IT Boom in India: Some views

I read an article titled "The other Side of IT boom" on The Hindu newspaper dated 31st Dec 2007 . The author makes valid points to which I wholeheartedly agree. There is only one point that the author blames on the IT boom, which is, but a factor of Economic forces: "Real estate prices in Bangalore are among the highest in India. People who don’t work in the IT industry have little hope of living in their own home". Cost of living in Bangalore is relatively high due to higher salaries and resulting increased demand for goods and services. Placing the blame for ridiculous real estate prices squarely on the IT industry is wrong. Every person strives for better pay and a good life. Rather the onus is on the administration to institute policies to control real-estate pricing such that it does not spiral out of control.

Apart from this I completely agree with  the author's points. In fact just see what our much vaunted and hyped IT industry is doing. BPO, Call center, Maintenance, Documentation, low-end Sustenance, Customer support form the vast bulk of the business. There is very little innovation in technology (with few exceptions as the author noted and a few MNCs). How many software products have come out of India ? What new technology have we created ? The Industry here has essentially created assembly line workers out of intelligent minds. There is no long-term technical career path and brilliant technical minds are clobbered into stagnation.

How long is this primarily services model going to work ? Costs and Salaries in India are increasing and services/outsourcing are increasingly going to move onto other cheaper shores like China or Czech republic etc. Unless we move up the Technology value chain, unless we innovate, unless we get world class products onto the marketplace I do not think the IT boom is going to sustain.

 

Comments:

"Rather the onus is on the administration to institute policies to control real-estate pricing such that it does not spiral out of control."

That's not how capitalism and free market works. That's what a socialist / communist approach would be, for the government to intervene and to control.

You have to learn to let Samuel Adams play out. And Samuel Adams' laws say, among other things: supply and demand.

Real estate price in Banglore will shoot through the roof, as long as there are willing fat purses to be untied, and coin spent to obtain it.

But somewhere along the line, a limit will be reached where people won't pay, or won't be able to pay. So what is one going to do? Have real estate on one's hands, that can't be sold? No. The price will have to go down, or no sale will take place.

This process takes a few years to adjust to, might take up to a decade or two. eventually, everything will become a game of checks and balances.

Believe me, you DON'T want the government to intervene. The government's job is to make sure its citizens have social services, like education and health care, the social roles. The government's job is NOT to regulate markets. That's what capitalism, and law of supply and demand, is for. Governments must stat out of their citizens' lives, and not intervene in their affairs.

Posted by UX-admin on January 01, 2008 at 02:08 AM PST #

"Costs and Salaries in India are increasing and services/outsourcing are increasingly going to move onto other cheaper shores like China or Czech republic etc. Unless we move up the Technology value chain, unless we innovate, unless we get world class products onto the marketplace I do not think the IT boom is going to sustain."

Yep, you've perceived the truth of it. Salaries in India's IT will keep going up, eventually, in x number of years, they'll reach their Western counterparts. Unless India innovates, the West will happily pull the money out and give it back domestically, thereby quenching their own riots at home.

The real question is this: is your country going to be able to innovate on level ground with their Western counterparts?

I've observed before, that top-notch Indian UNIX(R) hackers and far and few between, and that the majority of, as you call them, "sweatshops" don't posess the necessary expertise or insight needed to compete.

And as if that wasn't bad enough, just wait until the Western capital discovers countries like Croatia, where the education system is ultra-rigourous, IT skillset highly developed, the workforce cheap, and UNIX(R) experience abounds. I believe that India will learn what vicious competition is like. I understand that this process is already starting with Western clientele making offshore inroads into the Czech Republic and Poland. I've also been told that Estonia and Lituania are good places to obtain cheap, albeit skilled, IT labor force.

Posted by UX-admin on January 01, 2008 at 02:19 AM PST #

"I've observed before, that top-notch Indian UNIX(R) hackers and far and few between, and that the majority of, as you call them, "sweatshops" don't posess the necessary expertise or insight needed to compete."

Not exactly. It is because of the dismal technical career path that most of the good Indian brains seek to relocate to other countries work great stuff over there. It is what we call the brain drain. There is no dearth of technical talent in India as you somehow have wrongly got the impression. However there is dearth of vision and enterprise in the Indian IT industry. They simply cannot utilize the talent.

And also UNIX is not the only thing in the Computer Industry. There are a zillion other technologies and application domains where innovation is possible.

You should probably visit next year's FOSS.IN to get a feel of the local talent here. Brains is not at all the problem here, rather lack of opportunity to utilize it.

Posted by Moinak Ghosh on January 01, 2008 at 02:33 AM PST #

If brain drainage is the problem, then I have indeed observed the situation correctly. I just forgot to add that all the good people leave if they get a chance.

You are an exception. For what it's worth, it's a problem many other countries have to cope with. India is not the only country facing this dilemma.

As far as innovation is concerned, yes there is pah-lenty of other industries to innovate in; but you were referring to IT/CS.
And if we're discussing IT/CS, and talking about innovation in the computer industry (software), then UNIX(R) is where the action is. The sooner India's IT realizes this, the better the chance to innovate and create their own IT industry, free of "sweatshops".

It boils down to a very simple methaphor: if you can choose, do you choose to pound away at a PC-bucket, or do you choose to work on a supercomputer? Think about what I'm trying to tell you, and not just you, with this methaphor. (Hint: no offense meant.)

Posted by UX-admin on January 01, 2008 at 04:04 AM PST #

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