India to surpass UK in VC investment: UBS

India to surpass UK in VC investment: UBS

New Delhi: The supremacy of Western economies in venture capital (VC) investment is facing a challenge from emerging economies, with India expected to overtake the UK by 2009, a latest report sponsored by UBS, a global wealth management company, said.

As per data analyzed by ‘UBS UK Venture Backed Report—2007,’ Western leadership in innovation is being increasingly threatened by emerging economies.

According to the report, “India’s VC market with a growth rate of approximately 90% is likely to overtake the UK by 2009." The Chinese VC market has already surpassed the UK in terms of absolute size in 2006 and is growing at a much faster clip.

If the current growth rates persist, China’s VC market would overtake the European market within two to three years. India would follow suit in the next four years, said the report, titled Funding Growth in a Changing World. The prime factor behind this stupendous growth is that these countries have carved out a niche for themselves in the field of innovation.

VC 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 a challenge to the Western economies, which have to find ways to stay ahead of the game, the report said.