One year and thousands of dotbombs later the only social shift visible is the increasing penetration of irritating buzzwords into our lives. And the only lesson from last year is that Indians, sadly, lack originality: proliferating Indian websites are indistinguishable and have little innovative content or products. But for a while we had our moment in the sun and we even managed to fool the West. The international media was last year flush with stories on India's new generation and its entrepreneurial vigour.

Business Week in 1999 featured a success story about a 16-year-old girl in UP who is "ambitious, technology-oriented, and confident". Her great idea: she bought a cellular phone and started her village's first public telephone. That's the height of our novelty.

In keeping with its style and history, India has even turned upside down the one sure expectation from the Internet: that it would remove many middlemen.

The opposite has happened. The mindless B2C stampede has added a whole new army of shopkeepers and kirana merchants. Even for a country skillful in linguistic obfuscation, 2000 saw the victory of style over substance. Here is a sampler of some popular buzzwords from the dotcom community: eyeballs, sticky eyeballs, business value acceleration, revenue models, profitability models, angel investors and incubators. CII mandarins, very good at this type of PR, must be looking wistfully and enviously. Behind all this irritating jargon and hype lie two simple realities, perhaps sadly lost forever to a whole generation of our graduating youth: 1) success in any business comes from offering a real product/service that people really need at a price cheaper than the alternative and in a way which makes life more fun and convenient, and 2) there is no corporate success story, repeat, not one, built solely on technology or an overnight rags-to-riches formula.

The world's most enduring and remarkable corporations may have required ignition by a novel idea, but this was overlaid with hard work, continuous improvement and extreme sensitivity to internal detail and customer care.

Jack Welch's GE, Percy Barnevik's ABB, Jan Carlzon's SAS - they are all testaments. So indeed are Sony, Microsoft and Oracle, more recent examples from the technology age.

2000 will also be known for the redemption of the Greater Fool Theory. This is how it works: dotcoms with connections or a clever line somehow entice incubators, who then bring in well-known venture capitalists (VCs) at a big markup, who then attract second- and third-round financiers at a higher price. All these financiers then take the company public for a big return all around. The greatest fool of course is the small investor.

Robert Shiller, a reputed professor of economics at Yale, had warned about this in his 1999 book, Irrational Exuberance, citing the infamous Charles Ponzi who defrauded thousands of US investors in the 1920s with a bubble-bursting get-rich-quick scheme. More recently, Albania lost a good fraction of a year's gross national product via a Ponzi-like scheme, which eventually burst and led to riots and resignation of the government.

American VCs, fuelled by pompous claims and a brash attitude, have lost billions betting on crazy ideas and are now on a climbdown. The respected Silicon Valley magazine, E-Company, has a lead article in its latest issue on `My Hunt for America's Dumbest VC'. Draper, Idealabs and Carlyle make it to their honour list.

Thankfully, the money lost by these and other VCs was mostly American. But the damage they caused to India is graver. Smug under the global IT/Internet limelight, India lost a precious year in wayward economic policy, diffused focus and sliding momentum of real reforms. Such was the lure of the dotcom mirage and potentially billions of venture dollars that very little attention was paid to attracting investment in key infrastructure areas or on privatisation or on re-hauling public sector banks.

No doubt the Internet is great and at a minimum it will become a vehicle for greater empowerment and transparency, but what India needs urgently are water, power, roads, education and healthcare. India foolishly allowed itself to be duped by foreign VCs who rushed in with transplanted business models and a robotic faith in applying the Internet to everything in life.

We may long repent this. The end result is that one year and many dotbombs later, India is about to register its lowest FDI inflows since 1994. This perhaps is the true digital divide, between rich countries who can afford to play around with billions of dollars on untested ideas and those who cannot.

Mr Agrawal is an analyst of Indian political and business trends. He is the editor of India Focus, a political risk report for international investors