Just as a report comes out confirming the obvious- that SMEs in India have a hard time performing because they don’t have the funding they need- Business Today declares (subscription required) that the private sector is picking up the slack, with record venture capital flooding the country.

The article is a bit lengthy, but well worth the read as it explores one of the most important current trends for Indian business. In this climate, 44 American VCs are looking to invest around $4.4 billion in companies- money that will almost certainly be forced to move outside of the traditional IT sector to develop budding industries including green technology and education.

Ethan Zuckerman, a fellow at the Berkman Center for Internet and Society, reports on the state of African connectivity development, which remains hampered by very high costs. In West Africa, for example, connectivity costs more than 66 times as much as it does in the United States--$8 per kbps versus a typical cost for US universities of $0.12 per kbps.

But Zuckerman also suggests 4 areas where Africans are leading the rest of the world:

- Narrowband - innovative connectivity solutions that use very little bandwidth, like the Ghana “Javelin” project

- Localization - Translation of open source software into a wide variety of languages, especially through the help of organizations like Translate.org.za.

- Radio - Use of community radio for information dissemination, integration of data and radio in projects like Geekcorps Mali.

- Urban wifi - with huge wifi networks in Accra, Bamako and other African cities.

I would add one more to the list—financial services over mobile phone networks. Celtel was an early pioneer with Celpay, and Wizzit in South Africa has been among the most innovative in this space, along with Smart and Globe in the Philippines.

It is remarkable, as Zuckerman points out, that Africans are able to innovate around myriad regulatory and price barriers to lead in these areas. That suggests the question: what is the comparable list for other developing regions?