Tuesday, February 13, 2007

Topic "Chinese Threat..." - Complete Analysis

Hi guys,

The discussion was brief and the participation low. Inspite of this, I think the topic was well covered. I would have liked to see some more details on ‘what needs to be done’, while the group concentrated on ‘what the situation is’. A surprise was that the group did not perceive China as a big threat. Though it is true in the short term, we still need to be prepared for the long term surge. India is already losing the cost advantage that it had 10 years back due to increased labor cost. So unless we brace up and shed complacency, we may go down.

Some of my points
1. The IT major should open shops in China. If you can’t beat them, join them. Many of them have already done so. They will be able to understand their strengths better and will be able to complement with their strengths in India. Also they will be able to use their expertise added with the low cost labor of China. In the beginning this can be used to address Asian market and later on to expand elsewhere.

2. We are already getting out of the cost advantage with the rising salary costs. So if we have to do good in future, we need to worry about optimization, innovation, better usage of the knowledge repository etc rather than worry just about the cost advantage of China

3. English language may be an advantage. But the future growth of the Indian IT industry will be fueled by European and Asian markets. We have the same language disadvantage as compared to China when it comes to Europe and Rest of Asia. Shouldn't we do something right now to pre-empt rather than wait for the bull to arrive?

4. China itself will be a large IT market in the future and the Indian companies should be positioning themselves to cater to this rather than losing out

5. Only a small part of India’s domestic IT market is addressed by India. Can Chinese companies hit us here like they have hit our toy manufacturing?

6. China can also acquire some of the Indian companies to understand and develop expertise. Though we should not be trying to prevent this, we should still be ready for the competition

7. China has been investing billions of dollars on its universities. It is time India spent more on its education. We pride ourselves of a huge pool of knowledge workers and it is appalling to see how less we spend on primary and higher education

For good points made by the group and comments on them, Click Here

Read some of the articles below that give good points on the topic

How China can win over Indian IT
Good balanced Analysis on the subject
Can China Beat India - An article in the Hindu
TCS has new joint venture in China

Additional reading – The Chinese plan for IT in their five year plans
Plans for IT in Chinese five year plan


Post a Comment

<< Home