Thursday, November 13, 2008
Like post-World War II Japan, India is on a warpath to become a developed country. It took Japan 50 years, starting from scratch, to become an economic superpower. It will take India lesser time, perhaps only 20 years, if India uses the niche-market opportunities now presented by the global explosion – and need for – information technology expertise.
Two decades from now, India will look very different from how it appears today. By excelling in IT services the world over, Indian companies and citizens have opened many doors that will lead to a domestic economic overhaul. Here is what I envision: India will not remain an agricultural and manufacturing economy. Instead, it will become the service center for the entire globe.
Thinking Beyond IT
Imagine a scenario where you, a guest in a top hotel in the US, make a call for room service. The call is routed to India, because your hotel has discovered the cost-advantages of outsourcing this customer interface to a lower-cost English speaking locale. Through sophisticated communications systems, the catering department gets the order. Moments later, your food arrives. You, the customer, needn’t know the order routing, you only required polite service and a tasty meal delivered in a timely fashion.
Though this is a rather simplistic analogy, it shows how India is very well positioned to become the “Wal-Mart” of the global service sector. I’m not just referring to IT outsourcing -- that’s passé. The era of business process outsourcing is beginning. And Indians will not just be implementing system enhancements. They will be running the show from India for many Fortune 500 corporations. In the coming years, the remote delivery model will be the preferred system in the entire world, thanks to cost and quality advantages. Based on rough calculations, we have as much as a $2 trillion opportunity ahead of us in twenty years.
Here is another non-IT outsourcing example. The human genome project is crying out for qualified manpower. Mapping the human gene is a major breakthrough, but the research task has just begun. The project needs qualified researchers, and India can step up and offer just that. This is just one of the millions of opportunities India is well equipped to deal with. India’s entrepreneurs and the government have to keep their antennae out to cash in on these opportunities as they arise.
Effective Communication
Channels Make it Possible
Increased bandwidth, satellite communication, and government-sponsored education and incentive programs have combined to make a bright future possible for India. Using new technologies, any Indian can work with the best companies of the world. This means the country’s former weakness — its population — will become its strength. Not only does India have 16 percent of the world population, but also 16 percent of the world workforce. Indians thus have great potential, if they channel their talent into highly value-added industries.
India has been a major outsourcing center — and a good one — since the early ‘90s, when the first sizeable communication links were established. In the past 10 years we have perfected this model, developing a worldwide customer base by improving quality of service. Rough estimates show that already, half of the Indian market capitalization is being generated by IT and IT-related companies run by Indians, both in India and abroad, and this volume is expected to grow.
Potential Opportunities
Business opportunities abound in many areas, because most corporate back office work can now be done remotely. An executive in the US should be able to have a virtual Web assistant in India, who not only handles the traditional responsibilities, but also does online business procurement and the multitude of new tasks required in today’s business environment. The list of potential areas is infinite, and includes any area that requires intensive manpower and high quality, including:
Healthcare
Telecommunications
Backend corporate administration (e.g. payroll, employee training, etc.)
Biotechnology
Education
Marketing Support
Hospitality
What Does the Future Hold?
Seeing fruition from these ideas now depends on the government and businesses’ continued acceptance of globalization and action to exploit the unique advantages India has today. For starters, India need the necessary infrastructure, including competitively priced communications bandwidth and continued streamlining of trade and business policies, to provide greater incentive to foreign companies to work in and with India. If the government stays focused on creating and maintaining a pro-competitive business environment in India, all Indians will benefit.
As a civilization, India has pursued knowledge for its own sake, but today knowledge and the economy are closely intertwined. India’s population has provided a new international niche - let’s not lose it.
Ramalinga Raju is the chairman of Satyam Computers and Satyam Infoway.
