The Year of Global India

I really like the fact that in our annual Dataquest Awards of December 14, which
this issue celebrates, the three achievement awards happened to cover, by happy
coincidence, the three most key areas for our tech industries.

The Person of the Year is the face of the software industry,
the president of its software association and the man who helped
institutionalize it, also helping steer the software and BPO services exports
industries through some trying times of late. The Lifetime Achievement awardee
is a man who helped set up the foundations of the domestic industry, hardware,
and manufacturing, decades ago. The Pathbreaker award went to a man in
government, who’s driving India’s e-gov agenda.

These three fronts will decide India’s tech future, its
economy, its role in the world.

The services industry is at a turning point. It’s reached
scale, dominated by a dozen-odd companies. Only three have crossed $1 bn, though
by end-fiscal, another couple could be hovering there. They’re all smaller
than the global services and consulting giants-which is important as they
compete with the latter, set up base across the world, and hire global
workforces-but they’re growing way faster than their foreign competitors. In
2006, the industry will need to consolidate its learning from the
anti-outsourcing wave. And look at reinventing itself and redefining its value
proposition across the board, as the cost arbitrage edge becomes slimmer.

I had a chance to see a nice parallel this month: Ireland. It
started with tech services and a cost advantage, but gradually became one of the
world’s most expensive economies, an was forced into products, innovation, IP.
Today it’s a powerhouse in those areas (not to mention manufacturing, helped
by a 10% tax rate).

But the big area we’ll really be watching and covering will
be the domestic industry. That’s at its most exciting threshold ever. It’s
matured, maintained healthy growth for three years now, and attained a healthy
mix of hardware, services and software (barring gaps like the packaged software
area, still under pressure from piracy). India is set to become a really
significant part of the world market-interesting enough for all global tech
players, and perhaps even for a few of the Indian services majors…

A key part of that domestic market in 2006 is e-governance.
As the pilots scale up-albeit rather slowly-into live projects and are
replicated, this becomes more than just a market segment or vertical. It becomes
a key part of governance itself, of the future of the country, and of its
billion-plus people.

So as this calendar year closes, and this fiscal also winds
down at over $35 bn for India’s tech industry (domestic market and exports, including BPO),
we enter a very decisive year for tech-and for Global India.

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