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TECH TALK: India’s Next Decade: World Server

April 25th, 2002 · No Comments

India is now pinning its hopes on the IT-enabled services business: If 1 million Indians can serve the world answering phones and emails in contact centres, developing software, analyzing x-rays and providing medical advice, processing insurance claims at even an average of USD 10 (Rs 500) per hour, it would add USD 20 billion a year. Nothing wrong with this picture, especially considering that we have no shortage of Indians to service the world. In fact, the latest mantra among the Indian software companies is BPO – business process outsourcing. There’s plenty of opportunity targeting the Fortune 1000 companies who are seeking to outsource to reduce costs. Falling bandwidth costs are making it easier to locate many back-office centres outside of the US, and India has emerged as a prime candidate.

Write Howard Rubin, Margaret Johnson and Susan Iventosch in SiliconIndia (April 2002) as part of a cover story on IT Sourcing:

India continues to be on top of the IT outsourcing market. The number of technical professionals in India is growing and now totals upwards of 4.5 million. The nation’s language (English), education system (IITs in addition to 1,900 educational and polytechnical institutions) and superior IT training programs have propelled it into its current prominent position.

Software has served India well in the past decade with exports touching USD 8 billion. It has helped India get recognition the way China has captured attention for its manufacturing prowess. The next spin-off from software is the world of IT-enabled services and BPO. All indications are that these sectors too will do well in the coming years. So, then what’s to worry about? After all, all our top software companies in cash and even though growth rates have come crashing down from the 100 percent a year days to 20-25 percent a year, that in itself is a great achievement considering what the tech sector has been through in recent times.

My worry is that we are following, not leading. We are being satisfied creating intellectual property for others, and not attempting to do so ourselves (other than a handful of Indian companies). The labour arbitrage and the dollars per hour model lulls us into a false sense of security. We send a mission to China which announces that India has nothing much to worry about: we are five years ahead of them. There are not enough of us exploring the new frontiers of technology, trying to envision the world of tomorrow and then working to build that. A quote from CK Prahalad and Gary Hamel’s “Competing for the Future”:

There is not one future but hundreds. Getting to the future first is not just about outrunning competitors bent on reaching the same prize. It is also about having one’s own view of what the prize isImagination is the only limiting factor.In business as in art, what distinguishes leaders from laggards, and greatness from mediocrity, is the ability to uniquely imagine what could be.

India’s is not a mission impossible. Look back 10-15 years. Japan was the top of the charts, there were plenty of self-doubts in the US about its competitiveness and China was an international pariah thanks to Tianamen Square. Today, the US is being talked of as an “empire” (like the Roman and British empires of the past), China is surging ahead to become the next big economic superpower, and Japan is in the doldrums.

Tags: Tech Talk

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