Government Policy Must Be a Part of Creating Regional Competitiveness

Joshi ¢ The biggest hurdle for entrepreneurship, other than money, is protective government policy. This is particularly true of countries like India where they have had very socialistic, bureaucratic, and slow government processes, very similar to Israel, and have been very protective of the local industry.

At TiE, our interest in entrepreneurship is rooted in the Silicon Valley culture: freewheeling, risk taking, and finding new ways to do things.

Along with the Silicon Valley culture, we build upon the very strong cultural heritage of India. It is the guru-chela /teacher-disciple tradition of how all arts, music, and even religion was taught in India. Generation after generation, knowledge was passed that way. The teacher imparts knowledge and experience, but the student also stimulates the process with the currency of questions as well as the new realities. TiE combines these two traditions.

India is opening up its market. At this stage, they are probably 60% open in relation to where they need to be. The rules have been relaxed and the bureaucratic process simplified. In the last five years , the government has become very receptive to outside ideas. Prior to that, its attitude toward those of us who were successful in high tech and wanted to help was, "We know what is best for our people and the country. Don't come here and give us this unsound advice. You do your own things; you left this country, come and visit us but don't bother us with your ideas."

Significant changes have occurred. The end of the Cold War may have had something to do with opening minds. In addition, the significant human flow back and forth, between the U.S. and India, and the explosion in international TV channels have helped Indians see the possibilities for themselves .

I have seen a sea change in the attitude and receptivity of the government relative to changes in areas such as tax structure, duty rates, venture capital, telecommunication policies, and privatization . Very positive changes are taking place in India.

Several Indian companies have now been listed on the Nasdaq, or issued ADRs (American depository receipt) on the New York Stock Exchange. Such listings will probably double in 2002, despite the global economic slowdown . So the U.S. and Indian financial markets are getting cemented together. This is the most effective way of strengthening the relationship between two countries. This also increases the two-way flow of people between them.