Is IT the Panacea?

From the editor

By Jason Pontin

April 2, 2001 12:00am

INDIA, You have a big problem.

http://www.redherring.com/index.asp?layout=story_generic&doc_id=RH1590018359

I am back from a jaunt to the subcontinent. Thanks for the hospitality. I had a blast. Dinzal, man, you shouldn`t have; Dewang, dude, you`re a hoot. I have a friendly, if not quasi-colonial, interest in the land of cricket-mad programmers. I mean: I want India to do well, and I think it needs my help to do so.

Last year, I told the annual meeting of India`s National Association of Software and Services Companies (NASSCOM) that pursuit of riches through dot-coms would end in tears. In February 2000, on a sweltering day in Mumbai, formerly Bombay, I argued that consumer Internet companies were, in one way or another, regional businesses -- such companies either sold local products and services, or advertising for those products and services -- and that India didn`t have much of an Internet. There were only 2 million Indian Internet connections and, charitably, 10 million Indian Internet users. If the United States couldn`t sustain many profitable consumer Internet companies (see ``Hybrid B2Cs deliver``), how would India? I urged the entrepreneurs at NASSCOM 2000 to invest in software products and services -- India`s traditional technology businesses -- whose markets are international. The audience hissed. They were looking forward to their companies` public offerings on the Nasdaq. One month later the market for Internet equities crashed, taking with it venture funding of Indian startups and the entire Indian Internet economy.

This year, although India admitted my earlier perspicacity, I have offended the country once again. At NASSCOM 2001, I said that now India`s software services industry is in terrible trouble. Its growth is slowing or even stalling. India, I insisted, must begin to sell branded software products and premium consulting services with higher profits. It must cease to be the sweatshop of international software. For my pains, the Times of India (and others) called me ``the prophet of doom.``

The argument matters. It matters to India because developing cheap but reliable software for other people is big business. The Indian software development sector, with companies like Wipro Technologies and Infosys Technologies (Nasdaq: INFY), grossed annual revenue of $5.7 billion in 2000, according to NASSCOM, $4 billion of which derived from exports. Last year, almost two in five of all Fortune 500 firms outsourced some of their software development to India. Almost 10 percent of India`s gross domestic product, and 11 percent of its exports, are IT related, according to a recent Merrill Lynch survey.

It matters to the rest of the world, too. Indian software services firms train the world`s best, most creative, and most industrious software engineers. When they come to the United States, Indian engineers make U.S. developers look conventional and unimaginative. If the Indian software industry foundered -- and ceased to produce extraordinary talent -- it would be a pity for everyone concerned.

But as an industry, it is wonderfully dependent on American capital spending. With the slowdown in the U.S. economy, spending is dropping steeply: according to the Economist, it fell for the fourth consecutive quarter for the first time in nine years. Half of all U.S. business investment is in IT. Inevitably, the Indian software services industry, which has been growing at more than 60 percent per year recently, will be hurt.

NASSCOM`s president, Dewang Mehta (who looks a bit like an Indian Elvis), says the new cost consciousness of U.S. companies will actually help India: U.S. firms must continue to invest in IT and will spend more in India because India is the cheapest place to do it. This is bunk. For the foreseeable future, U.S. firms will spend as little on IT as possible. The idea that investment in IT is immune to cost cutting is false. Companies will spend just enough to maintain their existing systems -- and, by NASSCOM`s own admission, only 17 percent of the revenue of India`s software services industry derives from maintenance.

But more worrisome for the long term, India is no longer the cheapest place for software development outsourcing. Salaries have increased many times in the last few years, billing more so. This will only get worse. The Economic Times of India reported recently that both Wipro and Infosys will outsource some of their work to China. In other words, India is becoming a middleman -- and we all know what happens to middlemen in the Internet era.

The Indian software industry must, in the jargon of the business schools, ``move up the value chain.`` It must develop its own international brands. Insofar as it remains a services industry, it must offer its customers strategic consulting, and better understand Web-based and e-commerce technologies. To that end, India must invest more in research and development: R&D accounts for only 3.4 percent of all spending in its software industry -- a sadly paltry sum compared with how much is spent by the U.S. industry. Only then will India have its own domestic Juniper Networks (Nasdaq: JNPR), its indigenous Computer Associates (NYSE: CA).

Write to jason@redherring.com.

Romair:

A correction:

Personally, I have, hardly ever, come across any [professional] woman from Pakistan[regardless of the social strata she hailed from]who indulges in such baikaar [certainly, a relative term] activities.

Addendum to my last post:

There were a few sweeping statements in your last post, aside from the great suggestions. Your thoughts on women married to rich husbands and etc. made me jot down a few brain-teasers:

a) How many women in our country are independent-minded?

b) How many of them have the concept of self-worth?

c) The ones who do not have the above or haven`t ever heard of the concepts, what`s the reason behind that? Who`s the true culprit? Let`s hear from the logically insightful ones.

d) While you were growing up in Pakistan, what`s the % of enlightened men that you came across(in school, college and university)?

e) How many of those enlightened souls were/are capable of having a spouse who could actually complement them intellectually?

f) It was easy to give an example of Indians. My experience has been that most of the Indians in the US are well aware of their self-worth. Specially, women. I also feel that the women are raised a little differently. In our case, majority of our women, regardless of the social strata, are born and bred in a very sheltered and protected environment. In many cases, they may have the talent and the desire to pursue, but due to the limited opportunities and/or support from their families they aren`t able to pursue. I have met quite a few cases where the husbands were jerks and the wives were making sure that they keep their marriages alive. I have also seen a lot of divorces and maltreatment of women among Indians, but as the women have that thing in them to stand up on their own, therefore they continued to forge ahead. Also, the concept of community is very different among Indians. Let`s not try to compare apples with oranges. Let`s go back and evaluate our social system first!

g) You talked about your association with various IT orgs. How many times you`ve convinced a chap to send his wife to school ? If yes, please share the info. If no, please enlighten why.

h) On the communication styles among men and women: I watched a video a few years back by Debra Tandon or something like that. If you ever come across this video, do care to watch it. There may be some revelations! This video focuses on different communication-styles in the corporate US and has quite a few excellent case studies. The case studies go back and focus on the psychology as well as the little girls`/boys` ways of making friends. Kind of very cute, but very realistic as well. Once you watch it, please do share it with other chaps. It may be very enlightening for the whole herd!

i) Lastly, I requested some information on the coffee parties. I never heard back. That`s the difference between being with IOPWE than on Chowk. Once you are in a network, you are part of a clan. Once you are reading or sharing views on an interactive magazine, there`s no obligation to share information or respond to a genuine query. I hope you see my point here. I will only need to know the locations in Sacramento, San Jose, Santa Clara, San Fran, San Diego, and L.A. Hope that assists.

Kind Wishes.

correction # 99``provided the people making the judgment have to vested interests``

should read

``provided the people making the judgment have no vested interests``

shankar #90: I agree with everything you stated, except the last part.

It is correct that a completely unbiased individual does not exist. Even a person who is consciously unbiased, will more than likely be sub-consciously biased, and will thus not be aware of it. The only issue a person may be able to be completely unbiased about is something in which he/she has no interest. I could probably give an unbiased opinion on the benefits of growing oak trees vs. growing maple trees in New Zeeland. However, I probably could not give an unbiased opinion on a cricket match between New Zeeland and Australia, even though I do not belong to either country. For the simple reason that I do follow cricket, and have probably developed biases during matches between Pakistan and New Zeleand, and Pakistan and Australia.

The key is to reduce the biases as much as possible. The first point in this regard is to have knowledge of the area. Or openly declare that one does not have knowledge of the area. Whenever I comment on something going on inside India, I make it a point to state that I have never lived in India, so I do not know too much about its internals. I also attempt to quote either Indian or international sources. The only areas related to India on which I attempt to speak with some authority are Kashmir, Indo-Pak arms race/conflicts, Indian IT pros in the US. That is because I have experienced these areas and have done some research on them. However, in these areas, due to obvious reasons, my opinion will be considered pro-Pakistan (even if it isn`t). So whenever I criticize India in any of these areas, I attempt to quote third party credible (very important) sources.

It is incorrect to state that even these sources are consciously biased. They may have some partial biases, but those are minor. For example, Amnesty International is generally considered quite a fair broker. My biases towards Kashmir could be considered pro-Pakistan, but AI`s biases would be microscopic, and more than likely unintentional. There are other organizations like that, as well. These organizations and individuals have taken decades to develop the reputations they now possess.

Keeping this in view, I think it is impossible, for example, for a Pakistani`s views to be taken as unbiased on a topic related to Indo-Pak conflicts. It is also impossible for a Muslim to be considered unbiased on a topic related to Muslim/Hindu conflicts. Vice-versa on both those issues. So if a US news station wants to get their views on the Indian IT policy, or if a US university wants to teach a class on the Kashmir conflict, the last person in the world they should hire is a Pakistani. For the former, they should hire an Indian. For the later, they should rely on a neutral party with a good track record, perhaps a representative of AI.

My knowledge of psychiatry and psychology is limited to the two courses I took in college. One thing I did notice was that it is an extremely fuzzy subject. There could be many different analyses for the same disease/problem. It did not seem like an exact science to me. Did a man commit a crime because he was molested as a child, or because lost his job? It seemed a lot more subjective than say sex education (if a girl is pregnant, it couldn`t have been because she lost her job) or even business subjects.

I think due to the fuzziness of psychiatry (at least whatever I know of it), it cannot be used as a benchmark for deciding the biasness of neutral professionals, in general. The subject itself is so subjective that two neutral unbiased professionally qualified psychiatrists could reach opposing conclusions on the same issue. However, other issues and fields like human rights violations, successful IT policies etc. can be judged by hardcore ground realities, provided the people making the judgment have to vested interests and are not consciously biased about the subject.

In this regard I would have much more faith in a judgment made about Pakistan`s IT policy by Bill Gates, then I would I would by Ganguly, or Dr. Ata. Similarly I would have more faith in a comment regarding Kashmir by AI than I would have in a comment by Ganguly or Musharraf.

Dost-Mittar

``Almost all these entrepreneurs come from the middle or lower middle class in India. If you look at the who`s who of the Indian IT-wallahs in India and the silicon valley, none of them (with the possible exception of WIPRO`s Azim Premji) was born with a silver spoon in his/her mouth. ``

This is the most heartening aspect of IT revolution in India. That it is powered by people from average middle class and not by the rich elites makes me more hopeful about India`s future. To be specific, I can tell you about Kanpur. A decade back, people used to think that one can not become rich no matter how educated he is, until he is the son of some wealthy person/politician. Today ten years later I see a drastic change in their attitudes. Most of the people are heavily investing in education as a means of moving upward in the society. People have now realised that inspite of all corruption, you can go up if you have the required skills. So obsessed are people with higher education that they are prepared to sell their property to educate their children. And no doubt, the visible success of a lot of people from the lower middle class who made it to the IITs/RECs is playing a pivotal role. Consequently a lot of new and better secondary schools have sprung up and the existing ones are desparately trying to improve the quality of education that they provide. This strong schooling system is laying the foundation of a sustainable knowledge revolution in India in the next decade. A revamp of public school system in response to the demand of educated and highly trained people is the core area that would ensure the availability of a large pool of qualified technocrats in future. As you might know that the poverty decline has shown the steepest gradient in the last decade and only 26% of Indian population is below poverty line against 37% previously. Thus it appears that the prosperity is not limited to middle class but is seeping down to the poor classes raising the standards of living of the population as a whole. There is a sense of exuberence among most of the Indians today and a hope that a better future awaits them. And most importantly, a feeling that they ``control`` their future. The weapon this time is education of course.

AeishA # 96

Dear Aeisha,

You have asked very relevant and appropriate questions. So long as the social issues of dowry, bride-burning, casteism, female infanticide and the economic issue of poverty are not addressed systematically and collectively, Indian will continue to carry a blotch of shame on their heads. I do.

Thankfully, we here on Chowk are not a representative sample of Indians. There are many many Indians who are actively trying to purge India of such evils. But you are right: the challenges are huge and all of us need to focus on these real tasks more than we do.

It is much easier to criticize others than to focus on one`s own shortcomings: one of the reasons human problems never seem to go away.

#96 AeishA

The horrific violence against women is the flip side of the wealth that is being created. Men in the lower rungs try to climb up quickly by extracting bigger and bigger dowries. If the bride`s family had the kind of money that is demanded, they could support her for life. (Of course she could work and support herself too if she had minimal skills/education). What the woman gets then for the money is sex. There is another name for that. We Indians look the other way when confronted with the problem of dowry and justify it many different ways (without condoning the violence, I hasten to add - but violence is a significant byproduct). The Indian middle class has caught money fever and we will sell our souls and burn our women and put our elderly out to pasture if need be!

ROmair,

People fight for their rights in all the countries of the world. They do that in India and they do that in Pakistan. Would it be acceptable if Indian volunteers went to Pakistan and

helped the Pakistani people fight for their rights?

When Sheikh Abdullah, the universally accepted leader of the kashmiris, swore by the

Indian constitution, the kashmiris became Indian citizens. The legitimate complaints of those

Indian citizens must be addressed by the Indian govt. Pakistani volunteers have no business

doing their voluntary work in India.

re ROmair #87:

``Any buffoon knows that the Kashmiri uprising is indigeneous``

Thank you for confirming my suspision.

later

-sac

Romair #87

Roamir, can I ask you a question?

Would you say that the Taliban were an indigeneous Afghanistani phenonmenon?

Ref ROmair:

``I wouldn`t be surprised if his views fit in line with the views held by most Indians. So they may not appear biased to you. However, this is the whole point I am trying to make, i.e. if a person`s views only fit into the views of one party in a conflict, those views cannot be considered very objective``

I didnt say I consider him unbaised.

Do you consider your views as objective?

Re: ROmair

``When this guy states even the obvious (like the Kashmiri uprising being indigeneous), ``

You are supposed to be some hotshot Paki IT fellow aren`t you? This says doesn`t say much about your intelligence.

Umairr/Romair,

What the heck should I call you these days?:) I think your post #87 was a masterpiece! Your unique way of arguing a point makes a believer out of me; even if I conciously may disgree with some of what you say. I think you are a FANTASTIC spin doctor. I sincerely mean that as a complement & I `ll tell you why.

Let me argue some of your points ( which I both agree & disagree with). You place great faith (perhaps faith is not an accurate word) in the opinion of ``neutral`` ``experts``.

I`ve put both those words in parenthesis because of the following. It is impossible for ANY human being to be absolutely neutral. Biases are built in every human mind. For instance, your biasis will always be pro Pakistan (no matter how much you criticise Pakistan); the same goes for me--no matter how much I condemn GoI`s policy re Kashmir, my biasis will be pro India. Then again, if we have to compare Germany to France, even if we think we (as in S Asians) are neutral--we will have our own biasis about them. Sure our own opinion will be less bias than a Frenchman or a German. But you cant completely eliminate bias.

As for the term ``expert``. You got to forgive me, but I`m very cynical. Soon after my residency in psych (in the mid 80`s) I worked as a court psychiatrist (with a few other psychiatrists) for about 6 months.. The chief judge in question was sick & tired of ``expert psychiatrists`` bought into court (for a handsome fee) by both plaintiff & defense experts. Those ``experts`` would give diametrically opposite opinions & conclusions of the same issue! So he dissmissed them as being ``hired guns`` who are completely biased to ``which side their bread is being buttered``. So he figured that if the court paid the psychiatrist, he/she would be absolutely non biased & neutral.

So he started a pilot program of getting funding from the State to have the Govt of NY pay our salaries. Heres the funny thing--even us ``completely neutral`` psychiatrists came to diametrically opposite opinions & conclusions about the same issue!!!--it all depended on whether we were subconciously conservative or liberal!!!

Now thats what happens with ``experts`` of ANY inexact science---be it psychiatry, economy, foreign policy, domestic policy, religion/morality, IT policy etc etc etc. So if you can quote an American expert with pro Pakistan views, I can turn around & get an American expert with anti Pakistan views. Now both these guys will be telling the ``truth``. But it all depends on how they SPIN the truth. Incidentally, its perfectly legal & ethical to put a SPIN on the truth because ALL of us have our own biasis about almost EVERYTHING.

The only power that is completely neutral, completely, non biased(? I wonder sometimes) is GOD. Needless to say, He`s a complete expert on everything.

However, we live on Earth, not Heaven. In the ideal world we could have the ``luxury`` of an American raised in Pakistan being a TRUE expert of Pakistan. But do we always have that luxury in the real world? Besides, would that NEUTRAL American ``expert`` be completely NEUTRAL? How do you know?!, maybe he was insulted by some Pakistani & subconciously he hates Pakistanis (because of a stupid prejudice) or conversely treated like a king in Pakistan ,in which case his opinions are totally biased pro-Pakistani.

So ultimately, in my opinion, the views of ``neutral experts`` about ANYTHING are just about as valid or invalid as those of ordinary laypeople Chowkies, who are obviously biased towards the side of the border they were born in.

Sridhar, romair

gremlins seem to have caught my posts, let them have a rest.

regards

jay

harimau #85: ``going so far as to say that the struggle in Kashmir is indigenous.``

This is exactly my point. When this guy states even the obvious (like the Kashmiri uprising being indigeneous), it is considered objective analysis.

Any buffoon knows that the Kashmiri uprising is indigeneous. Pakistani volunteers are aiding in the uprsing, but the uprising itself is indigeneous, and supported by an overwhelming majority of Kashmiris. The Indian govt. knows this (if it didn`t consider the uprising indigeneous, it would have held a plebescite there decades ago). All the international human rights organizations know it. The US govt. knows it. Deep down in their heart of hearts, all the Indians know this also. The only people who do not know this are the ones who have extremely biased opinions. If the benchmark of a person`s objectivity is that once in a blue moon, he will state the obvious, then wouldn`t that indicate that he is biased?

As a matter of principle, a person who is a professor (not in India, but in the US), and happens to be an Indian, should ethically refrain from commenting on the internal matters of Pakistan; lest his views be considered biased. Or at the very least, that person should highlight the fact that he is commenting about a country with which his native country is at war with, and a country within which he is not considered an objective analyst. If Mr. Ganguly was working for the BJP in the Indian Embassy, one could understand that he has to portray the Indian point of view on everything. But he is not. He is a professor in a third country, USA.

I think, for a person to be considered an expert on a certain country, there should be a pre-requisite that person have at least spent a significant portion of his life in the country on which he/she claims expertise. If he/she hasn`t done so, than he/she should refrain from acting like an expert in that area.

bong_dongs: #84: ``Can you cite instances of his bias?``

I have seen Mr. Ganguly speak on US TV every now and then, and have read various articles written by him on Pakistan. His views are generally completely one-sided, pro-India. One would think he was a member of the Indian govt., not a professor in America. I am not quite sure how he can comment with such authority on the Pakistani society, when he didn`t even grow up there. I am sure there are plenty of Pakistanis who have quite a bit more knowledge of Pakistan than he does. In my opinion, when the US press contacts him, they are generally trying to get the Indian point of view on Pakistan. Even in the article in the previous reply, Mr. Ganguly was shown as the, ``negative`` on Pakistan, while the Pakistani guy was shown as the, ``positive`` on Pakistan.

``At best Ganguly, who called Pakistan`s IT policy is a lot of ``smoke screens,````

I have been following Pakistan`s IT policy since it was put out, and even I cannot say with any amount of certainity whether it is a smoke-screen or not. Even though, IT is part of my profession and I grew up in Pakistan, and worked in the Pakistani beaurecracy for a decade. How can Mr. Ganguly be so sure?

``And that`s not even factoring in corruption, noted Ganguly. A few years ago, a Swiss group ranked Pakistan as one of the most corrupt countries in the world, second only to Nigeria, he said.``

This is true. However,

``NEW DELHI, OCT 26: Transparency International (TI) India, a non-governmental `peoples` coalition against corruption`, said on Tuesday that according to a study it had commissioned, India was among the most corrupt nations in the world.

India was ranked 73rd among the 99 countries covered by the study conducted by Gallup International (GIA), a press note by the TI said....Pakistan was perceived as being more corrupt than India, though only marginally, ranking 88`` (http://www.indian-express.com/ie/daily/19991027/ige27045.html)

So if India can achieve so much IT success, despite being marginally less corrupt than Pakistan, then why cannot Pakistan do the same.

As far as his documented biases are concerned, as much as I would like to satisfy your request, I currently do not have the time to go through all my notes. I would suggest you do a search on his name, and you will find plenty of articles covering his views on Pakistan. If you are unable to come up with any info, in a week or so, kindly let me know, and I will be happy to assist you.

I wouldn`t be surprised if his views fit in line with the views held by most Indians. So they may not appear biased to you. However, this is the whole point I am trying to make, i.e. if a person`s views only fit into the views of one party in a conflict, those views cannot be considered very objective.

It should obvious from Chowk, that it is impossible for Pakistanis to be objective about India, and Indians to be objective about Pakistan. Keeping that in mind, I would encourage everyone to rely on the information provided by independent analysts from third party countries, and internationally recognized human rights organizations. Mr. Ganguly does not fall into either of those categories.

Dear All:

I received some emails with great comments on iopwe`s website. It will be great if all the folks who are interested in sharing their perspective/giving the feedback can put their comments in the ``comments section`` on the website.

Or

Just post your thoughts on the bulletin board. Please do care to write a subject in the subject-line. I hope that won`t be asking too much.

Thanks for taking the time to give your feedback.

Regards.