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If we're really in the new global economy of the 21st century, how come everyone talks about outsourcing as though we were stuck in 19th-century imperialism? The debate casts India and China as colonial outposts of cheap, low-level labor serving the almighty American consumer. We look overseas and see only a vast pool of white-collar workers who can answer our customer-service calls or write technical manuals that no one reads anyway. This is shaking up our economy, true, but it's not threatening our ironclad egotism: We still believe that America will remain the world's leader in innovation while developing countries can aspire only to unglamorous jobs that require less brainpower or entrepreneurial prowess.

But the talk among Silicon Valley insiders is different. Their buzz is that India and China are launching high-tech companies that will innovate brilliantly -- and will bring their creations first to consumers in their own lands, often bypassing our shores entirely. India and China are the world's most promising end markets for technology, while the United States is nearly saturated. So the real issue for the coming decade isn't whether Asia's workers will steal our high-tech jobs; it's whether their high-tech consumers will still buy our products.

The new new thing in Silicon Valley isn't even in Silicon Valley: In September, the Silicon Valley Bank, which lends to tech startups, opened a branch in Bangalore, India. The bank has led two delegations, each of two-dozen top venture capitalists, on weeklong tours of India and China. Legends such as Don Valentine from Sequoia Capital, which invested early on in Apple, Yahoo, and Google; and John Doerr from Kleiner Perkins Caufield & Byers, the moneyman behind Amazon.com, joined the June trek to Beijing and Shanghai.

They found a nascent entrepreneurial culture inspired by their own, peopled by Chinese nationals -- educated in the United States and once employed by big American companies -- who have returned home to launch tech startups. "They were as world-class as anything you'd see on Sand Hill Road," the epicenter of Silicon Valley's capitalists, says Terry Garnett, former head of marketing at Oracle and now a venture capitalist at Garnett & Helfrich in Menlo Park.

Half of Garnett's traveling companions had already invested in early-stage Chinese tech startups. One investor, Dixon Doll of Doll Capital Management, is backing 51job, the Monster.com of China -- a recruitment Web site with 6.9 million registered users. DCM has also bankrolled Apexone Microelectronics, which designs multimedia chips for the mainland's market. Apexone's management team combines Chinese natives who returned after getting a Western education with homegrown talents who never left.

"As Silicon Valley developed over time," says one venture capitalist, "it attracted more skilled people and then more good things happened. The same will happen for India."

None of the big-name Silicon Valley VCs have set up shop in India yet, but Silicon Valley Bank's Bangalore branch provides an array of open offices for them to use on scouting trips. Although there's no Asian equivalent of Sand Hill Road, it's not hard to imagine a similarly freewheeling system of venture funding eventually emerging. (Intel, one of the biggest venture investors in Silicon Valley, has already invested some $200 million in 50 Chinese startups.)