In The Spotlight

In Search of new markets  

Financial Express Article, 08/11/2010, Ganesh Natarajan

President Obama’s visit to our country has significance not just in terms of its length and timing, but in the significant reversal of fortunes that is happening between the West and the East in recent years. As both Tom Friedman and Fareed Zakaria have pointed out in recent articles, the collective hubris in the Indian economy and the relative glumness about economic revival that the recent US elections showed signify an inflection point. We in India have a tremendous stake in the continuing success of the US both as a leader of free market economies and as a paragon of excellence in ideas, education and economic boldness that it has demonstrated for so many decades. But we should also look to expand our own horizons in search of new markets and new collaborations. 

The first Nasscom delegation to Latin America demonstrated in no uncertain terms the keenness to partner and learn from India that many countries are displaying today. The South-South summit in Rio de Janeiro brought together government officials and consultants from Brazil, South Africa and representatives of most of the key Indian outsourcing firms provided enough food for thought on the ways in which a collaborative effort could enable better access to the huge markets of Africa and Latin America. Similarly, the red carpet welcome we received in Chile and the keenness of the local industry to partner with Indian IT firms to establish bases for the North and South American markets from that country presents a real opportunity to establish a new base for the industry. 

Indian firms should embrace this partnership because with the threat of protectionism looming large all over the world and the very real opportunity of inclusiveness that a global delivery model provides, it may be wise for all significant Indian firms to consider near shore outsourcing centres in Latin America, Central or Eastern Europe, Middle East and China, connected by technology so that work can be distributed and delivered across multiple locations in a seamless and cost effective manner—surely the model of the future! By encouraging our clients to consider Johannesburg as the base for Africa, Jordan for the Middle East and Rio or Santiago as the base for Spanish speaking America, a more inclusive model can emerge for our industry in this decade. 

The three pillars that have been suggested for a possible collaboration between cities in Latin America, South Africa and India are knowledge sharing, resource sharing and market sharing and it may be wise to add a fourth pillar to hold up the alliance—sharing of skill building intellectual property and programmes that has worked in India and can be used in the other cities. Collaboration will be enabled between the cities by each city developing a focus on the kind of vertical and horizontal capabilities the city should be known for. Each city could also demonstrate IT intensity by large scale deployment of IT in the processes of the city itself. Smart schools, connected institutions of higher education, IT penetration into government, healthcare and local manufacturing are all methods of gainfully employing local talent and showcasing both talent and capabilities to potential investors. It doesn’t hurt too that the quality of life in these cities will improve substantially through these investments. 

Successful outsourcing cities create tens of thousands of jobs by creating opportunities and preparing a skilled workforce to. Pune is a case in point where an estimated 2,00,000 direct and 5,00,000 new jobs have been created by the IT and BPO sector and new corridors of growth have emerged in the city. The outsourced skills development model being increasingly adopted by Indian giants where private skill building initiatives are launched as centres of excellence within technology parks supported by government or existing Universities is one way of getting this started. Some other cities like St Petersburg, Dalian, Shanghai, Kuala Lumpur, Manila, Amman and Santiago have already started work on similar models. 

Interestingly the opportunities for building centres for outsourcing excellence may also emerge soon in the United States, a fact that policy planners on both sides would do well to understand and discuss. In a discussion with a consortium of community colleges on the East Coast of the US last week, we were intrigued to find the keen interest in building certificate programs for graduates and incorporate project based training in the two year and four year curriculum of the colleges and the State Universities that would enable a new generation of Americans to be equipped with the skills needed to take up IT and BPO jobs for firms in their own country. The technology sector employment is already one of the highest in the country and the availability of a few thousand more skilled youngsters will be a boon for both the Indian and American firms who are committed to creating opportunities for local talent. 

It was amusing to hear our Chilean hosts referring to their country as an island surrounded by the ocean and the Andes! Many of our countries have been operating as islands in their own thinking and actions and the time has come for a new archipelago formation to emerge which can be mutually beneficial for all of us.