Can we gain from each other?
Can China compete with India in IT?
How quickly will China overtake India in the IT space?
Are Chinese software engineers smarter than Indian software engineers?
This is just a sampling of the questions thrown at me over the last five
years during my interactions with the media, business analysts, government and
industrial delegations, and colleagues from public and private sectors, in China
and the Asia Pacific.
A better question to ask probably is: how can China and India leverage each
other? As pointed out by economist Jagdish Bhagwati, while the US has gained
from the productivity gains in China in manufacturing and the same in services
in India, the two emerging giants have hardly gained from each other's
strengths, despite being geographically so close.
India's Strengths
"Many years ago, there was an industrial revolution. We missed it due to
reasons over which we had no control. Today, there is a new revolution-a
revolution in Information Technology-which requires the capability to think
clearly. This we have in abundance," said Dr FC Kohli, the former Deputy
Chairman of Tata Consultancy Services (TCS), at the annual convention of the
Computer Society of India in Ahmedabad.
India's offshoring prowess which has been proven time and again over the last
three decades is due to a low-cost structure, strong academia led by renowned
institutions like the Indian Institutes of Technology (IIT), National Institutes
of Technology (NIT), and Regional Engineering Colleges (RECs), and Innovation
and Research among others. Throw in our communication capabilities in English,
and we have a winning combination to address key offshoring markets in North
America, the United Kingdom, and Europe.
India, China Juxtaposed
A quick comparison between India and China in IT offshoring reveals the
following facts.
Though China lags behind India in IT offshoring as of today and there is a
long way to go, the IT industry in China is developing fast and Indian IT
majors, operating out of China, are making seminal contributions to its growth.
TCS, in 2004, was the first and the only IT Company in China to be awarded five
certifications: Capability Maturity Model Integrated (CMMI) Level 5, People
Capability Maturity Model (PCMM) Level 5, ISO, BS7799, and BS15000.
In 2005, when the Chinese Premier visited TCS's facilities in Bangalore,
India, S Ramadorai, the then Chairman of Nasscom suggested that a similar
organization be created in China to facilitate business and trade in the IT
space.
Where to Emulate China?
Attracting mammoth foreign direct investment (FDI): China's FDI in 2005 was
$72.4 bn, which is 13 times larger than that of India's at $5.5 bn!
China is an interesting economy to study and explore the best practices that
can be leveraged to India's benefit.
We should encourage government and business delegations from India to visit
China to understand how China transformed itself into the Workshop of the World,
and also to explore the opportunities in the manufacturing space, which is of a
scale and magnitude that we have never seen before.
V Rajanna
The author is Regional Head, Andhra Pradesh Region, TCS