India to speed past UK in VC investments by 2009: report

NEW DELHI: 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 rates persist, 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.