New ideas," wrote science fiction writer arthur C. Clarke, "pass through three phases: 1) It can't be done, 2) It probably can be done, but it's not worth doing, and 3) I knew it was a good idea all along". Everybody loves to take credit for an idea that succeeded. But try getting investors to put money behind an idea that only exists on a powerpoint slide. It will be nigh impossible to go beyond answers 1 and 2. Why do investors fear funding new ideas? Simply because they are risky and for every one that works, another nine don't. Therefore, so far this year, we've had an estimated $1.6 billion come into India by way of private equity money, but a bare 10 per cent will find its way into start-ups. That means dozens of potentially good ideas in India will never get funded, and those that do get kickstarted with the entrepreneur's own money, will struggle for years to reach a critical mass.

An economy that hopes to grow faster than its six or seven per cent annual rate, can't afford to let this situation prevail. It's time we realised that entrepreneurship isn't about ideas alone, and much less about availability of money. It's a complex process where bold ideas come together with easy money-relatively, at least-to create an enterprise that delivers far more value than either the entrepreneur or the investor had expected. Things like culture, governmental policies, and efficient financial institutions play a crucial role. If India suffers, it's because a lot is desired of the "system". For a minute assume that you are a venture capitalist. After much trouble, you've raised a fund for India and want to invest it. How do you go about it? Should you wait for wannabe entrepreneurs to approach you or should you go out seeking winning ideas? If you adopt the former tack, then you may be missing out on better ideas. And if you opt for the second route, then you'll need an army of employees, and still manage to do just a handful of deals a year.

In this context, it is interesting to look at the Monitor Company Group's 2003-2005 Entrepreneurship Benchmarking Initiative, which attempts to benchmark the entrepreneurship policies of various countries. Unfortunately, the study doesn't include India (yet), but it is enlightening for what it reveals about other nations. Among the key drivers are incentives for innovation, access to capital, perceptions of risk and reward, and culture for risk-taking and innovative thinking. Unless India attacks the entrepreneurship issue on all those fronts, the daring few will necessarily face an uphill task.

Keep On Rockin' In The Free World

Brokers: 10,000 anyone?

It's that time of the year when foreign institutional investors (FIIs) are expected to plunge into redemption mode, primarily because it's such selling sprees that will determine the tubbiness of their bonuses when they're appraised at the beginning of the new year. That's mostly hogwash, of course, as most fund managers would be appraised on the basis of their funds' net asset values and not on the quantum of their sales. That the year-end redemption fairy tale is a myth is actually reflected in the performance of the Indian markets' benchmark index-the Sensex-in the year-end period, typically between November and February. Do a quick check of the Indian stockmarket's showing in this period over the past decade and you'd discover that no matter what year's prevailing mood was-even bearish-the Sensex invariably gained during those four months.

The November of 2005 hasn't proved too different-after slipping into a correction, which saw the Sensex losing 8-9 per cent from its pre-Diwali peak, it's once again party time on Dalal Street. At the time of writing, the 30-share bse index was within sniffing distance of the never-achieved target of 9,000. Now if the year-end routine does play out as it has done in the past years, the Sensex should be comfortably in the 10,000 zone pre-Union Budget time. The reasons for the no-holds-barred bullishness at the turn of year could be many: Corporates are expected to deliver better results in the last two quarters than in the first two (because that's when the growth numbers of the festive season kick in), government is expected to get its reforms act together in the run-up to the Budget, and then there's that psychological perception that a massively hungover bunch of FIIs will come back to the market, loaded with moneybags of fresh allocations for Shining India (or for any other market for that matter).

For those allocations to come-and the timing needn't necessarily coincide with the beginning of 2006-will depend on what stance the FIIs take on India in the new year. If it's overweight, you can expect 2006 in liquidity terms to be even better than 2005. But given that domestic valuations look stretched vis-à-vis most other emerging markets, that eventuality appears iffy. Clearly smart double-digit earnings growth for the third quarter, as well as some brave initiatives on the reforms front are needed to sustain the liquidity story. Both look immensely possible. There's just one niggling worry: Those naughty hedge funds managers, whose bonuses are directly linked to the profits they book (unlike in the case of the normal mutual funds). Now hedge funds are estimated to account for 35 per cent of the FII money that's coming into India. Could that just about spoil the new year party on Dalal Street?

The Politics Of Semantics

Who's better: One's a success; the other a deferred success

Why should we call a spade a spade? Hand-held earth-moving equipment may be a better definition. That hypothetical argument sums up best the recent trend to sanitise words and terms because someone could find them objectionable. For instance, brainstorm was a perfectly honest word until someone ventured the opinion that it could be offensive to people with brain disorders such as epilepsy. The substitute being proffered is thought shower (or word shower), but somehow this lacks the cadence and the power of brainstorm (Try using it in a sentence and the difficulty becomes clear). There are hundreds of other such, including deferred success, a term that educationists suggest should replace failure. This, they argue, will enhance the self-esteem of students who are, well, deferred successes. Political correctness is fine; only, when practiced in the extreme it is accompanied by some amount of naiveté. It assumes that words can make things alright, thereby bestowing them with a power that they do not really possess. And it conveniently ignores the fact that the first few terms that had to be changed because they could be considered offensive (think negro or black or coloured) were, in reality, coined or used to highlight difference (and thereby support discrimination). The same thing cannot be said of a word such as brainstorm. As for any efforts to replace the term failure with deferred success, it reflects a dangerous tendency to discount intellectual capital entirely and disregard the principle of meritocracy. Fact is, much of the offense in terms such as brainstorm is imagined (and more often than not, by people who aren't the 'perceived' victims). At a time when the world is trying to move towards plain English, we could do with a little less political correctness.