The supremacy of western economies in the venture capital investment space is facing challenges from emerging economies with India expected to overtake global leader UK by 2009 if the current trend persists, a latest UBS-sponsored report said.
As per data analysed by the 'UBS UK Venture Backed Report - 2007' western leadership in innovation is being increasingly threatened by emerging economies like India and China.
According to the report, "India's VC market with a growth rate of approximately 90 per cent is likely to overtake the UK by 2009."
The Chinese VC market has already surpassed UK in terms of absolute size in 2006 and is growing at a much faster pace.
If the current growth rate persists, China's VC market would overtake the European market as a whole within two to three years. India would follow suit in the next four years, said the UBS sponsored report by Library House titled 'Funding Growth in a Changing World'.
The prime factor behind this stupendous growth by the emerging economies is that these countries have carved out a niche for themselves in the field of innovation as VC funds are utilised to support new ideas.
Venture capital forms a major component of a country's ability to innovate. The US is the acknowledged leader in technological innovation, while India and China pose an increasing challenge to the western economies.
India and China are at the cutting edge of innovation and strongly accelerating against the sluggish growth in Europe and the US, the report added.
The report says policy makers in the UK, Europe and the US must focus on how to maintain their lead in innovation amid the high competition. It cautioned that the rise of China and India should not be seen as a threat' to the West and vice-a-versa.
The reason being that for economic growth the utilisation of innovative products and services are perceived to be more important than their generation, analysts said.
"The consumption of innovation by an economy is just as important, as the generation of that innovation. UK companies need to become more willing to procure from innovative, but inexperienced, young companies," Professor of Business at Columbia University Amar Bhide said.
The global VC market has risen in recent years. Over 1.4 billion pounds of institutional capital was invested during 2006 through 556 deals in UK. The venture capital investments in 2006 shows a 27 per cent hike compared to 1.1 billion pound that was raised through 539 deals in 2005.
UK is the leader in Europe for VC but it still lags significantly behind the US in terms of absolute size.
Sunday, August 26, 2007
Sunday, August 19, 2007
Gujarat rules road to industrialisation: RBI
Gujarat has edged out Maharashtra to become India's top state in terms of investment commitments during 2006-07, cornering over 25 per cent of the total spending proposed by corporates across the country.
Gujarat received investment proposals to the tune of Rs 74,988 crore in 86 projects, while Andhra Pradesh was at a distant second with investment intentions worth Rs 25,173 crore, Maharashtra Rs 24,330 crore and Tamil Nadu Rs 24,229 crore, the Reserve Banks said in an analysis of 'Corporate Investment: Growth in 2006-07 and prospects for 2007-08.'
Gujarat, which is slated to go for elections some time in November, has displaced Maharashtra from the top slot attracting one-fourth of the total investment intentions in 1,054 projects aggregating Rs 2,83,440 crore.
Corporates invested Rs 1,31,299 crore in 812 crore during the previous year 2005-06.
Total investments during 2007-08, after taking into account the capital expenditure, ECBs etc, are likely to aggregate to Rs 2,06,460 crore, RBI said, adding the turnaround in corporate investment, which began in 2002-03 and peaked in 2004-05, is expected to be sustained in 2007-08.
During 2006-07, Maharashtra, in terms of investments, was relegated to the third place after Andhra Pradesh which attracted 8.9 per cent (Rs 25,173 crore) of the total corporate investments.
Maharashtra shared the third slot with Tamil Nadu attracting 8.6 per cent of total investments.
Gujarat received investment proposals to the tune of Rs 74,988 crore in 86 projects, while Andhra Pradesh was at a distant second with investment intentions worth Rs 25,173 crore, Maharashtra Rs 24,330 crore and Tamil Nadu Rs 24,229 crore, the Reserve Banks said in an analysis of 'Corporate Investment: Growth in 2006-07 and prospects for 2007-08.'
Gujarat, which is slated to go for elections some time in November, has displaced Maharashtra from the top slot attracting one-fourth of the total investment intentions in 1,054 projects aggregating Rs 2,83,440 crore.
Corporates invested Rs 1,31,299 crore in 812 crore during the previous year 2005-06.
Total investments during 2007-08, after taking into account the capital expenditure, ECBs etc, are likely to aggregate to Rs 2,06,460 crore, RBI said, adding the turnaround in corporate investment, which began in 2002-03 and peaked in 2004-05, is expected to be sustained in 2007-08.
During 2006-07, Maharashtra, in terms of investments, was relegated to the third place after Andhra Pradesh which attracted 8.9 per cent (Rs 25,173 crore) of the total corporate investments.
Maharashtra shared the third slot with Tamil Nadu attracting 8.6 per cent of total investments.
Saturday, August 18, 2007
China set to replace US as world's No 2 exporter
China is all set to overtake the United States as the world's second-largest exporter this year, and may well top Germany as the world's leading exporter next year, Xinhua news agency quoted vice minister of commerce Yu Guangzhou as saying.
China currently ranks third in export volume after Germany and the United States.
Beijing could overtake the US by the year-end if current trade trends continue, Guangzhou told the China Economic Development Forum.
Last year, China's export volume trailed US exports by less than $70 billion, while the pace of export growth was 7 percentage points faster than that of the US. If that growth continues, China's exports could exceed US exports by $50 billion this year, Yu said.
Chinese customs statistics show that the country's foreign trade volume reached $980.9 billion in January-June, up 23.3 per cent from the same period a year ago. Of this, exports grew 27.6 per cent to $546.7 billion, and imports grew 18.2 per cent to $434.2 billion.
Meanwhile, China's quality watchdog has warned that the country's failure to improve the quality of some of its exported goods was undermining its trade strength.
"We may have entered the ranks of the big traders, but we're still far, far from being a strong trade power, and the fundamental reason is that our product quality competitiveness is not strong," the People's Daily quoted Li Changjiang, head of the General Administration for Quality Supervision and Quarantine, as saying.
Concern over potentially tainted products made in China has resulted in recalls or bans on such goods - from Chinese toothpaste to toys and pet food. (See: Recall of Chinese toys has lead to factory closures: China Toy Association)
His comments were reported a day after China said it would send officials to the United States this month and next to cool worries stemming from a series of scandals over tainted exports, from toothpaste to pet food and toys containing lead paint.
"Quality is a symbol of national strength," Li said. He also called for tougher regulation of manufacturers and exporters.
China currently ranks third in export volume after Germany and the United States.
Beijing could overtake the US by the year-end if current trade trends continue, Guangzhou told the China Economic Development Forum.
Last year, China's export volume trailed US exports by less than $70 billion, while the pace of export growth was 7 percentage points faster than that of the US. If that growth continues, China's exports could exceed US exports by $50 billion this year, Yu said.
Chinese customs statistics show that the country's foreign trade volume reached $980.9 billion in January-June, up 23.3 per cent from the same period a year ago. Of this, exports grew 27.6 per cent to $546.7 billion, and imports grew 18.2 per cent to $434.2 billion.
Meanwhile, China's quality watchdog has warned that the country's failure to improve the quality of some of its exported goods was undermining its trade strength.
"We may have entered the ranks of the big traders, but we're still far, far from being a strong trade power, and the fundamental reason is that our product quality competitiveness is not strong," the People's Daily quoted Li Changjiang, head of the General Administration for Quality Supervision and Quarantine, as saying.
Concern over potentially tainted products made in China has resulted in recalls or bans on such goods - from Chinese toothpaste to toys and pet food. (See: Recall of Chinese toys has lead to factory closures: China Toy Association)
His comments were reported a day after China said it would send officials to the United States this month and next to cool worries stemming from a series of scandals over tainted exports, from toothpaste to pet food and toys containing lead paint.
"Quality is a symbol of national strength," Li said. He also called for tougher regulation of manufacturers and exporters.
Sunday, August 5, 2007
India to beat US, Japan by ’50
Another Study Ranks Bric Nations As Top I-Destinations
Emerging economies, including India, will overtake the developed countries in economic growth by 2050, with the popularity of India and China as investment destinations is rising while the attractiveness Europe and North America is slipping, says a study.
“The seven new global powers by 2050 will comprise the so-called Bric economies (Brazil, Russia, India and China) together with Indonesia, Mexico and Turkey,’’ says the Ernst and Young European Attractiveness Survey 2007.
These seven emerging countries would overtake the economies of the G7 countries—Britain, Canada, France, Germany, Italy, Japan, United States—in terms of GDP but whether India can develop its infrastructure at pace with that of global investment remains to be seen, the survey added.
Earlier in January, a Goldman Sachs report had put India second to China and ahead of the US in its ranking for the top economy in 2050.
The developing economies will outdo the G7 if they manage to mend the loopholes regarding transparency, fairness and infrastructure development. India’s popularity is rising as 26% respondents said the country is among their top three preferences in 2007 whereas the figure was just 11% in 2004.
The survey highlights that with intensifying competitive cost pressure, companies across the world would resort to offshore services and manufacturing to lower cost and higher growth economies such as China and India. One company in five intends to relocate all or part of its European activities outside the region and for this they look forward to the Asian countries.
“China attracts the interest of 50% of respondents currently undergoing a relocation search, while India is considered by 30% of voters,’’ the survey said. Europe’s attractiveness for foreign investors declined significantly in 2007, though it has managed to maintain its lead as the most attractive global investment region, the survey says.
However, the survey cautions that the mature economic markets in Europe are losing their hold on investors as the emerging economies of Asia gain further momentum. This change in foreign investor interest towards Asian countries is because of high skilled labour power, cost effectiveness and good ground for research and development (R&D) activities.
Asia has shown a significant gain and narrowed the gap with Europe and in the list of preferred regions China has moved up to the second position this year, while India has attained fifth position in the league.
Western Europe tops the chart with 55% respondents naming it as one of their most preferred business locations followed by China which received the vote of 48% respondents, while India managed to hold on to the fifth position with 26% decision makers voting in its favour, the survey said. Central and eastern Europe grabbed the third position (39% vote) while the United States and Canada shared the fourth slot with 38% respondents voting in their favour for the preferred location for investments.
The global business world has become increasingly multipolar, the survey said adding that “the attractiveness of the traditional top ranked regions of Europe and North America is giving way to a rise in popularity of India and China’’.
Emerging economies, including India, will overtake the developed countries in economic growth by 2050, with the popularity of India and China as investment destinations is rising while the attractiveness Europe and North America is slipping, says a study.
“The seven new global powers by 2050 will comprise the so-called Bric economies (Brazil, Russia, India and China) together with Indonesia, Mexico and Turkey,’’ says the Ernst and Young European Attractiveness Survey 2007.
These seven emerging countries would overtake the economies of the G7 countries—Britain, Canada, France, Germany, Italy, Japan, United States—in terms of GDP but whether India can develop its infrastructure at pace with that of global investment remains to be seen, the survey added.
Earlier in January, a Goldman Sachs report had put India second to China and ahead of the US in its ranking for the top economy in 2050.
The developing economies will outdo the G7 if they manage to mend the loopholes regarding transparency, fairness and infrastructure development. India’s popularity is rising as 26% respondents said the country is among their top three preferences in 2007 whereas the figure was just 11% in 2004.
The survey highlights that with intensifying competitive cost pressure, companies across the world would resort to offshore services and manufacturing to lower cost and higher growth economies such as China and India. One company in five intends to relocate all or part of its European activities outside the region and for this they look forward to the Asian countries.
“China attracts the interest of 50% of respondents currently undergoing a relocation search, while India is considered by 30% of voters,’’ the survey said. Europe’s attractiveness for foreign investors declined significantly in 2007, though it has managed to maintain its lead as the most attractive global investment region, the survey says.
However, the survey cautions that the mature economic markets in Europe are losing their hold on investors as the emerging economies of Asia gain further momentum. This change in foreign investor interest towards Asian countries is because of high skilled labour power, cost effectiveness and good ground for research and development (R&D) activities.
Asia has shown a significant gain and narrowed the gap with Europe and in the list of preferred regions China has moved up to the second position this year, while India has attained fifth position in the league.
Western Europe tops the chart with 55% respondents naming it as one of their most preferred business locations followed by China which received the vote of 48% respondents, while India managed to hold on to the fifth position with 26% decision makers voting in its favour, the survey said. Central and eastern Europe grabbed the third position (39% vote) while the United States and Canada shared the fourth slot with 38% respondents voting in their favour for the preferred location for investments.
The global business world has become increasingly multipolar, the survey said adding that “the attractiveness of the traditional top ranked regions of Europe and North America is giving way to a rise in popularity of India and China’’.
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