An interesting article on innovation and the IT industry in India appears today in The Hindu today. Rajdeep Sahrawat, VP at Nasscom, writes that innovation is critical to Indian IT but more or less neglected because in the short term things are looking good. If necessity breeds invention, complacency kills it. Sahrawat outlines some foreseeable problems for for Indian IT: “rising wages and infrastructure costs, rapid scaling up of delivery capability in India by MNC IT firms, flattening productivity curves and a growing talent shortage”. On my visit to India in the summer of 2006, where I delivered talks on the ISmartsâ„¢ framework to senior executives at various companies including the Big-4 in Indian IT (Infosys, Satyam, TCS, and Wipro), I found that among these problems the talent shortage was the most pressing. But I also saw that the biggest driver of innovation–one that Sahrawat does not mention–was that as Indian IT companies got more involved in the business processes of their clients (especially in the USA), the innovations demanded by these clients were forcing Indian IT to, in turn, become more innovative. However, as Sahrawat says, the Indian IT industry didn’t seem to be too gung-ho about investing in innovation, and further, seemed to be a little too content to follow standard innovation paradigms rather than develop indigenous models or frameworks that are more contextualized for Indian situations and environments.