Just a year ago, I wrote a controversial column called "The Coming Death of Indian Outsourcing." In it, I pointed out that India was eroding its cost advantage with ballooning salaries and not paying attention to innovation.

Since then, however, the financial crisis has halted the pace of cost escalation. But a different devil has given India a whack on its face: Satyam's scandalous implosion, which has smeared India Inc. All in all, India's outsourcing industry is facing tough times.

But what about Indian innovation? What about entrepreneurship?

These are two separate concerns, and we must acknowledge that the technology outsourcing industry, with its billionaires and mega brands, has successfully yanked India out of the "must work for the government" mentality. Centuries of colonization had bred a "servant" mentality; "business" was a dirty word, but "service" was prestigious. Middle-class Indian families preferred their kids to bag secure, well-paid jobs rather than take the risk of starting something of their own. Quite the opposite of Silicon Valley, where entrepreneurs are the coolest kids on the block.

But Narayan Murthy of Infosys made the leap and became the poster child of the Indian information technology industry, spawning thousands of entrepreneurs who started similar outsourcing companies. Numerous small, mid-sized and large IT outsourcing companies dot the corporate landscape of India today.

In the process, however, millions of people found another option for secure servitude: working for those outsourcing firms, earning big salaries, doing mediocre work. This has had a remarkably damaging impact on several generations of Indian talent over the past 20 years.

After I wrote my infamous column, I received an invitation to write something for the students of Indian Institute of Technology (Kharagpur), with my thoughts on where the new generation ought to focus. In "An Open Letter To IIT Students," I urged India's best and brightest to look at innovation and entrepreneurship as their path forward.