator will be critical. While the state has so far demonstrated its capabilities of being an effective regulator, we argue that new regulatory capabilities will be needed of the state to address the evolving demands.