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Neha Kapoor

"I don't understand the problem India seems to be having with China. When I talk to my friends in China, they don't seem to have a problem with India."

MUMBAI, Feb. 24

"INDIAis quickly becoming to software and IT-related services as Switzerland became to watches and banking in the first half of the last century," according to Mr Paul Saffo, Director and Amara fellow, Institute for the Future.

A technology forecaster who advises a range of global clients on the long-term impact of emerging technologies on business and society, Mr Saffo in an interview to Business Line spoke about the future of the Indian software industry, H1B visas, Chinese software industry and among other issues during his recent visit to Mumbai.

Excerpts:

What role do you see the Indian software industry playing in the global arena?

The Indian software industry is already becoming the global leader and the rest of the world is just beginning to realise that. And, of course, it started because the country has the reach of cyberspace and Internet so that people can do work remotely. It has all the obvious positive skills - - education, English speaking professionals and the cost advantage. But what I hear from companies, and I advise some very large corporations - some of whom have set up operations here - is that "low cost, of course that's important, but we are finding quality here that we cannot find anywhere else.'' Which is why the US policy, right now, to restrict H1B visas is crazy because if you keep Indian programmers out of Silicon Valley...it is not like there are Americans to do the jobs. It's crazy and would be a disaster for Silicon Valley.Going back to the future of the software industry, India will be in a leadership position and it is going to be a country, which everyone is going to look and say, well, that's the standard we have to meet. So, there is good news and bad news... for one, there will be a lot of people trying to copy India...

China for example...

Well, I don't understand the problem India seems to be having with China. When I talk to my friends in China, they don't seem to have a problem with India. Look at how many Indians are executives of companies in China. Besides, China has a great software industry, but it's a different environment. India has software engineers who are very entrepreneurial, China has great software engineers and it has business people who are very entrepreneurial... but not that many people are both. Also, China is preoccupied with developing software for its internal market - the one thing that

China has is a massively growing industrial base which India does not have; China is the world's largest manufacturer of consumer electronics and it will be the world's largest manufacturer of automobiles in the next three to five years.

Hence, the demand for software engineers to serve Chinese industry is so great that they don't have time to address the export market. That's why India needs to start looking at China as a market, but not as a competitor.

There are a few Indian companies that have set up base in China. Do you see more of that happening...

More of it should...

Do you see more co-operation between Chinese and Indian software industry?

I think this will be a good thing, I have noticed this funny thing... you know, India is country of wonderful people, they are very friendly and it's a delightful place to come to but you seem to have problem getting along with your neighbours! You don't seem to get along with your neighbours, it's a good time to get along with C4ina... and a good way to start will be business.

There is talk about India tapping the embedded software space, among others, as a potential market. In your opinion, what are the new business areas that the Indian industry should target?

Embedded software is a big opportunity and really plays to India's strengths - not only in terms of software but also in design. Also, building new industries is important... take ICQ for example. Instant messaging was invented in Israel, which is not a major computer manufacturer but this whole application came out of there. India also needs to think about developing at the application level - there is telecom, consumer electronics, games development... no reason why India should not be developing application in these areas.

But one of the key opportunities, when you think about it, is Africa. It is the most important global issue... the big issue today is not terrorists or West Asia. It is Africa. If we, as a global society, don't start doing something about Africa it is going to become our problem. A big part of addressing this issue is commercial development. But American companies are not going to do it. They are afraid of Africa, they are afraid of the market being too small and complicated, and American executives don't want to live anywhere that does not have conveniences and lots of fancy hotels. However, India has a huge advantage here... you cannot go anywhere in Africa without finding a handful of Indian businessmen doing great business. India should be saying, `what can our IT industry do in terms of selling into Africa and also do well by doing good...

And, where do you see the current `outsourcing-to-India' wave heading?

The low end of outsourcing is at risk because of automation, so you have to climb up the value chain. Until companies start designing good software, there is always going to be a market for outsourcing.

But I am more interested in the future of outsourcing in a different direction. Telecentres have been a great thing in terms of giving jobs to young people. Jobs that are challenging, interesting, technology centric, that help them with their English... but teleservice work is a job, not a career. People do it for three years. They come in, there is great money but after three years they realise that the money is not all that great, there is no future in it and that they have got to do something else.

In India, all those bright young people who are diverting into teleservices are coming out wiser, and not really that much older. They would be very much useful for business and graduate schools. So, graduate institutions need to change their attitude and not only be open to those students but also actively recruit people from teleservices because they have flawless English, have a good sense of the world and have been talking to people all over the planet for a couple of years...This is a huge, huge resource for India and you have to make sure that these people come to graduate schools.

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