Interesting
article on how India will fare much better than China by Paul Johnson on rediff.
Despite the author’s British roots and pro-US bias being apparent, the article does present a positive future for India. Being the Indian that I am, I tend to take this with a dose of salt. Agreed the listed advantages are apparent, but the article does not take a lot of *other* Indian factors into account.
Particularly, the slow pace of infrastructure growth and the overall economic growth taking place in focused pockets will hamper growth. If we do not make significant strides in bio-tech, R&D outsourcing (lets face it, we do not have the financial capital required for self sustaining research) and high-end IT in the next decade or so, the authors negative observation about China not investing in high technology will be true for India as well.
Also, it will not serve us well to forget how efficient the Chinese are. They need growth as much as anybody else. And I would assume that they understand their deficits as well as anybody else. They will, without doubt, come up with ways to get around these deficits. Just the way they designated Special Economic Zones (SEZs) in 1979 (were a more open economy is practiced) is proof enough how the Chinese will find ways to side step their limitations while keeping their political ideology and hold intact elsewhere.
The Chinese are undercutting India's hold on software services outsourcing stack. I have personally had Microsoft managers tell that they see value and advantage in outsourcing work to China rather than India. They do not worry about attrition issues as they face with Indian operations. The Chinese billing rates are much more competitive than the Indian rates. Of ourse, there are nagging issues as in lack of qualified middle management and language constraints. Also, MSN site has been blocked by Chinese government on and off. But once these issues are sorted out, the Chinese challenge will pose serious problems to the Indian software services industry.
India Software Inc. does have the options and the required platform to deal with this challenge. The Indian IT industry is making the right noises, although nascent, of moving up the value chain in the outsourcing stack.
Although confronted will all these challenges, there is still optimism which needs to be consumed with required caution. And this caution needs to translate into tangible measures to prevail over these limitations.
It will be an interesting couple of decades ahead!
