RE: [bytesforall_readers] India: Reality Check On IT

India: Reality Check On IT Masters or cyber-coolies? By Praful Bidwai [July 7 2003] was an interesting reading as I find someone whose views seem to come close to what I have continued to argue for years in some respects.

Less than a million strong workforce in information technology generating some $8 billion in revenue gives us an average productivity of about $8000 per employee which is not disappointing by most national standards but surely does not turn this sector into the most productive sectors of our economy either and surely nowhere close to what the hype around IT would suggest.

India's share in the global market in IT and related services is not significantly different from most other sectors, being under 2 percent of global market size. In terms of the size of the largest companies in the sector as well it broadly conforms to the global pattern. The largest Indian IT company is about a percent of the largest global IT company just as it we can see in the case of automobiles (roughly $200 Billion of GM vs $2 Billion of Maruti) or pharamceutical or any other.

But then Bidwai may be overly critical on many counts from the prespectives that underlie his arguments, much of which may stem from the belief systems of pre-liberalisation era in India or the cosmetic treatment that may sometimes be taken to define the systems they represent.

It is not necessary to critique the geographical distribtion of India's IT business. Most industries globally have found geographical preferences that go beyond what can be explained by education or any other indicator of human development. Almost all of pharmaceuticals in Switzerland is concentrated in 5 square miles, in a couple of states in the US, automobile industry similarly is concentrated in a few cities in the US and Europe and one can easily identify such concentrtaionsin most sectors that permit it.

Jobs in all sectors have moved as the markets get created. GM has a very large part of its production in Europe and so has Ford and Toyota and other Japanies companies produce a significant share of their output in the US and the arguments of job losses were no different then either. But that is not the argument one gets to hear lately no matter how many jobs get created where they are cost effective or competitive. But where Bidwai may be missing the point most seriosly is in his understanding of where the value gets created. His argument that "a good proportion of the sub-programmes in Windows 95 and 98 were developed by Indian engineers. But it's Mr Bill Gates who skimmed off the profits! " may at bst be churlish if not wholly fallacious. The value to the product is not created by the cyber-coolies, it is the chief architect of the company who created a whole industry who creates that value and all others join in and get compensated more than they could dream for the same. Similarly to say that " If we want to get into high-end, high-value-added services, which alone can upgrade our people's skills while raising their incomes and redistributing new wealth, we must set our sights high. That implies ambitious goals for manpower training, skill generation, backward-region development (through the conscious creation of new jobs in Bihar or Punjab), export content rules, etc. We can't let Western companies do that for us" is equally fallacious to say the least. It is in working with the architects of global industry that our workforce moves up the learning curve and the value chain. They will often move up the curves only with the help of the companies that create and use these technologies for their sake or for teh sake of creating global markets.

Idealism good, realism better!

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RE: [bytesforall_readers] India: Reality Check On IT - Masters orcyber-coolies? (fwd)