The Hunger of India and Other Developing Countries

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    I’m at Gartner’s Symposium ITxpo this week to get insight into information technology trends, of which the research firm has identified four broad areas: the consumerization of IT, the greening of IT, new models of delivery and the changing shape of IT. I had the chance to sit through the "Great Debate: India, China or Source at Home," in which three analysts represented, respectively, the vantage points of keeping IT work in the United States, taking it to India or taking it to China.


    Along the way, the audience was asked to vote on which country will dominate as the "innovation engine."


    The debate brimmed with data — the number of IT and math graduates, the size of the labor pool, the wage levels, the motivation levels, the investment in R&D as a percentage of GDP.


    There are a considerable number of hurdles that India faces in taking over as the innovation engine of the world (a role that, presumably, the United States currently holds).


    But Partha Iyengar, speaking for that country, provided insight into why it’s so important for India (and other developing countries) to continue running at its current pace: "What you see working in India — the competitive environment today — the forces today are considerably more challenging. Countries realize they have to run faster to keep up economic growth rate. There’s an imperative for the future — not just in terms of increasing the global economy… For the bottom of the pyramid, the poorest social class to continue to move up — to gain a more equitable part of the economy — that can only happen with a sustained economy. That will endure… and transcend from IT into other industries." He says that Western enterprises are hastening the trend, but at some point there will be momentum building outside of the IT services industries.


    He cited a Rand study done back in 1998, set up to evaluate the level of competitiveness of the United States as an innovation engine. That report included best practices, which, said Iyengar, India is adopting — "whereas the United States is treating that report as what not to do."


    A telling sign of the change in attitude worldwide: India and China have contributed the largest number of PhD and masters students over the past 10 years to United States universities and colleges. Over the last five years, roughly 200,000 Indians and Chinese have returned home after spending 10 or 15 years in the United States. These people are the "seeds of innovation to propel their countries into the future," Iyengar said.


    The United States isn’t doing enough, he said, to respond to the threat of knowledge transfer to other countries. (And I don’t believe he meant that there should be restrictions placed on H-1B visas or a limit placed on the number of higher ed students allowed to study in this country. But I do believe he means that US complacency is the biggest factor that will shift innovation to India and China.)