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China's progress in IT is an opportunity for India: Infy's Murthy
By
SiliconIndia,Friday, 27 August 2010, 04:19 Hrs
Bangalore: N.R. Narayana Murthy, the founder of IT giant Infosys, opined that India should perceive China's rapid development in the information technology sector as an "opportunity" for Indian IT companies functioning in that country, rather than as a "threat," reports Raktima Bose from The Hindu.
Answering if China's speedy progress in the IT field could pose a threat to India's favourable global position, Murthy said, "China has shown development in extraordinary proportions in different sectors. It will also make progress in the IT sector. Almost all Indian IT companies have a presence in China now. But we are not looking at China as a threat but as an opportunity."
Many of India's leading IT companies like TCS, Infosys and Satyam has setup shops in china to attract projects from the Chinese Industries and to explore the booming manufacturing sector there. Some of the major Indian companies have also acquired small sized Chinese companies to understand the market and to merge themselves into the Chinese culture. Though the per hour rate offered by Chinese is less than India's rate, about 30 percent less. But there are lot of hidden costs which includes communication issues (more time, more rate), knowledge transferring time, data security protection and regulatory issues. These issues demands a completely new strategy for the western companies to kick start its outsourcing plans.
Answering if China's speedy progress in the IT field could pose a threat to India's favourable global position, Murthy said, "China has shown development in extraordinary proportions in different sectors. It will also make progress in the IT sector. Almost all Indian IT companies have a presence in China now. But we are not looking at China as a threat but as an opportunity."
Many of India's leading IT companies like TCS, Infosys and Satyam has setup shops in china to attract projects from the Chinese Industries and to explore the booming manufacturing sector there. Some of the major Indian companies have also acquired small sized Chinese companies to understand the market and to merge themselves into the Chinese culture. Though the per hour rate offered by Chinese is less than India's rate, about 30 percent less. But there are lot of hidden costs which includes communication issues (more time, more rate), knowledge transferring time, data security protection and regulatory issues. These issues demands a completely new strategy for the western companies to kick start its outsourcing plans.
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Reader's comments (4)
1: I agree with your views Shri Narayana
Nurthy. Not only in IT,in every sector be it
Power,Infrastructure etc., China leads in
comparison with India.
Andrew Marshall in an interesting article,” China's Economic Growth Compared to India”(ezine@rticles ,18th December 2009)) brought out lucidly the difference between the two countries:
“China's economy has grown massively in the last couple of decades. Although India's economy has also grown in this period, in terns of numbers it cannot be compared to its Asian counterpart. The two countries have the two biggest populations on earth with 1.3 billion and 1.2 billion respectively. China has more than a billion more residence than the third biggest, the USA.
China's economy grew by 10% on average every year in the 1990's, and this growth has increased still further since. It currently has the third biggest economy, behind the US and Japan, and is expected to overtake both these in the next few years.
There are several reasons for China's growth. Its population alone gives it a significant advantage, and is the reason why such rapid growth has been possible. Government stimulation has certainly helped, with large amounts of cash flow put towards infrastructure and transport. There are also many investment opportunities for foreign investors. Another major reason is the cheap labour available for companies coming into the country. This has been utilised by a number of large clothing corporations, with a large proportion of the world's clothes manufactured in the country. Manufacturing has been the most significant growth area. It means that foreign companies can manufacture their clothes significantly cheaper by going to China, rather than having them manufactured in their own country. Some companies have been criticised for providing poor working conditions for workers as there aren't the same strict regulations as elsewhere. Living costs are lower in China, meaning its workers don't demand the same wages, and therefore lower costs for the businesses.
India has not grown in the way China has but there has been an increase due to the cheap labour it offers. Several call centres have moved to the country in the last ten years. Some companies have received criticism for this for several reasons. One of these is that it has resulted in people elsewhere loosing their jobs in the name of bigger profits. Another reason is that it means that customers are not talking to someone in their own country, meaning they don't speak to someone who can directly solve their query.
Call centres are the equivalent to clothing companies in China, when it comes to foreign businesses utilising the counties workforce. A major reason why China's economy has grown more than India's is the huge technological advances that have taken place. There has been a vast difference between the two countries in this area. India hasn't had the same government investment either. It is also still relatively rural, with a large amount of urban migration having taken place in China. They are following the model of the west more and more, with large industrial cities such as Beijing and Shanghai. It has also been suggested that the stability of the Chinese government has been important, as the economic situation is not affected by political change. Does this mean that democracy is bad for the economy?”
Dr.A.Jagadeesh Nellore(AP)
Andrew Marshall in an interesting article,” China's Economic Growth Compared to India”(ezine@rticles ,18th December 2009)) brought out lucidly the difference between the two countries:
“China's economy has grown massively in the last couple of decades. Although India's economy has also grown in this period, in terns of numbers it cannot be compared to its Asian counterpart. The two countries have the two biggest populations on earth with 1.3 billion and 1.2 billion respectively. China has more than a billion more residence than the third biggest, the USA.
China's economy grew by 10% on average every year in the 1990's, and this growth has increased still further since. It currently has the third biggest economy, behind the US and Japan, and is expected to overtake both these in the next few years.
There are several reasons for China's growth. Its population alone gives it a significant advantage, and is the reason why such rapid growth has been possible. Government stimulation has certainly helped, with large amounts of cash flow put towards infrastructure and transport. There are also many investment opportunities for foreign investors. Another major reason is the cheap labour available for companies coming into the country. This has been utilised by a number of large clothing corporations, with a large proportion of the world's clothes manufactured in the country. Manufacturing has been the most significant growth area. It means that foreign companies can manufacture their clothes significantly cheaper by going to China, rather than having them manufactured in their own country. Some companies have been criticised for providing poor working conditions for workers as there aren't the same strict regulations as elsewhere. Living costs are lower in China, meaning its workers don't demand the same wages, and therefore lower costs for the businesses.
India has not grown in the way China has but there has been an increase due to the cheap labour it offers. Several call centres have moved to the country in the last ten years. Some companies have received criticism for this for several reasons. One of these is that it has resulted in people elsewhere loosing their jobs in the name of bigger profits. Another reason is that it means that customers are not talking to someone in their own country, meaning they don't speak to someone who can directly solve their query.
Call centres are the equivalent to clothing companies in China, when it comes to foreign businesses utilising the counties workforce. A major reason why China's economy has grown more than India's is the huge technological advances that have taken place. There has been a vast difference between the two countries in this area. India hasn't had the same government investment either. It is also still relatively rural, with a large amount of urban migration having taken place in China. They are following the model of the west more and more, with large industrial cities such as Beijing and Shanghai. It has also been suggested that the stability of the Chinese government has been important, as the economic situation is not affected by political change. Does this mean that democracy is bad for the economy?”
Dr.A.Jagadeesh Nellore(AP)
Posted by: Dr.A.Jagadeesh - 27 Aug, 2010
2: A good observation, we should make China's
growth an opportunity for us.
Posted by: dona - 27 Aug, 2010
3:Yes, that's right. We should go & settle
there with Congressmen, BJP men and ruin
them. This is will give our communists an
opportunity to expedite ruining our financial
infrastructure.
selvi replied to: dona
post - 27 Aug, 2010
post - 27 Aug, 2010
4:Yes, that's right. We should go & settle
there with Congressmen, BJP men and ruin
them. This is will give our communists an
opportunity to expedite ruining our financial
infrastructure.
selvi replied to: dona
post - 27 Aug, 2010
post - 27 Aug, 2010
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