A Perspective and the Road Ahead

Inherent legacy
While the number of these well educated, university degree holders have been swelling over the years, the overall economy has lagged behind, in terms of value-added returns. For example, we have traditionally exported perhaps the best shoe-uppers, but some one else would make a complete shoe from it and sell under their brand. We would produce some of the best cotton fabric, but would have to sell the garments under someone else's brand name. We would export the metal ore in only semi-purified form and import the purified metal at much higher prices, even for our own consumption.

The IT Scenario
The Indian IT scenario has not been much different either. With the domestic market growth remaining sluggish for many years, the industry focused on the developed nations, and the lack of proximity to the end customer meant that for years we specialized in providing services rather than solutions and products.

The profile of the Indian IT Services has been undergoing a change in the last few years, partly as it moves up the value chain and partly as a response to the market dynamics. Economies of most of the developed countries are currently in the early stages of, what I think, a ten-year growth cycle, primarily fueled by the Internet, mobile communication and biotechnology. There is an acute shortage of manpower required to maintain the levels of current economic growth in these countries. India is one of them. The professional services market, which was in its infancy ten years ago, has grown significantly ever since and is now rapidly consolidating. Ten years ago, most US companies would not even consider outsourcing some of their IT projects to outside vendors. Now, ten years later, a vast majority of US companies use the professional services of Indian Software engineers in some manner, through large, medium or small companies or through individuals recruited directly.