India - Hot Bed of Innovation?

Oracle's Chairman, Mr Jeff Henley has expressed his views on India as next Silicon valley. Read his comments at http://www.deccanherald.com/deccanherald/apr192006/business1945492006418.asp

The following few lines drove me to write this blog.

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Silicon Valley is in danger of losing its crown as home of the technology start-up as India is on course to become the new hotbed of innovation, according to the Chairman of Oracle, the world’s second largest software group.
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Though my views are pessimistic, yet worth contemplating.

Look at the level of innovation done at universities in India. You can't compare IISC with MIT. Neither can you compare IIMs with Harvard or Stanford. The differentiation lies with the quality of teaching, infrastructure, research activities, etc etc. Nevertheless there is some level of innovation done in IISC. But IIMs, forget it!!! It's all a salary machine. If US has reached top, it's because of the level of education and innovation done at these universities. Bill Gates might be a drop out, but not Steve Ballmer. To become a niche market in Technology innovation, India either import people from these universities or start its own universities which are competitive. Mere outsourcing/offshoring(as done by Oracle) may not improve the level of Technology Innovation to that extent.

India's revenue has grown because of burgeoning services sector. The contribution of products market is very less (though I don't have the figures right away to support my views). Here is a very crucial thought! How much innovation really happens or required in Services sphere? Talk to biggies in Services companies, you will get to realize it. Though there may be some level of process innovation, but definitely very less Technology innovation.

So then where is the question of India becoming the "HOT BED" of Technology Innovation?

Thanks
Bijaya