Guest Column: Innovation is the way to go
Following talk of a recession in the US, it is the first time since 1991/92 or 200/01 that I am noticing that people are saying, we don’t necessarily want to cut tech spending, writes Phaneesh Murthy.
India’s IT industry was built on the work ethic of the first few software engineers, which is very different from today, when somebody may be joining for a whole host of reasons including good reference for marriage, large dowry or because it is just another job. That is the unfortunate part of the industry. Hopefully, they will come to love it and create the same kind of work ethic that made the country very proud.
Following talk of a recession in the US, it is the first time since 1991/92 or 200/01 that I am noticing that people are saying, we don’t necessarily want to cut tech spending. For the first time I am seeing a non-indiscriminate cut in expending. As long as business continues to demand lots of things, there are no cuts in technology and people look to offshore centres (like India) to do more. On the other hand, if business demands less due to prolonged recession, that is bad news. The technical definition of a recession is two quarters of negative growth. We are seeing that yet. We are seeing slowing growth. It is not a recession yet.
I think in the short-term, recession creates more and more imperatives. From 2001 and 2002 onwards, the number of companies that have set up operations in India is huge. They all realized that you need a long-term structural change. My concern is that if we don’t get our costs in check either in terms of salaries or rupee appreciation, then work has to move out of the US to a low-cost centre. The question is where?
I believe that not a single company which has gone to China in the past five years has been successful. So India remains a critical as an advantage.
I think the Indian advantage will stay for sometime at least, but there is a complex dynamic. Is there any such talent anywhere else in the world? The answer is, no, not on such a scale. They have no choice. We are now as mainstream as anything else. It is like Chinese toys in manufacturing. You may not want to buy their toys but the fact is that practically there is no other place in the world where toys are made on such a large scale. Therefore, India has the edge which it must work to retain.
Indian IT companies can become more efficient through better utilization of staff and better integration of customers. While we do that, customers understanding the rupee-dollar equation will offer more support. With better investment in IP (intellectual property), we might do things more effectively and efficiently.
The world expected us to lead innovation on software engineering, which we have not done. Innovation is the way to go.
CEO, iGate Global Solutions