 My flight over, I happened to be reading an Indian magazine called Business Standard, and I read this article about how India is going to go from 800 startups a year to 2,000. I was based on an interview with Ravi Gurraj from NASCARM, and I was sitting there wondering what is wrong over here. First of all, 800 startups is about as many startups as in Santiago, Chile today. The whole country has 17 million people. Santiago is a tiny little city, and NASCARM is getting excited about 800 startups, and his forecast is by the year 2020 we'll have 2,000 startups. If that's all this country can do, it's a serious trouble. So I'm going to tell you why I think that NASCARM is misguided and why the future is much different than most people think it is. But let's start off by talking about some of my research, because I've been researching Indian education, Indian engineering, and so on for the last seven or eight years. And when I started researching it, my conclusion based on looking at the education system was that India should be imploding as a tech center, that it may have been lucky that it built an IT services industry, but it has no future. That's what my conclusion was. I looked at the engineering degrees at a bachelor's level, pathetic. Masters, pathetic. PhDs, even more pathetic. So every bit of data I looked at at Indian engineering education was bad. Then I looked at the quality of education, awful. Yet after coming here two or three times with a team of researchers from Harvard and from Duke, we were blown away with what we saw, that despite everything, despite the education system, India was rapidly becoming a technology center, that it was not only an IT which everyone knew about, it was also in pharmaceuticals, aerospace, consumer appliances, semiconductors. Everywhere we looked, there was innovation happening. It didn't make sense. That India was racing ahead despite its weak education system and its graduation rates. And when you look deeper at the engineering system, half of the output of the university is unemployable. The IT has only graduated about 5,000 engineers in those days. Now it's up to 7,000 engineers. And if you looked at the hiring, they were hiring more than the entire output of India's education system. This is a long story, but what we learned was that what India had done was to learn the best practices of American companies, of Western companies, and perfect them. The disciple became the guru in workforce development, that it had done its magic, its jogad, and figured out how to take everything that's wrong and make it right. So that in a nutshell is what I learned. And we looked at the outsourcing industry as a whole. And it was remarkable that the turnover rates were amongst the lowest in the world in the IT services industry. Even India believes that its IT turnover is high. It is not amazingly low. And this is what has given India its advantage that it built an IT industry and trained millions of people. Now let's go to America. Because then after looking at India, I started looking at American advantages and why America is so successful. Why is the Silicon Valley the only innovation center in the world that's thriving the way it is? What we documented was that the magic of Silicon Valley is foreigners, is immigrants. That 52% of the startups in Silicon Valley were founded by immigrants. India and somehow were dominating Silicon Valley. Roughly one out of seven startups in Silicon Valley were founded by immigrants. So people who couldn't be entrepreneurial here went to Silicon Valley and started its companies. 6% of the population started 15% of Silicon Valley startup companies, mind-blowing. It was amazing what we saw there. They were filing patents, they were innovating, they were contributing to the ecosystem. They were building incredible wealth. And this is the magic of Silicon Valley, that you have this melting pot of people from all over the world coming in there, making the natives work harder, making the country more competitive and uplifting the world with the amazing technologies they create. This is what we learned. And then here's the stupidity of America, that it has a flawed immigration system. It kept bringing wave after wave after wave of people in on H-1B visas, abusing them in dentured servitude. H-1B visas are the worst visas America could have invented because they bring people in, they train them up on everything American and then say, okay, go back and leave us alone. Go and compete with us. That's why you're getting all these amazing companies in India. So they started going back. And when we looked at the profile of the people that were going back, those are exactly the people that any country would die to get. Young, highly educated, highly motivated, highly trained engineers, scientists, all across the board, they were all going back. So this is America's gift to the world. And then I started studying U.S. entrepreneurship, what makes an American entrepreneur tick. And contrary to this nonsense you hear about the young, I mean, the Silicon Valley VCs, they are completely out of touch with reality. The investors, they're completely out of touch with the way the world really works. They think that young kids who create the startup companies, false. The vast majority of successful startup companies in Silicon Valley and in the United States are created by people who are middle-aged. Much more like the profile of people in this room than the kids that you see in the tech blogs. The tech blogs also are anomaly. Don't take them too seriously. They're just a strange set of people writing strange sort of articles. The majority of America is a lot more balanced than you read in the technology press over there. The average entrepreneur is 39 years of age, married with children. It's not these young college dropouts who dominate the tech industry. It's people like you. They're well educated. Another interesting thing that even though I've been in several elite colleges, it isn't the elite colleges that give you the advantage. It isn't the IITs that give you the advantage. There was a myth that Silicon Valley was founded by IITians. It's complete nonsense. IITians contributed to Silicon Valley and they set up their own mafia, but IITians are a tiny proportion of the startups in Silicon Valley. It doesn't matter where you go to school. What matters is your motivation and your ability to execute. That's what makes you successful in entrepreneurship. Why do Americans become entrepreneurs? It's very simple. They get tired of working for others. They have some great ideas and they want to make an impact before they get too old. This is why Americans become entrepreneurs. This myth about venture capital dominating, it is just that. The vast majority of startups in Silicon Valley in the USA don't take venture capital. In fact, only about 11% of startups take venture capital in any state of their existence. The VCs put money into the company successful and then they claim credit for everything that the company has ever done since the beginning. That's not how Silicon Valley works. In India, everyone complains about lack of venture capital. It doesn't matter. There isn't venture capital there either. Success comes from experience, management, and luck. That's essentially how entrepreneurs in the USA work. Now let's look forward and let's see where the industry is headed. There's something I've been researching because there's a myth that innovation is dead. There are moguls in Silicon Valley who argue that innovation has peaked, that the world has run out of ideas, doomsday. And then people worry about overpopulation, lack of energy, about pandemics, and the world coming to an end because innovation has peaked. Complete nonsense. This is the most innovative period in human history. If you look at the chart of how technology is advancing, it isn't on a linear basis. It's exponential. I'm going to explain to you what exponential means because we're human beings. We think linearly. We do what Ravi Guruaj did from NASCARM, that we look at last three or four years of data, draw a straight line, and assume that's what it's going to be like in 2020. This is why NASCARM is so wrong about what's going to happen to India because technology is moving like this. It isn't moving linearly anymore. And here's the difference between linear and exponential. If I ask any of you to tell me how far 30 steps is, you'll guess it's about 30 meters or so. We can estimate how far 30 steps is. If I ask you to estimate what 30 exponential steps is, there are only a few geniuses in this room who really understand what that means. 30 exponential steps is a billion meters. In simple English, a billion meters is 26 times around the planet. That's how technology is advancing. We have seen the progression of Moore's law. You remember in the old days, about 30 or 40 years ago, how America protected its computers. They had these crazy supercomputers, which could not be exported to India. Well, guess what? Your smart phones are more powerful than the crazy supercomputers were. You carry them around in your pocket, checking SMSes, making occasional phone calls, maybe tweeting. That's all we do with these supercomputers sitting in our pockets. No export controls. No one cares. This is how computing is advanced. This is a chart put together by Ray Kurzweil, who's the greatest futurist of our time. He estimated that what you get for $1,000 in your computers, as of 2010, for $1,000, you get roughly the computing power of a mouse brain. By 2023, we'll get the computing power of a human being. By 2050, for $1,000, we'll get the computing power of all of humanity combined. This is mind-blowing when you think about what I just said over here, that within nine years, your smart phones will have the same computing power that you do. There are disputes about whether Moore's law will hold up until 2050 or not, but no one I've spoken to has ever disputed that Moore's law will hold up until 2023, which means that your smart phones are now going to have the same processing capacity that you do. The advantage that your computers have is that they're networked together. They communicate at gigabit speeds. We communicate in slow motion. They share knowledge. We don't. So it's scary to think what's going to happen with it, but a lot of good things also happen. Now, here's the interesting thing, that every other field that becomes information technology goes exponential. So artificial intelligence, medicine, robotics, 3D printing, synthetic biology, all of these technologies are also not going exponential because they're becoming information technologies. And guess what India has specialized in for the last two decades? Information technology. I think you'll understand where I'm going. Start with the advances in sensors. Remember these old devices we had? The digital camera, the first digital camera came out in 1976. That wasn't so long ago. I think Sholay was still playing in 1976. Now, the same camera is a billion times better. The first camera in 1976, the digital camera, weighed four pounds. It cost $10,000 and it was a whopping 0.01 megapixels. Today, what you have in your pockets is a billion times better between Sholay and PK. That's what we've seen over here. The ICBM units, the nuclear missiles that they had these ICBMs in them. Guess what? They're little tiny chips in your smartphones, which cost about a dollar. GPS says the first GPS commercially available came out in 1981. $120,000, they weighed 50 pounds. Today, it's a tiny little chip in your phone and I have three GPS apps on my smartphone. This is the advance that has happened. These are micro-electromechanical systems, MEMS-based systems. What's happening is that the circuits are getting more powerful. The footprint is falling. Prices are dropping exponentially. This is what is making all of this technology possible. And already, there are a whole range of amazing MEMS-based devices, including in India. For us, health is in India. The Swasta Slate is being tested in Jammu and Kashmir. Amazing technology advances that are happening in India at the same pace as they're happening in Silicon Valley and everywhere else in the world. This is what's becoming possible. In fact, if you take your smartphone apart, don't do it until unless it's really broken. But if you open it up, you'll see that it has sensors in there. It has processors in there, which would have cost hundreds of thousands of dollars and weighed tens of pounds just 20 or 30 or 40 years ago. This is what you carry around in your pockets. Robotics. When I was young, I used to dream about having a robot cleaning up after me. I used to watch Astro Boy. I dreamed about all these robots. I thought by the time I'm a little bit older, I'll have robots serving me. And what did we get? In the US, we have Roomba, which is a stupid vacuum cleaner. Why didn't we get these sophisticated robots we dreamed about? Because the computing power required to do voice recognition, face recognition, would have required a supercomputer. Sensors would have weighed hundreds of pounds. And guess what? You've got them in your pocket right now. And this is the DARPA challenge in which you're developing humanoid type of robots. There are dozens of teams competing to build humanoid robots. This is what's become possible right now. And guess who else is doing it? Children. But today, as of today, it's cheaper to manufacture in the United States, India, Europe than it is in China because of robotics. Robots cost practically nothing now. Industrial robots have worked 24-7, and they can do the same tasks that human beings can do. Children have had their contest all over the United States to build sophisticated robots. So the question is, if children in remote parts of the United States can be building robots, why not the geniuses who've come through the ranks of Indian engineering? You could be building the most sophisticated robots in the world. Here, you could be building Rosie here. You could be building all these robots that we've dreamed about when we were young. It's all possible right now. AI, artificial intelligence. My colleague Neil Jacobsen speaks very elegantly about it, but AI is everywhere. It's making amazing things possible, including IBM Watson, which can now analyze disease better than oncologists can. It's also learning about every other field of medicine. So now you have a computer system that's widely available to anyone in the world, which can do sophisticated medical analysis and data analysis. These tools are going to be commonly available over the next two or three years. Google, Microsoft, every large technology company will be offering AI-based tools in which you can start taking the massive amounts of data that are available and analyzing them. Imagine India's IT workers now getting into big data analysis using Watson. This is possible as of today. And then there's the human genome, the most amazing innovation of all. It cost about $3 billion 14 years ago. Now you can get an entire human genome for $1,000. The rate at which it's progressing within five years, it'll cost practically zero to get a complete human genome sequence. And this is important because this means that humans have also become software. They've also become IT systems. So the same IT system that you're building in your companies, working for the Indian companies, you can now apply to human health. Next 10 to 20 years, we're in this era of genomic medicine, where you will be prescribing medications based on the genome. It's all a matter of analyzing data and building IT systems to now conquer health. 3D printing, have a look at how powerful and how amazing they are. You can print plastic glass titanium human cells with 3D printers. And the beauty of 3D printing is that you can design anything you like. You can come up with the most sophisticated artisms, can't design some of the things and develop some of the things that your children can right now using an iPad and a 3D printer. This is something anyone here can do. AutoCAD, they're AutoCAD factories, shops all around India. Well, guess what? With those design tools now, you could be developing the most sophisticated products for Western companies. In the 20s, this is what's going to happen. We're going to have the robots going on strike because the 3D printers are taking their jobs away. And also my prediction, within this decade, within a decade, China's manufacturing industry is toast, which means burnt out. India's call center industry is toast. These industries are disappearing. And this means that major opportunities. Every time there's disruption, problems, there are opportunities. India has lots of problems, which means there are lots of opportunities to build trillion-dollar industries over here. Look at the evolution of desktops and notebooks or tablets. That line I drew is my line. Probably within four to five years, there'll be half a billion new people coming online in India. You're going to have smart phones now everywhere. You're going to have an internet revolution that's going to make the dot-com boom in the United States look like it was picnic. I mean, India is going to be automating and re-automating itself like you have never imagined before. You're going to have an app economy no longer software. These IT services and these IT systems, forget it. They're yesterday's news. The future is all apps. And guess who's going to be building apps? Millions of Indians are. My prediction, and put this in the context of what I was talking about, of NASCARM, that there won't be 2,000. There'll be tens of thousands of entrepreneurs building world-class systems to solve big problems. There are going to be hundreds of thousands of app builders. Every local community, every village will have people. Just like you have these shops that repair iPhones, repair smartphones. They're going to be writing apps. So you'll have your fruit seller now having an app on a smartphone to manage inventory. He'll send Banji an SMS with a photograph of his produce and he'll be delivering fruit to her and automatically billing for it on his Aadhaar-based ID system. You're going to have now app builders all across the country using it for solving problems, for reporting corruption, for building infrastructure using these technologies. You're going to have millions of internet businesses, not thousands. You're literally going to have millions of internet businesses because those fruit sellers are now going to become internet businesses. They will now have websites, your Hawaii stores, your sweet stores, will now have their inventory online and they're going to be processing the sales of their Metai using smartphones. They'll simply have sensors in their shelves which automatically replenish inventory so you can be home and just say, I'm coming over to pick my Metai up and automatically it'll update inventory and it'll get updated. All in the next 5 to 7 years. You're going to have millions of internet businesses and billions of people all over the world benefiting from Indian innovation because it's going to happen over here. And it's Indian entrepreneurs who are going to make this happen because as the IT services industry becomes toast, as people get fed up of working for their masters, this is why I showed the slides on entrepreneurship. The same dynamic is at Play in India. People are going to get fed up of working for the IT companies. They're going to become entrepreneurs. They're going to transform India and the rest of the world. Watch it happen. Thank you, everyone.