Tuesday, May 15, 2007

India's Technology Numbers- Can Companies Help?

For a decade India has been meeting the need for outsourced information technology work. The numbers have been incredible. The top five companies have all grown at compounded annual rates of over 40 in the past six years. TCS, Infosys, Wipro, Cognizant, HCL and Satyam are billion plus companies. The recent quarter's earnings were well on track with the 40 percent growth rate continuing. All this amid reports that the talent may be in short supply. Is this true?

The alarm bells have been ringing for a year now, first from NASSCOM, then from the analysts and now the press. How does this measure up against the realities that I see when I go to India, so many bright young people who would still rather be employed at the good salaries that IT companies turn out? Infosys' Gopalakrishnan had mentioned in the press a month ago that it is not the dearth of people but the dearth of quality people that is a problem.

So many strategies have been put forward. The top companies have been building up development centers outside of India, in China, Eastern Europe and Latin America, thus strengthening numbers for multilingual development and support. They have also been developing centers in smaller towns in India such as Chandigarh, Cochin and Vizag. Wipro has been investing in the US, in lower cost regions such as Idaho and Virginia, establishing connects with local universities. True to their nature, the companies have been thinking and acting fast. This is commendable.

I do have a pet gripe, though. Though the IT companies have generally been socially conscious (especially their founders), I am disappointed at the low level of grassroots development they are fostering to improve the quality of educated young people in India. The Azim Premji foundation and the Infosys Foundation are initiatives aimed at basic education. This is noble indeed and arises from the philanthropic proclivities of their top managements. I strongly believe, though, that these companies would do well to invest in improving education at the university level from which they could tap into the resource pools. Nothing compels charity as direct returns, and I am more than a little disheartened to see very little of such nexus between the IT industry and the local education system.

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