Which is the real IT superpower – India or China?

Discussion in 'China' started by DaTang, Nov 16, 2012.

  1. DaTang

    DaTang Tihar Jail Banned

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    Posted on May 7, 2012 by Indiabourse — 1 Comment ↓

    A Chinese friend recently drew an interesting parallel in a conversation. He compared the impact of China’s manufacturing industry on the average Chinese and that of India’s IT industry on the Indian masses. China has made a mark in the manufacturing industry and along the way it has transformed the lives of almost every Chinese citizen. Is this true of India’s IT industry? I did not have a ready answer and the Chinese never persist with conversations where there might be even the slightest chance of the other person losing face.

    India’s IT sector has served the country very well over the last couple of decades. It has brought in much needed foreign exchange and generated employment for millions of Indians. Indian IT companies have risen to the top echelons of the industry. There is no denying this.

    Until 2008 the industry had never seen a dull year but the last few years have been quite rocky. Nasscom, the industry body has indicated that an annual growth rate of 11-14% is still achievable for the industry as a whole in the coming years. However stock analysts were alarmed earlier this year when many of the top Indian IT companies failed to issue revenue forecasts for more than two quarters for the first time in their corporate lives. Despite this few people doubt the industry’s resilience and one can be confident that India will remain synonymous with IT atleast for a couple of generations.

    Indian IT giants have a truly global presence. Whether it is Uruguay or Uzbekistan, Bournemouth or Brisbane, there is hardly a city in the world that has not received IT engineers from India to work on a client project.

    As mentioned in a previous post, every Indian IT company has a significant footprint in China. Having failed to bag big business from Chinese SOE’s they are sustaining themselves mostly with business from their existing international clients which have presence in China. Projects from domestic Chinese clients are notable exceptions in their order books. China is perhaps the only geographical territory in the world where Indian IT companies do not serve the top players in every industry. It is very clear that the market for IT services in China is being reserved for homegrown players who are still in their infancy.

    Coming back to our conversation, what does a successful industry mean to the country and its people? How much of India has benefitted from India’s IT industry? Is the global success of a handful of companies sufficient to brand India as an IT superpower?

    It has been a couple of weeks since our conversation and the thought has still not left my mind. What are the likely indicators of a country’s IT superpower status?

    I started with researching PC penetration rates. India has a PC penetration of less than 5% whereas China’s average IT penetration is 30% and in urban areas it is close to 60%.

    Next, I looked up broadband penetration. India’s broadband internet penetration is 1.2% currently and set to reach 2.8% in 2016. In the same period, China will be reach 20.9%.

    Lastly I checked out the size of the IT market in the two countries. The estimated size of the domestic Indian IT market for 2012 is a respectable US$ 20.7 billion. And the size of the Chinese domestic IT market is —– hold your breath – a whopping US$124.4 billion!

    Now, is India really an IT superpower? I don’t know the answer to this question but the next time I hear an Indian businessman, politician or bureaucrat trying to showcase India as an IT superpower to a Chinese audience I will certainly wince.
     
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  3. spikey360

    spikey360 Crusader Senior Member

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    India an IT superpower? That is an absurd claim. Which great software has any Indian company made? Which global website started in India? Which top notch programmer originates/works in India?

    The answer still lies in America and European countries. They might be bad in a lot of things, but computers, they are supremely good at. So no, neither is India an IT powerhouse, nor is it poised to become one unless the companies and developers change their attitude and start making software which have more widespread applications than only in financial institutions. At best, we are an IT sweatshop.
     
  4. asianobserve

    asianobserve Elite Member Elite Member

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    China is an emerging IT powerhouse. This cannot be denied.
     
  5. pmaitra

    pmaitra Moderator Moderator

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    Neither. It is still the US.
     
  6. Bangalorean

    Bangalorean Stars and Ambassadors Stars and Ambassadors

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    The article speaks a lot about the Chinese IT market. The only reason Indians (not just Indian IT companies, but Indians) have not been able to significantly penetrate the Chinese market is because we don't have enough Chinese speakers. I was being asked (only half-jokingly) to learn Chinese and take charge of a few clients in China, in 2013. Once we have enough people with knowledge of Chinese, Indians will penetrate their market too.
     
  7. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    The reason India does not get into China has nothing to do with speaking the language. China keeps a monopoly on the industry.
     
  8. badguy2000

    badguy2000 Respected Member Senior Member

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    well, speaking/reading english can not ensure good software industry,especially when you want to get orders from non-english-speaking areas,such as CHina...
     
  9. GromHellscream

    GromHellscream Regular Member

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    US!Outsource is just the little part of the whole chain.
     
  10. cir

    cir Senior Member Senior Member

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    Do Indian IT companies have a majore presence in Japan?

    What about South Korea?How about Russia and the former Soviet states?

    And all those African and Latin American countries?
     
  11. rockdog

    rockdog Regular Member

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    I am a Boss of an IT & Outsourcing firm, let me explain some of my thoughts:

    1. India is the No.1 nation on IT outsourcing field, this is no doubt, and i respect some of those companies
    on my filed (Professional Web based development), Indian firms owns around 70% share at least.

    That's mainly because of several reasons:
    a. English speaking
    b. the whole nation had strong background with influence by Western (British occupied time), which means culturally Indian understand better than China on thinkings and related financial & law system

    c. Good IT vocational eduction system

    d. Weak domestic demanding comparing international demand.


    2. If comparing the IT generated GDP between China and India, China is around 2-4 times more than Indian.
    But most of IT related GDP in China serves domestic market, but India mostly export for outsourcing services.
    This big difference makes India gains good reputation globally, but if compare the volume by GDP, China is still little ahead.



    3. IT is not only outsourcing, it contains something much more: like Hardware, Internet, Telecommunications.
    a. Internet: World's 6 top Internet companies, 3 of them are from China: Alibaba, Tencent (QQ), Baidu, i don't think any Indian Internet company on the list of top20, correct me if i am wrong.

    b. Hardware: the major trade deficit created between India and China are machinery and other industrial finished products, and most of them contains IT components inside. like chips, programs, controls.

    c. On Telecommunication field, companies like Huawei, ZTE are on the top5 in the world, and by the end of 2012, Huawei will be top1 just passed Ericsson. On this filed, Indian still need long way to go.

    d. China has world's biggest IT related manufacturer, even some them just OEM suppliers, it gives a big advantage to local companies for fast implement any domestic prototype and products.
     
    Last edited: Nov 17, 2012

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