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“Indian Companies Should Work Closely With Producers":(The Digital Age- 13thJan 2001 )
There is a fear that the much-talked about IT boom is over and the gains in productivity will be in as much as with any other major invention in the past. Do you agree?
The IT boom is not due to just one invention but a part of the knowledge revolution. While the effects of the industrial revolution lasted over 100 years, this one should last for at least 10 to 15 years from now. The benefits are going to come in many phases and in practically all fields of human activity across all parts of the world. It can even spur revolutionary growth in some areas such as bioinformatics, which is really taking off in a big way.
In India are we going overboard in assuming that IT is the engine to drive us to prosperity in the 21st century?
It would be difficult for IT alone to bring the whole country into prosperity, but if leveraged properly, it can be a key engine for good growth. Anyway, India does not have too many opportunities in front of it, so we might as well focus on IT. And most of the efforts that would go into pushing IT growth (computer education, infrastructure development, etc.) would only help other industries.
NASSCOM estimates the market could grow to $87 billion by 2008 with exports alone topping $50 billion. Is this realistic?
Is this a realistic figure?
It is optimistic but definitely achievable since it is supported by the McKinsey study, which I found to be well researched and exhaustive. However, like most projections it assumes a number of favorable conditions for many continuous years; which may or may not be the case. But I would like to commend NASSCOM in its efforts – it has been on of the good things to happen to the Indian software industry.
Most Indian IT companies seem to be engaged in providing customized software for their clients. Will they be able to move up the value-added chain in terms of branded software?
Not all, certainly, but some would. Those with an established base in the US and with good technology understanding and relationships with key industry players would find it easier to move up the value chain. But please remember that in branded software, the industry does not accommodate too many in each segment. Instead of competing in established areas, Indian companies should initially work closely with product companies developing products in cutting edge technologies and take equity positions. That would give them the experience and confidence to develop products on their own. Also, since development costs are only 15 to 20 per cent of the total product life cycle cost, Indian companies would need help from their partners in global sales and marketing.
What do you estimate is the potential for e-business in a country like India? Will it remain B2B or can we envisage B2C as well?
Every business will become an e-business. So B2B, B2C and B2B2C is bound to happen everywhere. If communication infrastructure is developed properly inside India, both businesses and consumers can save a lot of money through e-business.
Most states in India have been vying with each other to attract software companies. Do you think they are being over ambitious?
Going by occupancy rates at both C Babu’s AP's Cyberabad and TN's Tidel Park, it would appear so…..Running after the software companies (even if it is the largest in the world) is not the solution. If you make the overall conditions easy for business, companies will come. Thanks to the IT boom and the Indian brain, Indian talent is now accepted worldwide. However to get India accepted as a destination for quality software development is a bigger step. Governments can definitely do a lot to make that happen but the efforts should be more in infrastructure development – communications and transportation. The current and future parks would get filled in a matter of time, but this alone will not be sufficient for India’s prosperity in the 21st century- basic all round infrastructure improvement is a must.
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