Looking through the glass,brightly!
IT in 2020: Looking through a glass, brightly
(Views expressed are personal)
Today, India has a significant but not dominant share of the global market in IT services. But world is morphing much faster and the topple rate of leaders is high. What will the Indian IT industry look like in 2020? Churchill had once famously said, “A politician needs the ability to foretell what is going to happen tomorrow, next week, next month, and next year. And to have the ability afterwards to explain why it didn't happen.” I want to turn the wisecrack on its head. In this article, I will gaze at the crystal ball and envision what would happen in 2020 and explain why it happened. So let us paint a bold and optimistic picture and do everything to achieve it.
Close your eyes and imagine that you are already in October 27, 2020. India is now a $3 trillion economy. Services still account for 40% of our Gross Domestic Product (GDP) but manufacturing is a robust 35% . Almost a 100 million people are no longer dependent on farming for their livelihood. Yet, agriculture has made giant strides. India is now a major exporter of food and now contributes to 25% of the expanded economy. We have left behind the days of starvation, malnutrition and farmer suicides.
At the beginning of the decade, India launched “ The War Against Hunger”. Our research institutions, in collaboration with scientists around the world, ushered in an ecology-friendly Green Revolution 2.0 . We began responsible use of genetically modified seeds and vastly improved our irrigation and water management systems. We adopted superior cropping practices. Selective use of large-scale commercial and cooperative farming now form the backbone of our flourishing agro-processing industries. Our improved cold chain and logistics have minimized wastage. Paradoxically, Bengal, Jharkhand, Chhattisgarh, Uttar Pradesh and Bihar have emerged as the new granaries of India in addition to our traditional champions in food production. This, more than any other weapon, vanquished the Maoists. Rural income grew at a compounded rate of 6%. Equitable distribution of rural income brought the marginalized to the mainstream.
India now boasts of 14 million knowledge workers. Our “software” exports have grown from $67 billion in 2010 to over $300 billion now. Apart from domination in IT services, India has emerged as a major player in products and innovation solutions. There are now 5 large IT services firms which trace its origins in India. They have grown organically but have also acquired global consulting and product companies.
Today the largest of the so-called Big 5 : Firm A has a turnover of $100 billion. The CEO of Firm A is US-born Rick Lombardi. Much of the turnover of the firm is globally dispersed. The smallest of the Big 5 Firm E is $35 billion and is headed by a Korean lady Baik Hyun Suk. Firm B and C are headed by Indians but Firm D is headed by a Chinese gentleman called Lee Wang. The talent working for these 5 firms are truly global.
The Indian IT industry did not reach the destination simply by doing the same things better. It innovated and diversified. It focused on frugal innovation and acquisition of global research capabilities. It went into new geographies and diversified into new industry verticals like healthcare, government and became an innovation hub for new products and solutions.
An unexpected development helped. The Chindian companies. Like the Anglo-Dutch giants of the 20th Century –Unilever and Royal Dutch Shell, several companies have been born out of alliances between India and China. Together, China and India, while competing in the marketplace, are also collaborating . The visionary leader of China Wen Jiabao had said while visiting Bangalore, “Cooperation is just like two pagodas –one hardware and one software. Combined , we China and India can take the leadersip position in the world. When the particular day comes, it will signify the coming of the Asian century of the IT industry.” How right he was!
Pandit Jawaharlal Nehru had also the vision of an alliance of the two emerging super-powers, “And now the wheel of fate has turned full circle and again, India and China look towards each other and past memories crowd in their minds; again pilgrims of a new kind cross or fly over the mountains that separate them, bringing their messages of cheer and goodwill and creating bonds of friendship that will endure.”
But India had to cross many hurdles to get here. We had lack of Innovation and R&D hubs, inadequate infrastructure, large fiscal deficits, slow pace of economic reforms, poor healthcare delivery and problems of inequity, hunger, housing, clean water, sanitation, greenhouse emissions and pollution. With diligence, smart policies and clean administration we overcame them.
The biggest hurdle of all was the capacity and quality of education particularly higher education. We had over a billion people but IT companies found it difficult to hire quality talent trained in the skills and knowledge that the IT industry needed. In 2012, we embarked on a massive investment in education setting up 100,000 new schools, 1000 new universities and found a way to attract and develop new teachers and faculty. We now have 200,000 PhDs. Unique programs of industry-academia collaboration yielded good results.
I look back and thank the Lord! The last decade could have been a lost decade had we not fixed many things but the five foremost that come to mind are : the unwavering and honest focus on the marginalized and the drastic reduction of the poverty base of our pyramid. Had we failed we would still be fighting the Maoists and our own tribal citizens. The pyramid looks more like a diamond. Had we not scaled and improved the quality of learning, where would we be today? The third smart thing we did was to diversify our products, services and geographies while combating protectionism in our mature markets. Fourthly, we did ride up the food chain as aggressive competitors nibbled at our cost-sensitive segments successfully. And last but not the least our India-born multinationals ventureg beyond our shores, tapped talent world-wide, acquired international companies and became truly global!