Last week, I happened to visit rediff to read about top ten software companies of India. It nicely explained the achievements of top ten software companies including TCS, Wipro and Infosys. There I got the idea to discuss whether the Indian software industry is going in right direction or not. Let’s first see the data and reports released by NASSCOM(National Association of Software and Services Companies). It has forecast 21-24 % growth rate in software and services revenue in this financial year. Soon our software exports will touch the magical figure of $50 billion. The software and services exports segment grew by 29 % to register revenues of $40.4 billion this year from $31.4 billion in last year.
So from statistics point of view, everything is fine for this industry. It will employ 4 million people in 2008 and account for 7% of gross domestic product and 33% of India’s foreign-exchange inflows, says the Nasscom report. According to Forbes magazine “Jobs that are low value-added and easily automatable should and will disappear over the next decade in Indian Software Industry.” When we compare our industry with world business then we can easily see that we are still the world’s back office. India’s tech industry is a “services” (poor) industry. The Indians don’t do the thinking. The foreign customers or clients do, we Indians just execute.
The Indian software companies never take risk in launching new products. They are happy to just work for their clients for some dollars. But if the US market will continue to behave in the same way i.e appreciation of the rupee against the weakening dollar. India’s cost advantage will soon disappear. India has not learned to invent technology products of its own so this industry will be in real trouble if there is any scarcity of foreign offers. The top Indian companies have no plans to face this challenge. They are just happy thousands of new employees every year. The golden goose of Indian software industry is still laying large, warm eggs, enough to feed the 4 million Indians and their families, servants, chauffeurs and cooks. What will happen after the death of this golden goose? Let’s wait and watch.
So from statistics point of view, everything is fine for this industry. It will employ 4 million people in 2008 and account for 7% of gross domestic product and 33% of India’s foreign-exchange inflows, says the Nasscom report. According to Forbes magazine “Jobs that are low value-added and easily automatable should and will disappear over the next decade in Indian Software Industry.” When we compare our industry with world business then we can easily see that we are still the world’s back office. India’s tech industry is a “services” (poor) industry. The Indians don’t do the thinking. The foreign customers or clients do, we Indians just execute.
The Indian software companies never take risk in launching new products. They are happy to just work for their clients for some dollars. But if the US market will continue to behave in the same way i.e appreciation of the rupee against the weakening dollar. India’s cost advantage will soon disappear. India has not learned to invent technology products of its own so this industry will be in real trouble if there is any scarcity of foreign offers. The top Indian companies have no plans to face this challenge. They are just happy thousands of new employees every year. The golden goose of Indian software industry is still laying large, warm eggs, enough to feed the 4 million Indians and their families, servants, chauffeurs and cooks. What will happen after the death of this golden goose? Let’s wait and watch.
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