"IT companies must innovate to beat US outsourcing curbs"
For a moment, let us imagine that we are US citizens, and also acknowledge the fact that we still haven't grown enough to seek "Universal Fraternity", and are mature enough only to reach only a nationalistic feeling ( with forced efforts of course).
So, what would I want to do when more than half of the jobs which could employ my own fellow countrymen are being directed to another country where labor is cheap, so that the monopolies make more profit, with an addendum of tax evasion. I wouldn't happily let it go, even if I were the USA.
Now, let us get back to being Indian citizens. We very well know what the IT has given - Accelerating disparity ( ubiquitous vistas of IT parks adjoined to slums!) and a mediocre and servile work force (no apologies on this rudeness), which seldom gets opportunity to do anything new with the "Please the (their) customer motto". This being the harsh truth, not all of us want to see what has become of a couple of generations of youth in India. Entrepreneurship is discouraged and servility to monopolies is much encouraged, starting in the education system, and unfortunately has also penetrated the family system.
Also, let us look at what tangible technology IT force has returned to our own country, which meets the real needs of India. It has always been outsourced work which has been done prominently, and 'most' of that work doesn't apply to our system's realities. In fact, almost all of it is of no use in the Indian context ( we have the least developer for every 1000 individuals, only after China in the FOSS community, and we still are struggling to get a stable OS and applications in our regional languages!)
Talking about Innovation, not all innovators are mavericks who can rise out of any circumstances. When we train minds to appropriate conditions with the necessary facilitation, the number and quality of innovators will certainly increase.
Lack of innovation ( also innovation in Indian context) in the IT sector has been transparently visible to everyone for all these decades of its reign in India. Now, when US wants to curb outsourcing, you can't spontaneously transform this crowd into innovators. We should have been conscious of this from the start, and must have given more importance to "innovation to excellence", rather than using it as a back-up plan after the failure of political gimmicks.
Innovation is a trait emanating out of refined and independent minds. And, I do not want to comment on the quality of the subjects under the scan, for it is evident.
What we need is a renaissance in the work culture and a reformation in the context of the work we will be doing. And, this discovery shall lay the foundation to innovations.