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India's Fresh Chance for Innovation

By Manjeet Kripalani Indians beamed with pride last year when the Massachusetts Institute of Technology announced it had selected the subcontinent as the home for its first Media Lab in Asia. Launching this high-profile pilot project was a vote for India's brainpower over other Asian nations. America's best technology brains from academia would work with local talent to bridge the digital divide between the rich and the poor.

Multinational companies, which supported the MIT project in the U.S., would follow and invest in the India version, too. The dream: India's Media Lab would be a showpiece for one of America's most innovative learning institutions, something to replicate in other parts of Asia as well as in Africa.

Alas, the dream collapsed in New Delhi in early May. MIT announced it was withdrawing from the project, following a private meeting between MIT professor/author Nicholas Negroponte and Arun Shourie, India's new Information Technology & Communications Minister.

ANOTHER BLUNDER? Afterward, Shourie revealed that the Indian government hadn't renewed the partnership contract in March. Negroponte pointed the finger at Shourie, blaming the collapse on the fact fact that India has a new Minister for Technology (the project had begun under the auspices of the previous Minister, who was relieved of his job early this year). "The change carried a number of unilateral

decisions which made going forward impossible as a joint venture," says Negroponte. The development was front-page news across the country. Back in the States, even The New York Times lamented MIT's departure.

On the surface, it may look like another blunder courtesy of India's hidebound governmental ways. But look again. Behind the drama and accusations is a tale of unmet expectations on both sides. What really transpired was that Indian projects never got any outside funding, so new research went wanting. And MIT never could pull in funding from multinationals -- or from Asia's own tech giants, for that matter.

In fact, Media Labs Asia ran for a year solely on the $13.5 million seed money provided by the Indian government, with MIT contributing nothing yet calling the shots on the lab's project, say insiders. Much of the money went toward paying the lab's staff, as if they were international civil servants.

NO BIG HELP. As for the projects, most of them existed before MIT came along, with work under way at the highly regarded Indian Institutes of Technology (IIT). Experiments in translation of Indian languages, for instance, was being carried out at the IIIT, a new information-technology institute in Hyderabad. New software projects which work on the Simputer -- a cheap, handheld computer -- had already begun in Bangalore, developed by researchers at the Indian Institute of Science. And Pravin Bhagwat, a professor at the Indian Institute of Technology at Kanpur and a former IBM and Bell Labs researcher, had pioneered work on a rural Wi-Fi project.

Few MIT professors visited the labs at any of IIT's branches, say students and professors at the institutions. "MIT didn't add much value," says a source close to the project, adding that the incident has taken some of the global techno-luster off the venerable Bay State university.

MIT's plan of getting funding for India was flawed from the get-go. Multinationals like Microsoft (MSFT), Intel (INTC), and Cisco (CSCO) already have huge research and development operations in India, so they likely saw little value in sponsoring other research projects that don't relate directly to their businesses.

EARLY TROUBLE. Besides, IIT-Kanpur's Bhagwat says few incentives exist for large multinationals to invest in technologies for mass use in countries like India, since they aren't big money-spinners. Such efforts, he says, will have to come from within India's scientific research community, and Indian entrepreneurs will have to support them with a winning business model that works for poor economies.

The first signs of trouble was the cancelation of the MIT Media Labs Asia board meeting, scheduled for April in New Delhi. MIT had planned the meeting around a demonstration of one of its promising joint projects -- rural Wi-Fi telephony stretching across 25 kilometers in Uttar Pradesh, one of India's poorest states.

Shortly after the canceled meeting, however, the IIT professors whose job it was to oversee the projects declared that MIT added no value in research or in corporate sponsorships. And it was revealed that MIT asked the Indian government to pay $1.7 million for the use of the MIT name. That was perhaps the last straw.

SNATCHING VICTORY? For now, Shourie's ministry retains the Media Labs Asia name. It has sacked the staff and moved the shell project under its own auspices, to be run by still-to-be-appointed ministry officials. That may not be the best idea, given India's struggles with strangling bureaucracies.

And while Negroponte says Shourie has "made some allegations which are preposterous and totally new," India's tech community is standing behind Shourie, who's known for his extensive experience and honesty. Last year, he donated $2.5 million in discretionary funding he receives for serving in Parliament to build a biotech facility at IIT-Kanpur. He thinks India can emerge as a global player in biotechnology. "My respect for Shourie has increased enormously after this," says a senior researcher at IIT-Kanpur.

India could still turn this bitter breakup into a victory. MIT is discussing the establishment of another Media Lab Asia with countries such as Singapore, Korea, and China. But in India, the incident has refocused the country's attention on R&D, and some Indians are hoping that it could encourage the establishment of a domestic version of Bell Labs. It has also brought public attention to the technological innovations done in small corners of India, like Wi-Fi and geographic-information mapping systems that could greatly ease the hard lives of rural Indians and help make administration of these areas easier.

What's clear is that with little or no support from multinationals, poor countries such as India will have to develop suitable new technologies and innovatively adapt existing ones to solve their own problems. That will put other nations on the path to progress, too. Same mission as Media Labs, but with a more home-grown flavor. Kripalani is Bombay bureau chief for BusinessWeek

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