Now, let me look from the reverse angle and ask some questions to myself:
Is the world really flat from India’s perspective?
Can I do the same things from Bangalore, what I would be doing from Santa Clara?
Does the word ‘Bangalored’ really threatening westerners?
Can India sustain this boom?
Are we prepared for the social consequences of capitalism?
As a technology professional, let me take example of Indian software industry and try to get answers. Before getting into answers, let us see the definition for Outsourcing from wikipedia. Please give more emphasis to the words underlined:
Outsourcing entered the business lexicon in the 1980s and often refers to the delegation of non-core operations from internal production to an external entity specializing in the management of that operation. The decision to outsource is often made in the interest of lowering firm costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of worldwide labor, capital, technology and resources.
From the above definition it’s very clear that Indian companies will get to do only non-core activity. For software companies, most of the work will be in the areas of defect fixing, production support, software maintenance, software patches and working as an extended team. This is a great achievement in our history and loads of jobs got created because of outsourcing. The new ‘generation-Y’ Indians have more disposable income and purchasing power which leads to more business creation and wealth creation. The educated middle class is rising like big time and a new, vibrant, energetic and confident India is emerging. This ‘emergence’ is happening after eight hundred years of Indian history. The western companies are able to reduce the cost by handing over the work, thanks to India’s strong telecom backbone and English speaking population. It’s all a ‘Win-Win’ game. With this can I say the world has become flat from India’s perspective? Definitely NOT!
Even though the above mentioned advantages are very true, terms like product definition, understanding customer needs, customer interfacing, product marketing, technology evaluation and product ownership are still ‘unheard’ words in Indian software industry today. All we are good at is to hire bunch of fresh engineers from the college, train them, bill them, build process framework, commoditize engineers and manage attrition. What is the real ‘value addition’ happening here? According to me it is very minimal. We are currently enjoying the benefits of outsourcing mainly because of the lower wages in India which is catching up very fast. For example, today there is not much salary difference (based on my personal experience) between an engineer in Bangalore and Singapore. Then why should any firm outsource to India?
The Internet has played a significant part in making the world look ‘flat’ but lot of work needs to be done from India’s point of view. Following are three important points to consider:
- The first need is to develop a domestic market for technology products and services, which demands ‘bottom of the pyramid’ innovations. The economic engine should fuel the domestic market creation and ultimately create an array of product making organizations from India. This is what the Asian tigers (Countries like Japan, Korea, Singapore, Taiwan and Hong-Kong) have successfully demonstrated in the past forty years.
- India should become a manufacturing hub, mainly in semiconductors and automobile areas. This not only creates product building capability, also generates need for more software products. Of course, infrastructure is a major challenge in this case.
- Industries should play significant role in forming relationship with academic institutions and do long-term strategic investments. This would create a competitive, industry ready workforce who can be deployed without much training. Missing on this would prove very costly in India, as it will create demand-supply problem.
I can keep adding to the list mentioned above, but they are major points to consider. As of today comparing Bangalore with Silicon Valley is nothing but a joke, where nobody in India talks about value creation. The world might look ‘flat’ from the westerner’s point of view, but India has to go a long way to really to make it a reality.