B S Raghavan

Indian IT firms heading for a crisis

Updated on: Jun 16, 2011

If there is one thing that a study of the history of inventions makes clear beyond any shadow of doubt, it is the eternal restlessness of the creative human mind that drives it ever forward in quest of the next big idea as soon as it has mastered the previous one. That is what has spurred the fantastic growth of science and technology that had led to inventions encompassing an unimaginably wide range — steam engines, internal combustion engines, airplanes, wireless telegraphy, rockets, radar, TV, space science, computers, and everything else that has revolutionised life on the planet.

Every invention and innovation beginning from the industrial revolution has had a Western origin. Those who thought of a personal computer in every home, or came up with innovations such as Google, Facebook and Twitter were all young fermenting minds of industrialised countries, some of whom had not even had college education.

Take Apple, for instance. It has stamped its superior technologically innovative capabilities on a field already crowded. An article, Next-Generation Product Development, in Strategy+Business of May 30 understandably hails it for the high returns it has achieved “from its rapid-fire sequence of products that began with the iPod and its numerous variations, then the iPhone, and finally the iPad — products built using many of the best agile techniques.”

Its iPod, which took only six months of development and became a thumping success, reused technology and components that had already been perfected by partners, while it upgraded its iPad within a year by adding a number of value-laden features including a camera, faster processors, and improved battery life.

Linear exploration

The share of the countries east of the Suez in launching new products and inventions has been negligible to the point of being non-existent. They are all merely indulging in some sort of linear extrapolation or peripheral embellishment of an established scientific principle or technological process.

The same trend is continuing even in an age in which there is universal access to the fruits of the ongoing knowledge and technology revolutions. The same is true of the foremost Indian IT firms of Infosys, Wipro and Tata Consultancy Services whose record is almost entirely built on providing services which lay no claim for creativity or originality.

Taking the Infosys as an illustration, only 10 per cent of its turnover is accounted for by its products, all low-end, and even of this, more than 60 per cent share belongs to the banking software Finacle.

Creative geniuses

It is a pity that no steps are evident, from the side of the companies themselves or from NASSCOM to correct the imbalance. The advantages of low costs and wages and the pool of scientific and technological talent are fast vanishing.

The rising prospects of economic growth and expanding world demand cannot for ever buoy up the market dominance of India's IT firms. They should realise that they are heading for a crisis of confidence and sustainability unless they quickly reinvent themselves by coming up with the right answers to the question: What's the next big idea?

The new CEO of Infosys, for instance, thinks the emerging megatrends to be in the fields of digital consumers, emerging economies, sustainability, new commerce, health care, smarter organisations and pervasive computing. He could also add to his list the hitherto inadequately tapped potential of robotics, transportation management and open governance.

It is not necessary for IT firms to be doing everything in-house. They can work through creative geniuses out there such as the 17-year-old boy in Dharavi slum in Mumbai who set right the malfunctioning latest model Blackberry of the Indian Express Editor, Mr Shekhar Gupta, in seven minutes flat, as against the 15 days and many times the amount paid to the boy demanded by the authorised service centre, or the Hyderabad-based Notion Ink's Adam tablet PC, considered the equivalent of the iPad, which bids fair to become the first Indian IT product to make waves on the global market.

Published on June 24, 2011

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