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NASSCOM Does Some Brain Racking

Slowdown or not, NASSCOM is still eyeing Indian software revenues of $77 billion by 2008. Just what will make it happen? To get a strategy together, it got some top minds to meet in Hyderabad at the India IT and ITES Strategy Summit 2002. A report on what came of it.

For investors who went into a tech-stock buying spree and then into comatose after their stocks melted like alpine snow in the Indian summer, the Nasscom IT and ITES Strategy Summit held in Hyderabad in the second week of June, would have been like a strong, timely dose of Prozac. If anything, the rhetoric at times tended to raise fears of A possible overhype-underdelivery scenario, once again. The Nasscom-McKinsey Study released on the occasion doled out numbers the crest-fallen techno-players were only too happy to hear. Come 2008, and the study says, the Indian IT and ITES industry would account for over 7 per cent of the country's GDP resulting in 30 per cent of India's foreign exchange inflows and will create over four million jobs and most importantly bring in US$ 77 billion (Rs 3,77,300 crore) in annual revenues with exports accounting for as much as US $ 57 billion. (Rs 2,79,300 crore). Hard to believe? Sample this: The revenues of the Indian IT services and IT-enabled services industry grew from US $ 3.1 billion (Rs 15,190 crore) in 1998 to US $ 10.3 billion (Rs 50,470 crore) in 2001-02 and what's more, bulk of it came from exports, which have grown from US $ 2.6 billion (Rs 12,740 crore) to US $ 7.8 billion (Rs 38, 220 crore), a whopping growth rate of 43 per cent per annum.

The big numbers and great potential not withstanding, there was a crucial difference in terms of the way the numbers were looked at this time. Unlike the earlier Nasscom-McKinsey report which set out a vision and the enablers to achieve them, the latest report suggests specifics in terms of strategy to achieve the goals, which demands serious and accountable actions from both the government and the industry.

Apart from expanding the market domestically and exploring newer markets globally, the major challenge for the Indian IT and ITES sector is to stave off the aggressive challenge put up by countries like Korea, Philippines and Canada who have already made a mark in the niche areas of animation and special effects. China is gearing up for its 2010 expo, by which time, almost every urban Chinese is expected to be able to speak English. Little wonder, Ronald Radice, member technical advisory board, Carnegie Mellon University, US, says, "Other countries are getting more aggressive and I am not sure to what extent is India aware of this competition.'' According to him, it is increasingly important for India to focus on quality as a differentiator. One could argue that we still have time till 2010. But if long-pending legislations on fiscal responsibility, labour laws, electricity tariff and banking reforms are any indication, we are certainly not moving fast or as the nerds would want to say "@speed of thought." To this list, the Union minister of IT, Communications and Parliamentary Affairs Pramod Mahajan has added hopes for convergence bill that he feels could be enacted by the year-end along with possibly the much needed data protection law. "Not one Indian institute teaches US GAAP. This is when we plan to capture 4 per cent of the global market. But, look at countries such as China, the Philippines and Ireland. They have already got their act together,'' laments Raman Roy, president and CEO, Spectramind. "Also, for small and flexible companies, there is a significant market, provided they look at the domestic market, become tier II suppliers to large companies and in the export market define a niche for themselves. For example in R&D, embedded services business," says McKinsey & Company's Gautam Kumra, one of the KEY authors of the report.

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