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An E-Push For The Economy

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DQI Bureau
New Update

When the Indian business community remembers just bits of 1999, they’ll be bits bounded by e- or i- or .com. And many zeroes. The Rs 500 crore IndiaWorld buyout, the Rs 10,000 mark for a Rs 10 Infosys share, the staggering market caps of Wipro and Infosys, the dizzying heights of a Sensex riding IT stocks.

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It isn’t just the Sensex that was driven crazy by tech fever. Markets all over the world saw startups with near-zero revenues getting overwhelmed at their IPOs, companies in the red seeing their market caps at dizzying highs...

As we entered January, Wall Street’s three major indices surged to record highs, pushed by tech stocks–Nasdaq, Dow Jones and S&P. Linux companies posted losses while their stocks soared. Red Hat, VA Linux, Cobalt and Andover.Net (which owns the slashdot site), all in the red in the October-December quarter, broke their own records, and their combined market cap crossed $28 billion. The 1999 startup LinuxOne, with zero revenue and no products, decided on a $25 million

IPO!

The world is clearly entering the 2000s in a tech and dot com frenzy, on a foundation of present IT activity and future dot com potential.

E-business is expected to cross a trillion dollars by 2008. A study puts the Indian and NRI component at $10 billion.

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So how much of the global infotech pie will India take? 

A fifth of the Fortune 1000 outsources to Indian software and service companies. This sector grew eight-fold in ten years, to nearly $4 billion. Can it double the growth in the next ten years? 

A NASSCOM-McKinsey study says it can do better–$87 billion by 2008. With $50 billion in exports, up from $3 billion. 

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McKinsey paints this scenario for 2008: a market cap of over $225 billion, at least 10 Indian MNCs with revenues of over $2 billion each and a few hundred listed companies.

The impact, of course, reaches far beyond the IT industry, to India’s economy. Software and services will be a third of India’s exports, over 7.5% of GDP growth and 2.2 million jobs, and up to $5 billion in

FDI. 

There’s hard work ahead, from datacom infrastructure to venture creation and more. But the industry model changes are visible: a move from ‘body shop’ to onsite to offshore project work, an international marketing presence, and even overseas acquisitions. 

It’s an ambitious vision, but so was the $400 million export challenge from a bureaucrat early last decade. And it’s telling of infotech India’s recovery from the closing gloom in the past millennium, that industry persons say: Can Do.

It’s a great note to enter 2000 AD on.

pkr@cmil.com

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