On Valentine’s Day this week, the National Association of Software and Service Companies (Nasscom) will be holding its annual conference, the India Leadership Forum, at Mumbai. Things have come a long way for the industry which last week proudly announced that it had reached the $100 billion (Rs 500,000 crore) mark in revenues — though that would include roughly about $16 billion in hardware, which for long has been seen separately from the service companies centred around software and IT-enabled services.
The industry, just 15 years ago, was still doing Y2K bug work that is the IT equivalent of what in garment design would be stitching buttons on a jacket. But, like a learning seamstress who turns fashion designer by using a humble opportunity to stitch buttons, the industry has made its mark on the world, and today accounts for 7.5% of India’s gross domestic product (GDP), with an estimated export of $69 billion in the current fiscal year ending next month.
There is a committed bunch of India IT pessimists who are forever writing off the industry’s future, on the belief that the cheap labour advantage that India has had is getting eroded. This is true because you cannot have a country getting richer while the wages stay at the level of the poor. The real strength of an industry lies in how it can re-invent itself or, as the jargon goes “move up the value chain” by doing more profitable stuff.
To these my answer is simple: what is the great thing that make Coca Cola or Pepsi global brands while all they do — in the memorable words of the late Apple founder Steve Jobs, is “sell sugared water”? The simple answer is that these two cola companies have perfected a lot of things about the simple product: such as advertising, franchising, bottling, packaging and distribution. I should think India’s IT has done pretty much the same- they have learnt everything from forecasting demand, organizing campuses, estimating costs and inventories and creating and documenting processes and training to keep the leading edge in “code cola.”
The juiciest markets, the US and Europe have been through major crises and despite that, the current year will see a 16% growth in Indian IT-BPO exports. At some point, the sheer critical mass and India being a “hub” makes things easier for Indian IT.