Indian Economy Is at a Tipping Point

Opinion: New growth in the subcontinent is going to have to come from somewhere other than outsourcing.

In the fast-moving Internet economy, new acronyms and catchphrases have a way of sneaking up on people. Sometimes before we even know what they mean, we begin using them. The hottest ones right now are "mashup" and "Web 2.0." (Even better: a "Web 2.0 mashup." See Microsoft Watch Editor Mary Jo Foleys story on Page 22.) So, in the spirit of Esther Dysons Release 2.0 and Web 2.0, heres a new one to try on for size: India 2.0. Like Web 2.0, which many in IT can intuitively figure out, India 2.0 implies a next generation, a transformation to a new system. Indeed, that is what is now going on in the subcontinent, reports eWEEK Executive Editor Stan Gibson.

/zimages/2/28571.gifClick here to read Stan Gibsons article, "India 2.0 Aims to Sustain Its Global IT Influence."

Unless you have been on ice for the past few years, you know what India 1.0 was about: phenomenal growth due to U.S. companies outsourcing call centers, application development and other services. Not only did U.S. businesses find that India can supply these services cheaper, but, in some cases, it can do them better.

Now the Indian economy is at a tipping point. Cost benefits are narrowing due to wage inflation, so new growth is going to have to come from somewhere else. As CEO of Tata Consultancy S. Ramadorai put it, "The cost advantage got our foot in the door. Then we added quality. Now we need innovation." Two areas that can be fed by India 2.0: developing and selling actual products based on those services and expanding to where the action is, that is, setting up shop in the United States, Europe and China and recruiting local talent. "Ten to 15 years ago, it was about how many lines of code and at what cost. Now, its no longer about technology but about business value," said Ramalinga Raju, chairman of Satyam Computer.

Certainly one of the best ways to create business value is through IT, but such value requires the right product or service at the right price. But how do you find it? One tool in the IT managers arsenal to meet those requirements is the RFP, or request for proposal. eWEEK Labs has done several sample RFPs in the past few years to help get technology buyers started with the right questions. Beginning this week, we are making RFPs a regular monthly feature. eWEEK Labs analysts, with input from enterprise IT pros such as our Corporate Partners, will develop sample RFPs based on hands-on testing of a specific product category. This week, Senior Writer Anne Chen kicks things off with an RFP on blade servers.

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Scot Petersen

Scot Petersen

Scot Petersen is a technology analyst at Ziff Brothers Investments, a private investment firm. Prior to joining Ziff Brothers, Scot was the editorial director, Business Applications & Architecture,...