India, the Billion-person Paradox

If they can’t even pave a street, why should we trust them with our IT networks? That’s a tongue-in-cheek question, but I had to ask myself that very thing after recently spending three days in India visiting the likes of Wipro, Infosys, Cognizant and Sutherland, some of the largest system integrators and BPO operations in the world.

During the trip we stopped in Delhi (our office is in Gurgaon), Chennai and Bangalore. Each was a little different but still some of the same paradoxes exist. It's an extreme mix of subsistence poverty side by side with emerging wealth, of crumbling infrastructure and four star hotels, intelligence and work ethic paired with apathy and acquiescence. We now have an official corporate presence in India (took more than a year of red tape), and still for us, despite the harsh price competition and vibrant gray market, India still represents a significant opportunity for CompTIA. For the rest of the world, I’m not so sure.

Authors like Thomas Friedman and others have glorified India, building it up as a paragon of global competition. They talk about gleaming campuses and cadres of engineers working on everything from IT to medical research, but when you peel back the layers, it’s not as shiny as looks from the outside.

The reality is, the country is gripped by massive government corruption, unbelievable subsistence poverty and a seeming ambivalence or unwillingness among the populace to demand something better. You might not side with the Tea Party or the folks occupying Wall Street, but at least they’re attempting to hold politicians accountable. In India there are still significant numbers of brown outs, poor water quality, traffic like you can’t believe, and infrastructure that’s just a disaster. When I asked one of our staff living and working there, what was demonstrably better compared to five years ago, he struggled to come up with anything.

The country’s education system is producing quantity but not quality. We’ve had the chance to take a look at a substantial amount of curriculum taught in India and it’s lacking. The relative quality of a PhD in India in many fields is not much better than an undergraduate in the United States.

When you go to a meeting and everyone in the room has those little three letters after their name, you get the picture. India’s approach to IT (like the Chinese) is still very technically oriented. The BPOs in particular are the tech equivalents of legions of tradesmen building an office or laying railroad track in the 1800s. Each does their job according to spec, but where’s the sizzle? Where’s the innovation? Indian IT businesses are still much better copiers and optimizers than they are creators.

They are also still competing almost entirely on price. If you take away that advantage over the long term, it’s going to take a lot more to keep business. Customers the world over are demanding integrated solutions that answer their real business challenges. But if you don’t experience those demands in your own market, how can you possibly hope to serve them effectively, especially from thousands of miles away.

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