I have found that the greatest compliment someone can pay you is to be envious of you; that was the compliment that the Indian IT industry began to receive in the early years of this century. This column was published in Business Standard of 25 March 2003.
BITTER FRUITS OF ENVY
Vipul Jain of Polaris spent some
days behind bars in Jakarta; the experience was not pleasant. His crime? There
was a dispute between his company and an Indonesian bank about work it was
doing for the bank. In India, it would be a civil dispute to be settled in
court.
Kuala Lumpur Police rounded up
residents of a housing estate, including many Indian software programmers, and
locked them up. Their crime? The housing estate was suspected to harbour
foreigners without visas. The programmers had visas; that did not save them
from jail.
These incidents have been
reported as isolated instances of highhandedness. They may have been. But as
one who has traveled all over South-east and East Asia, I can testify to local
prejudices against Indians. Some of the prejudices were well founded. Indians
never smiled; South-east Asians smiled easily. Indians haggled like mad; so did
Thais and Indonesians, but in a bantering, good-natured way. The Chinese are
different from South-east Asians; but they do not think much of us either.
Indians smell; east Asians do not.
Whether the prejudices were well
founded or not, everyone who has travelled will testify that Indians have a
certain, not very favourable image in the countries to our east. Nothing new in
that; the west had its own stereotypes of India – starving people,
cow-worshippers, prone to violence etc. Strange gods like Ganesh, strange
festivals like Holi. Really weird people.
So I was taken aback when, last
year, a German said to me, “You Indians are really intelligent, aren’t you?”
First I thought he was making fun of me; then I remembered Germans do not do
it. He was referring to our success in software. It changed our image in the
west. The Americans were pretty disdainful of us in the times of cold war.
During the software boom, they developed a special taste for Indian programmers
and imported them by the thousands. Today, America has more Indian software
engineers than India.
But that reevaluation of
prejudices was strictly western. The South-east Asians did not think we had
suddenly become more intelligent; they thought that the crafty Indians had
stolen a march over them. Everywhere, computer classes sprang up. Government
ministers presided over congregations of young people typing away at computers.
Everyone wanted to be where we were; they just could not see what we had that
they did not. They thought Indians were being used only because they were
cheap.
Such sentiments are not confined
to South-east Asia. When I was in the States two years ago, a Congressional
Committee was going around taking hearings on visa regulations. In 2001-02,
136,000 Indian programmers got H-1B visas. American men were going and telling
this committee that this influx of cheap labour had deprived them of their
jobs. That the IT companies regarded anyone over 40 as passé, and that American
jobs were being lost to curry-eating kids. But at that time there was a raging
shortage of programmers, Congressmen cared more for the software industry than
for isolated white middle-aged programmers, and did little beyond requiring US
IT companies to certify that they had looked for indigenous programmers and
failed.
But the US – and, to some extent,
Britain – are exceptional. The US had Reagan, Britain had Thatcher. They
whipped trade unions, and introduced competition in the labour market. Not
Western Europe; there, trade unions rule the roost, jobs are reserved for
natives when available, and there are no qualms about keeping out foreigners. Last
year, when I went to get a German visa, every young Indian applicant was being
given a form letter denying him a visa, and saying that under German law, the
embassy did not have to give a reason.
The visa regime is used not only
to give preference to native over Indian programmers, but to favour one
foreigner against another. Germany introduced a green card in 2000, ostensibly
to attract Indian programmers. But in the first year, only 1600 out of 7000
green cards went to Indians; most of the rest went to East Europeans. After the
collapse of the Soviet Union, Germany acquired a hegemonic role in Europe. It
has admitted millions of Poles, Croats and others from the east; it prefers
them to Indians. Not necessarily perhaps for racial reasons; maybe East Europeans
speak German and fit into the German society more readily. But the result is
the same; few Indians managed to get in to work in Germany.
The Japanese Prime Minister made
a pilgrimage to Bangalore in 2000 to attract Indian programmers; but Japanese
companies have recruited and trained thousands of Chinese programmers, and regularly
take Chinese programmers across to Japan. Geopolitical interests count in
information technology as anywhere else. They erupt in crude highhandedness in
Asian countries. Elsewhere they work more subtly, but the effect is the same:
the Indian programmer is being discriminated against. The share in India’s
software exports of three countries that are relatively liberal towards Indian
programmers, the US, Britain and Singapore, rose from 75 per cent in 2000-01 to
82 per cent in 2001-02. Which means that the share of the remaining countries
fell from 25 per cent to 18 per cent. It fell for Japan, Germany and
Switzerland amongst others.
I have found no awareness of this
in the IT firms I have visited in the past year. They think of the US as their
principal market; what happens elsewhere is only of marginal interest to them.
I think the biggest firms – Satyam, TCS, Infosys – are aware of the need to
diversify. Satyam has set up an establishment in Shanghai, because it was a
potential market it did not want to ignore. A big firm is also aware of the
need to remain big and to grow; if that involves growing away from India, so be
it. The visa regimes and other discriminatory practices mean that if Indian
firms want to expand in the discriminating countries, they will have to employ
locals. They have to multinationalize themselves.
The larger ones can and will;
thousands of small firms cannot. When confronted with this problem, everyone in
the industry mindlessly chants “moving up the value chain”. But this is a
mirage; there is no value chain to move up.
What Indian firms need to do is
to acquire, codify and supply expertise that local firms elsewhere would take
years to do, namely domain expertise. It will not come unasked; they will have
to go and extract it out of the work they do for their clients. And the
quickest way to extract it would be to select the best potential Indian
businesses, and to mine them for the special knowledge of their industries. For
their own sake, Indian IT firms should do more work for local clients – and
develop the technology to systematize and document specialist knowledge about
their businesses.
