IT vs Rest of India - Part III
I kinda half expected someone to come up with some better ideas and insights. Also I did not have solid data to back certain issues. But then was this exchange thing going on between me and Senthil. Whats more he wondered if i am advocating socialism or communism. This effectively necessitated this part III.
So what is the solution? Clamp down investments in the IT sector? Enforce unwanted regulations and unleash bureaucratic hurdles and take India to the pre ‘90 days? Typically this is what legislature is capable of.
The real solution in my opinion lies at the hands of “Indian” IT Bellwethers like TCS, Wipro and Infosys and all other major corporates who have benefited from the Great Indian Economic Reforms v1991 and IT outsourcing. While all of them are world class in their business, its high time they also thought about the greater albeit underdeveloped India. An India exploited by politicians and bureaucracy.
It is time these Indian cash rich companies thought about the vast untapped skilled,capable human resources but lagging in qualification and training and other promising sectors in India. Ideally they can invest in Agriculture, Education, Finance, Pharmaceutical and Engineering sectors and or fund research in the latest technologies in these areas. I for one believe India’s problems as well its source of strength is its Human resources. What this might ensure is that the sectors which are supported by these companies in such a manner will provide a means for these IT majors to test and develop innovative applications for these verticals which can be marketed internationally as products.
Why cant these IT companies build a research institution in say pharma and healthare?
On the social front, there is a wonderful scheme by Narayana Hrudayalaya in Bangalore. And there is Aravind eye hospitals initiative. I dont think any IT company has done as much for eye care through Shankara Nethralaya like Shankara Mutt.
I dont see any such socially relevant schemes supported by or sponsored by these IT bigwigs when u take the sheer revenue they make. By and large thery are more worried by the next quarterly earnings and about the next takeover bid.
Right now it is disappointing that these companies are looking for government support in developing the infrastructure in areas where they have their own offices. For example the Old Mahabalipuram Road aka The IT corridor in Chennai is utilised mainly by Wipro, Infosys, CTS, Satyam, Polaris, TCS company buses along with Sathyabama buses. About 25000 techies use that road. These buses and the employees who opt to come by car form the bulk of traffic on this road. i dont know if any effort was taken by these companies to take on the task of building this road.
Right now the project is being taken up as a joint venture between Tamil Nadu Government and IT Expressway Ltd, fully owned subsidiary of TamilNadu Road development company whose background I am not sure. The Infys and Wipros cannot think anything beyond offshore outsourcing, new ODCs, ITES, the next campus to recruitment etc.
It is not as if these companies will be the first if at all they do. An IIT Chennai graduate by name Suresh Kamath has already shown the social responsibilities of the technology business through Lasersoft Infosystems. Lasersoft is a firm which specializes in banking applications. But what makes Lasersoft special is that Suresh Kamath chose to start his own company and was willing to employ physically challenged persons who have the spirit and intelligence but not necessarily the background to write software. He was willing to provide them training opportunities and showed the world that it was still possible to run software companies without BE/MCA or equivalent with 60 % with 3 years experience in everything under the sun.
He might have ended up paying these people considerably less than what an IT MNC pays a software Engineer but the impact of Lasersoft on the society is significantly higher than what these companies in total has been able to make.
This story is but one example of what he is able to do.
I am all for capitalism. But a country like India needs capitalism with compassion and human face, not exactly the Lehman Brothers capitalism which profits only a select few.
Now to what will happen if these companies stick to their core competencies (as management gurus are fond of calling that). This IT wave will go, some other wave will come and we will be caught on the wrong foot bcos we may not have the human resource and infrastructure bandwidth.
It is in the hands of visionaries who have willingness, resources and guts to shape India’s future. IT companies have plenty of cash. But it remains to be seen if they can be called real visionaries like one Cherian behind Amul’s initiative in Anand, Gujarat.
July 26th, 2005 at 12:24 am
prabhu,
First of all.Dont get upset with oppossing opinions.I feel the great thing about the blog is that you get to hear opinions of different people.
coming to the post.what has philanthrophy got to do with levelling the growing difference between the economic classes in india??.would the difference be
gone if TCS/wipro/infy starts doing lot of charity works??
what ever u r talking about is philanthrophy.If iam earnign a lot of money.Do i have to give it to philanthrophic purpose??. Rajini/rehman/sachin are making so much money and to expect them to donate the money they earn i think is wrong.They earn the money, pay there taxes.that’s all they got to do.If rajini is donating, its fine, he is a good man i wish everybody else does it.But iam not going to blame the others for not donating. same holds for the corporations.If i am azim premji i will be worried about making my company a true multi national and not whether how much i donate to shankara nethralaya.And many of the corporations do donate and sponser various charities.
July 26th, 2005 at 12:57 am
hey prabhu, a little late on this debate…read all 3 posts & comments…*whew*…i am with senthil on this one…everyone is bashing the IT sector these days…am sure they have their downside…but me thinks its a gr8 start to take the indian economy upwards!! there is the divide between agriculture & all this - true. but it is the IT sector’s responsibility to do well in their core area…they cannot go looking for weaker sectors & donate the money they make….that responsibility shud lie with the policy makers or whoever who is supposed to channelise the money these guys bring in…i think its unfair to burden IT ppl with all that is wrong in india…there are ppl in it sector who send money to their villages in india…u cant expect more from a profit-making sector…considering the extent of debate going on here, this is my 0.00002 cents
July 26th, 2005 at 3:11 am
en ma capri ….serious a kekren…r these jobs stable? u know 1997-98 was a boom period in america…all the students(F1) had 3 jobs in hand then what happened after that avan avan single tea kku lottrey adichutu erukan..imagine a electrical engineer goes to work in CS..and after 3 years the whole software industry sinks…aprom avan kathi enna….sollunga…ohms law kuda avanku theryathu…summa sollathinga software boom of indian economy…call center kuda than boom of indian economy….please enable ananymous to comment in u r blog…no offence
K
July 26th, 2005 at 4:57 am
I agree with Senthil. He said it very well, being rich doesn’t mean that you need to donate and take up governments responsibility and most importantly we don’t know of these companies future plans and what their expenses are. When a company leaves its core competency for social cause/charity purpose/without expertise and invests heavily in other sector, which doesn’t fall under its operation domain, then there is always risk to their existence. Even if they willing to, then does it bring any significant change to this society or any sector which justifies worth of risk these companies need to take? Our country is too big and our rich companies are too small to have significant impact.
For that matter, our global IT market share is just 3% and our IT employees make less than 2% of India’s. IT can create brand image for India and help complement other sectors in their functioning but IT industry is too minuscule to propel other sectors of this country. Corporations have to think of their company’s future & share holders, they can’t afford to keep their feet in many boats, at the same time.
Opening up economy and allowing FDIs is the only way out.
July 26th, 2005 at 6:12 am
the important thing is corporate social respinsiblity, thats the word. IT companines benefit from society, they get tax waivers, cheap land and other benefits from society. the benefits given to a IT company cud have been redeployed into social infrastructure, this is the opportunity cost of an IT company for society, therefore IT compines have to look at giving something back to society, not in terms of the work that Sudha murthy is doing, but something far more concrete.
if Jamshed TATA followed the IT frms principles of today, we wud have no Jamshedpur or XLRI. its all corporate social responsiblity.
tamil there is a saying that pudhu panakaran arthajamathula kodai podaipudipan. well IT firms r pudhu panakarans and they seem to have an aversion to giving money towards social causes, they even have a problem taking charge of their own backyard, wheres the traditional companies like TATA, birla take charge of their backyard and contribute towards their immediate neighbourhood.
July 26th, 2005 at 6:13 am
@senthil and others
i am not blaming IT or whatsoever but this i think is the only way to bring lasting, enduring change to an underdeveloped india. its a choice afterall. there defintely has to be a capitalism.
philanthropy has got psychological impact more than economic impact whch i feel is necessary in a country like India. atleast it does not betray a “we dont care, its not our responibility” attitude.
its not as if i am suggesting somrhing like putting i all thier cash reserves in other sectors. but that shud be defintely part of their strategy. worrying abt the next onsite assignment, next quarterly earnings guidance alone smacks indifference and a definite sense of “its not my responsibility” syndrome. nothing wrong with that. only that it will not bring any substanstial change. at least i feel that way.
i dont see suresh kamath letting philanthropy dominate his business. its a part of an overall scheme. if u think on a bigger scale everything connects to one another.
Whenever china or someother place gets cheaper in IT with its manpower, all the biggies will cut jobs here and make jobs in china. only that its not going to serve india’s purpose then.
what looks like philanthropy might well make business sense tomorrow too.
if aomeone is going to feel this is not his responsibility, then i guess the debate ends there.
its nobody’s responsibility to bring a change. we can blame the govt and the system and sleep opeacefully at night. only that nothing will change.
July 26th, 2005 at 6:26 am
@vatsan
well said. It need not just be CSR. let them even benefit out of it. no issues.
As Shuuro said, what is India’s standing for all the hype on the s/w high end products segment?
why is this sitn? what do we lack?
if say Bush clamps down on IT outsourcing to India for some reasons what will be our position.
if we are going to bark at the govt to bring all that, then its more likea hobby. bcos govt is what we choose.
if we are more worried abt the next quarter, its bound to happen.
i feel certain things can work from being niche, focused.
After a point, its important to contribute to the economic system to grow actually.
@ senthil
i am not exactly getting upset, but i somehow feel an urge to move on to the next topic after a day or two. The purpose is to raise some questions and then its time for each and every person as an individual to reflect on that o his/her own.
July 26th, 2005 at 7:57 am
whoa! coincidence o coincidence…me too blogged on IT…am from IT background…it opened lot of oppurtunities for most of the youngsters..I started working when I was 18 and half and i was earning lots…it has given us lot of hopes and fresh and wide boundaries ….
now giving money as charity is one’s own comfortability…i agree totally with senthil saying that “would the difference be gone if infy and wipro starts doing lot of charity..”
from Wipro, there is Azim Premji foundation, Sudha murthy heads the infosys foundation..and i am pretty sure other top it orgs. would have their own foundatiosn to help…how how much do we know of their is work is what it matters?do we know the full work they are doing if they are doing at all? or they dont do any thing massive?
i guess, sanctity of everybody;s charity work is kept intact that way! no offence meant!
July 26th, 2005 at 8:15 am
Everybody sems to agree on the fact that the IT boom is kind of a short one and it will vanish soon.So you got another 3/4 years to utulise an oppurtunity and make money.what would you do?.would you care about next quater/ on site assignment or what your company is doing for philanthrophy?.
And why blame IT companies alone.There are enumerable companies making money,shouldn’t they all donate.Shouldn’t all the movie stars donate??.shouldn’t all the cricketers donate??.Doesn’t everyone have a responsibility.what percentage should a IT company donate.If an IT company is donating 10%.shouldn’t a common man doante 2% of his earnings??.Aren’t we sounding utopian??.
Forget the corporates.say you are earnign 50K per month.If you think it ur responsibility to bring a change.How much are u ready to donate for philanthrophic purposes??.realistically??.
July 26th, 2005 at 9:50 am
the fact that some of the comments focus on philanthropy, charity alone and nothing else reflect a lot.
and me, no i am not earning 50K yet.but yes i am doing my bit.
just like economies of scale here too scale matters.
in fact the crux is not abt donation at all. its about awarenss abt the existence of a lesser endowed society.
ibh,
true i know abt infosys foundation and i have read sudha murthy’s books too.polaris has ullas trust.
the purpose is not to deny whatever they do.
but to say that with their manpower, with their managerial expertise, with their money, a lot more can be done with a long term outlook and it not even be driven by charity at all. they can find some win-win scenarios.
i am not going to comment further on this.
July 26th, 2005 at 9:58 am
wow!
that was long….
commenting now..reading after commenting….
July 26th, 2005 at 10:09 am
@monu
idhai nee padikaradhukulle lunch ayidum:)
@ibh and senthil and all others
no offences meant to any of u too. am just tired of arguments.
July 26th, 2005 at 11:43 am
prabhu,
first time to your blog and i agree with your views partly…
the fact that has been missed by others is, TCS/Infy/Wipro make so much noise about poor infrastructure but what are they doing to improve the same. how much can the govt borrow from World Bank. if the govt’s start concentrating on cities where Infy/Wipro operate then what about other cities and towns. how will the govt manage them if all finances are diverted for these guys.
July 26th, 2005 at 12:49 pm
@sathish
thanks for dropping by
Exactly. see the point i am trying to raise is that these IT bigwigs are cash rich and the least u can expect is to be self-sufficient.
and my points on other aspects is that they can develop a market in india and international arena by develping infrastructure contributing to schools etc.
unlesss they contribute to reasearch in some areas there is very little chance for us to come up with top notch s/w in those areas bcos there is not much research happeneing here.
why google, adobe ad microsoft have to be in US and India be their backoffice?
if we need to to be there that what shud we need? if there are bottlenecks why can’t these companies try to address that bottlenecks.
if they do initiate measures it may not bear fruit now but it will surely reflect 20 yrs down the line.
it is not just philanthropy, it is development.
July 26th, 2005 at 1:32 pm
Well, I disagree with this notion that once there is cheaper IT destinations our industry is doomed, if that is the case/attitude then why we need to worry about investing in some other sector, some day it will also face competition. are our IT companies are too feeble to not with stand competition and need to shift their core competency from time to time?, can’t we imitate Japanese automobile industry model? or think something of our own? or with huge pool of work force can’t our salaries stabilize? or can’t we shift to R&D in IT and concentrate on innovation rather depending on providing services? I don’t agree that our IT industry is a bubble and it is waiting to happen. Out IT industry is diversified and not specific to US but i agree bulk of our market is in US.
Our major IT companies have their charitable foundations and most of their CEO’s have established personal charity trusts to help needy, is this not acknowledgement of existence of a lesser privileged people in society and is this not giving back something to society in return?.
Prabu,
“with their managerial expertise, with their money, a lot more can be done with a long term outlook and it not even be driven by charity at all. they can find some win-win scenarios.”
This reminds me of argument i had with my friend. In Hyderabad there is world class Ramoji Film Studio, probably you may be aware of it and he argued that instead of wasting so much of land they could construct various industries and do good for society. For that matter, He believes that all parks should be given to poor!
July 26th, 2005 at 1:33 pm
Sathish,
government has not invested significant amounts in IT industry, only thing which they have done is to help it with tax exemptions & other benefits, such as providing land for minimal price in their earlier growth days and to have less involvement from their bureaucracy. As you know IT industry needs good connectivity and less bureaucratic hurdles to conduct its business. China which has less market share than us have greater connectivity and tell me how much government has invested in this area? their apathy only make it difficult for IT industry to compete.
Shuuro
July 26th, 2005 at 2:04 pm
This post has been removed by the author.
July 26th, 2005 at 2:06 pm
Out IT industry is diversified and not specific to US but i agree bulk of our market is in US.”
so when US govt decides that enough is enough with India, Our IT bigwigs with no domestic market will make 100% growth rate is it?
i dunno abt your friend.
In china, a lot can happen with communism. here we not only need good people but also intelligent people with money and the right kinda influence to makew things happen.
i think these big IT cos are better positioned to bring abt a change for the better in India than the corruption infested govt.
July 26th, 2005 at 3:51 pm
Well, i just read your post on being tired of arguments just want to make few brief comments, sorry about that
Our relations with USA had deteriorated after nuclear test and they had imposed sanctions on us, even then in those days IT industry wasn’t affected due to we being economically profitable, as long as we maintain that position i don’t see any problem. My point is, that in capitalism lot depends on economics than politics, so let us be practical with our assumptions. We do have domestic market but our markets are not big enough as you pointed out and for this to happen there should be development in other areas for IT sector to exploit them.
You argue that IT industry is making lot of money and with that money if invested properly in other sectors, they can bring change for better India than our government. First, money which they are earning by all means is not that big enough to bring any significant change to this country and ambanis have invested in some R&D sectors does it had any significant change in India?. Even if they invest for sake of it in building a research institutions in pharmacy and healthcare(as you suggested) then they can’t expect any returns for decades and IT being volatile sector, it may prove suicidal for them to sustain.
I wrote about my friend because i found your analogy in argument similar to his, he want to a company to start more industry so it can serve more people, irrespective of their expertise, instead of doing business in their area of their influence. Expanding their industries into various sector with a strategy is different thing than doing it just for some social responsibility.
China got its greater bandwidth & connectivity not from communism but investment in its infrastructure, which it received from FDI due to its opening of its markets.
Regards,
Shuuro
July 26th, 2005 at 4:50 pm
it is gladdening 2 see that there are guys like suresh kamath of Lasersoft…thanks for bringing this 2 our notice prabhu!yes,as u say only by community participation can these companies build long term goodwill…maybe capitalism is not the best answer…a mixed economy maybe?
July 26th, 2005 at 4:50 pm
shuuro,
i shud thank u first for understanding my premise or atleast making an effort to understand the problem i am trying to express.
ok now what u say is whatever IT industry tries to do with other industries is not going to make any difference. well this is a far cry from “why shud we bothered about the rest of the country. trickle down magic will take care” funda by others.
that “we are not responsbile” song put me off in no small measure.
ok for the time being lets put aside abt the valdity of my soln..
my cousin who is an MPhil in biological sciences, an above avge student struggles to make 4k per month as a teacher.
even a doctor does not make more than 10k these days unless he puts in some yrs of exp, specializes in one area, knows the tricks of the trade(scans, lab test kick backs)etc.
a mech engr to whom i gave a lift on my way to office is struggling to make his ends meet while his classmate who happens to work in my company and has done several US assignments.
ok for now lets assume my suggstion was stupid. do any of us have any better solution?
if u too say well i dont care, then the problem ends there…
i, for all my stupidity at least thought abt addressing this issue. my premise was based on some familiar indian middle class logic where one brother when he has made it tries to help the others in the family.
if all these folks swtich to IT industry just bcos it pays well,what will be the status of those professions?
the popular thing was govt shud do something. govt my foot. if at all the govt did why wud india be like this?
July 26th, 2005 at 4:56 pm
@sidharth
glad that u had actually read that part of the post:)
i am not sure abt the others:)
July 26th, 2005 at 6:00 pm
very thought provoking!
glad to hear about laser soft!
my company also does philanthrophy by employing intellectually challenged people like me!
:))
July 26th, 2005 at 6:19 pm
I’m not saying that we don’t have any responsibility towards society and that’s not even in my mind. Let me make myself clear with your example. Let us suppose a brother or a family member represents IT industry, then according to me what you are saying is that he should help few villages and practically this is not possible no matter how good your intentions are. Even if you wish to continue with this, it will take way much desired resources from our companies which they may dearly need to face challenges in the future and most importantly he may not have made much difference to the villages with his meager earnings. It will only make difference to few select people and still then, much desired uniformity among us wouldn’t exists. Of-course this is something different, if you believe that our IT is just a bubble ready to burst and they should diversify their investments.
Please take this views from 26year old unemployed person who doesn’t even have luxury of 4k or 10k earnings!
July 26th, 2005 at 7:50 pm
good points by senthil
July 27th, 2005 at 12:00 pm
@Shuuro
did you know that in Bangalore Infy/Wipro are eating up farmers land for building their offices. these guys buy the land @ dirt cheap price…
why shld agricultural land be used for buildings?? u cant blame the govt for this…
probably, i think ur not fully aware of how these IT so called czrs misuse property
July 27th, 2005 at 11:44 pm
Satish,
” did you know that in Bangalore Infy/Wipro are eating up farmers land for building their offices. these guys buy the land @ dirt cheap price… why shld agricultural land be used for buildings? “
Do you know since our independence agriculture land has been used for providing housing & constructing various industries and their offices? and their is procedure in our land registration act to convert agricultural land for other purposes. In various states there are ministries to promote industries in their state and they do it by allocating govt land(previously used to be either agriculture or forest land) for minimal price with other benefits to attract investment in their states. I suppose your are from TN, just look into your state government benefits & concessions offered to Volkswagen to induced them to setup their manufacturing factory in TN, same has been done by my state(AP) too. If this is generally done then why fume on IT? are there any specific demarcation to any land, which says it is only meant for IT or other sectors? Land don’t have permanent categorizations, suburbs of Chennai once used to be agriculture land!.
Do you know what kind of hardships infosys has to endure in early days to import their computers due to bureaucratic hurdles? and what government has done to improve connectivity to counter challenge from china & other countries? how much did government spend from their world bank loans to address this connectivity problem? For your info, greater connectivity would help all of us not just IT sector.
July 28th, 2005 at 12:39 am
@shuuro
if india has to improve all the sectors in the country has to improve. Not just wipro or infosys.
if they are doing good. fine.
it remains to be seen if they r
real visionaries or just some business people who are having a good time.
everybody suffered with bureacracy during the pre-liberalisation era.
infosys was no exception.
buying up agri land and building huge 25000 capacity buildings is not a healthy trend. be it infosys or any other company.
so what abt the farmers? they shud come to the city as coolies for 10s and 20s or maybe get some rat poison and be done with once and for all?
i wil say this to even HLL not just infosys.
FDI inflow stats will make our forex reserves, our GDP et al look better. but those things are partial indicators. Not the complete picture in my opinion.
growth cannot be unidimensional.
even if its gona take longer its better to ask, beg, demand our industry biggies than take a
begging bowl to unscrupulous MNCs.
its not MNCs fault.
Our politicans are too corrupt.
July 28th, 2005 at 5:20 am
For all the N.Murthis, Premji’s and the gang.
What is the plan for breakfast if the foreign companies say bye bye.!
What is the future of the country if the BPO’s vanish from India.?
Any backup plans?
What do we have locally.?
July 28th, 2005 at 8:07 am
Prabu,
KP Wrote :” if india has to improve all the sectors in the country has to improve. Not just wipro or infosys. if they are doing good. fine it remains to be seen if they r real visionaries or just some business people who are having a good time.
everybody suffered with bureacracy during the pre-liberalisation era. infosys was no exception. “
My comment: Absolutely, Indian development is not just about IT, since you specifically mentioned this point I wonder whether i infer otherwise in any of my posts? or did you lost my point?.
By your definition of visionaries, Perhaps we can conclude that bill gates wasn’t visionary as he didn’t think beyond his IT sector and didn’t diversify his empire!? I disagree that business people could ever have good times, there will always be issues even with fair amount of success.
.KP Wrote: “buying up agri land and building huge 25000 capacity buildings is not a healthy trend. be it infosys or any other company.
so what abt the farmers? they shud come to the city as coolies for 10s and 20s or maybe get some rat poison and be done with once and for all?”
My comment: You are ignoring one important thing here, that agriculture land which is acquired by these companies are bought from government. This means they aren’t in cultivation or no farmer has ownership. If they buy from farmers then i’m sure they wouldn’t part with their land without proper compensation. By raising this issue and portraying it to be specific to IT i feel you have exaggerated problem a bit here. This is general problem related to our rising population and our limited resources, thats another subject of discussion. what i was pointing to Satish is that this has been going on for long time and now why blame IT alone?, Categorization & utilization of land depend on humans and not vice versa.
I wouldn’t agree with your opinion about FDI inflows and everyone has their opinions and i respect that!
KP Wrote: ” even if its gona take longer its better to ask, beg, demand our industry biggies than take a
begging bowl to unscrupulous MNCs “
My comment: To be honest, when i had first read this statement, I felt that there is lot of similarities between your and our communists opinions on FDIs. Opening up markets, implementing reforms and creating proper environment for local and foreign companies to conduct their operations with healthy competition should be seen as begging? and so you don’t care about lot of jobs & opportunities which would be generated from this? and instead you prefer our companies invest in areas with meager capital?. Your writing gives me assumption that you believe we have plenty of billion dollar cash rich companies in IT sector to invest in other sectors. I want my country to develop and i don’t want to bog down in this nonsensical ideology!.
My apologies if i’m blunt in expressing my views.
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