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TECH TALK: As India Develops: ICT (Part 3)

March 31st, 2004 · No Comments

Much of Indias industry and institutions is still in the Dark Age of technology adoption, even as their competition is now global. Unless Indian industry achieves high levels of productivity and efficiency, it is difficult to see how they will compete with their international competitors. In India, we have also not managed to create a big domestic market for information technology solutions. All this needs to change.

Writing in The Digital Hand: How Computers Changed the Work of American Manufacturing, Transportation, and Retail Industries, James Cortada explains the context in which computers became to the part of the fabric of the US economy through the second half of the 20th century:

Businesses came to use computers not because they increasingly became less expensive but because they performed functions (applications) deemed beneficial or necessary for the enterprise. Declines in unit costs did not mean that overall expenditures for computers dipped; in fact, just the exact opposite occurred because as more systems came online, more programmers and other technical staff were needed to maintain and operate them, and more end users had to be trained and supported as well. Yet, overall economies of scale always counted as work shifted to computers and thus away from other sources of expense, or created new capabilities that had economic value. In short, computers made it possible for management to perform tasks less expensively than with earlier information technologies (e.g. adding machines) or manual operations and to do things not practically possible with previous methods (e.g. analyzing millions of customers for trends). Machines were now used to improve efficiency, to lower operating costs, to be seen as modern and to be competitive in an economy that increasingly relied on more, faster, and ever more precise technologies.

In India, so far, the cost of labour has been far cheaper than that of capital (in this case, technology). We have preferred to use our labour and stay in the low-cost, low-quality quadrant in many industries. In this equation, if we can now bring in affordable technology, it should be possible for Indian entrepreneurs and managers to automate their businesses, achieve greater scale and be able to better compete on a global level. Only then can we create a positive, virtuous cycle of increasing domestic incomes and increasing consumption.

What the affordable computing platform does is create a foundation for massive adoption of technology in India. Look at how cellphone usage has skyrocketed India is now adding more than two million users a month, and is expected to cross a user base of 100 million within the next years. As we have demonstrated, it is possible to bring down the price point of computing to that of a handset without any compromise on the versatility, functionality and form factor. By empowering individuals and enterprises with the right technologies at the right price points, India can build out its digital infrastructure in the next five years and create the necessary base for all-round development. The leads needs to be taken by Indias manufacturing sector.

Tomorrow: ICT (Part 4)


TECH TALK As India Develops+T

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