Looking behind India's tech boom
Published: 28 Jun 2005 16:50 BST
Reverse outsourcing
This should lead, at least in the near term, to a form of reverse outsourcing, with US experts heading overseas to provide services for Indian businesses. Indian-based companies, for their part, will need to install an increasing number of employees in Europe and North America to land contracts — which means paying higher Western salaries.
"You need guys who worked on Wall Street," said Jessie Paul, head of marketing for iGate, a Bangalore-based company that provides consulting and other information technology services.
However, while these factors may temporarily slow progress, few expect it to stop the industry. Many Indian companies are becoming more integrated into the business processes of their customers, making offshoring a permanent arrangement.
"The level of people who are visiting us today is very, very high. They are actually the strategic decision makers. In the dot-com days, it was more reactive," said Srinath Batni, a board member of Infosys. Outsourcing, he added, "has become a long-term strategy."
That marathon approach is viewed as a key advantage for India. Many executives and entrepreneurs note that India's tech boom is driven by a demographic bubble that will be difficult to match for other nations. India has a large population of young people who are driven, well-educated and work for relatively low wages.
"The average age of the working population in India is 27 years," said Supratim Sarkar, manager of strategic marketing at Wipro. "That is one of the biggest levers we have."
Not surprisingly, optimism is running high as younger generations come of age. The national exuberance has inspired many entrepreneurs, including Rajesh Jain, who sold an Indian-based Web portal, IndiaWorld, for around $100m in 2000 and who is now incubating companies that he expects will bring computing to the masses in his country.
"For the first time," he said, "there is confidence that tomorrow will be better than today."
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