Saturday, May 05, 2007

Indian IT industry-time to reflect?

At the completion of another good year for the Indian IT industry-there is a general feel good factor of the growing “Indian” influence in the IT & ITES space.

In a thought provoking editorial by Mr T N Ninan of Business Standard asks us to take a breath and actually question taking stock- with Israel!!

He refers to the three I’s of the tech world ( India, Israel and Ireland), and points out that

1. more than 70 Israeli companies are listed on Nasdaq—next only to the US and Canada in the country rankings

2. Israel has no fewer than 3,000 high-tech companies, supported by a flourishing venture capital industry that buys into garage-scale enterprises. Last year alone saw foreign investors coughing up $10 billion to buy into just 30 Israeli tech firms.

3. more than a third of Israel’s total exports in some years have come from the high-tech area, and 20 per cent of the revenue earned by the electronics industry is ploughed back into R&D—some of which is a spin-off from the country’s massive investment in defence research.

In contrast India’s strengths, Mr Ninan says, lies in providing manpower intensive services keeping in line with our resource endowment.

My own personal take is that while India is making slowly into the product development space, and perhaps gets overshadowed by the magnitude of the billions invested in Israel, the whole perspective would change once the Indian industry looked at the domestic market instead of its present emphasized US market!

We can already see that India being the fastest growing telecom market in the encouraging a host of technology players in the telecom, apart from converging industries-entertainment, internet and media space-and leverage on the burgeoning markets.To put it another perspective-Bangalore alone has almost twice the population of Israel today !!!

1 comment:

Anonymous said...

The problem with the sales to the Indian market is cashflow. Unless you can demand cash on delivery (retail sales), it is very very difficult to get paid for your bills on time.

True when dealing with huge Indian companies and small ones.