`India's chance to lead the world': Michael Smith reports on India's information technology revolution which has turned the nation into a `software superpower'

For A Change, June-July, 2000 by Michael Smith

Two mighty rivers flow through India: the spiritual and the technological. They converge in Bangalore. Here one can visit the gleaming International Tech Park, 18km outside the city, or take part in `deep relaxation therapy' at a Swami Vivekananda yoga health centre.

Yoga, increasingly popular in the West, is a Sanskrit word meaning yoking or union--with God and one's own inner well-being. NV Raghu Ram, international coordinator of the yoga centre, has trained staff from over 3,000 companies in stress management. `Your peace of mind is the abode of creativity,' he said at a recent business ethics seminar in Bangalore.

And creativity there is in plenty.

Bangalore is popularly known as India's Silicon Plateau. Cybercafes have sprung up all over the city--as well as over 10,000 nationwide. The IT Park, comprising three huge tower blocks named Innovator, Creator and Discoverer, and a second Electronics City complex represent the leading edge of India's information technology revolution. They have helped turn the nation into a `software superpower', in the words of Bill Gates of Microsoft.

Leading software companies, such as Infosys and Wipro Technologies, are among India's wealthiest private sector concerns, overtaking traditional heavy industries. Infosys made a profit last year of $67 million. When Wipro's shares rocketed on the Nasdaq market last February, the company was valued at $62 billion. Wipro's founder, Azim Premji, suddenly found himself feted as the world's third richest man. But Premji still lives in a modest apartment and drives a small Ford Escort.

Some 250 hi-tech companies are located in Bangalore. The IT Park, built and owned by a consortium of Singapore businesses as well as Tatas and the state government of Karnataka, was officially opened by Singapore's Prime Minister in January. It had already been running for two years and houses some 60 of the world's leading Indian and international software companies.

`This is India's chance to lead the world,' says Dr Udo Urbanek, Co-Director of the German-owned SAP Labs, which occupies three floors of Discoverer. SAP is the world's leading developer of business software for enterprise resource planning, with half of the Fortune 500 companies among its clients. It claims 54 per cent of India's market share and employs 280 Indian engineers in Bangalore. The company chose India as a software development centre, says Urbanek, because Indian IT engineers `are the best people on Earth. People here are very focussed on their careers and self-development'. This is the reason for India's world-beating success, he believes.

Another is the nation's reputation for excellence in science and mathematics. School children learn their times tables up to 30; the Indian Institutes of Technology are world renowned, churning out 120,000 engineering graduates a year; and the nation has over 3,000 computer training institutes.

India's software whiz-kids won worldwide acclaim in rectifying the millennium computer bug. They are less prone to mistakes than their Western counterparts, especially in writing long and complicated software programmes. And they take advantage of the 24 hour clock: while European and American multinationals sleep, Indian experts fix their software glitches overnight. A third of Bill Gates' employees are of Indian origin and up to 50,000 Indian technicians make their way to Silicon Valley each year. Recently, Chancellor Gerhard Schroder appealed for up to 30,000 IT engineers to come from India to bridge Germany's skills shortage.

Indian politicians are also eager to back the IT revolution. The central government gives IT companies tax breaks and February's budget slashed import duties on computer hardware and software, from motherboards to CD-ROMs. `India's ruling Bharatiya Janata Party ... has made information technology the cornerstone of its political agenda of generating high economic growth while surrendering little sovereignty to multinationals,' wrote Business Week.

It all adds up: software exports were nearly $3 billion last year, and are heading for $5.7 billion this year. Studies suggest they could eventually reach $50 billion, or a third of India's entire exports. In the domestic market, computer sales are forecast to increase by 65 per cent this year, while India's net surfers are expected to grow from two million to some 70 million over the next three years.

The great rivalry now is between India's two main centres of IT excellence: Bangalore, the state capital of Karnataka, and Hyderabad, the capital of Andhra Pradesh. Andhra's Chief Minister, Chandrababu Naidu, is known as the Chief Executive because of his businesslike approach. He returned from the World Economic Forum in Davos enthusing about his conversations with Bill Gates, designed to sell his state as India's up and coming IT centre. Naidu talks about Andhra becoming India's SMART state--`simple, moral, accountable, responsive and transparent'.

`What does Naidu have that others don't? Basically vision,' editorialized The Indian Express. `From privatizing power, to setting up software development centres to sponsoring conferences for investors, the Andhra Chief Minister has been promoting his state with unmatched zeal.'