The Indian IT Industry is said to account for more than 65% of the total American market, and what has kept it thriving is the USP of providing cost benefits. IT is to India what manufacturing is/was to China and terrorism is to Pakistan. It is one of the few industries in which India can be counted as a global leader, the others being nepotism and traffic violations.
However, when it comes to Research and Development and Innovation, there is a small systemic issue. Innovation as a concept is not new to India. Right from politicians coming up with new and ingenious ways like eating fodder to embezzle funds, to Sanjay Jha coming up with refreshing new ways to look stupid, innovation, like Sardesai’s hidden agenda, has always been there. Just that other less important areas, like Science, IT, medicine etc. have not seen the diffusion of such an enterprising and innovative culture.
The Indian IT companies were at the forefront of innovation somewhere in the 90’s, and the kind of value propositions they had to offer (read cost leadership) had the US flocking to the Indian IT industry, which led to questions being asked if the US had mistaken the Indian IT industry for Oil and Gas. Swanky campuses, huge offices, and inexpensive and innovative solutions furthered the focus on and importance of the Indian IT industry. Soon after, a slew of Indian IT firms emerged and the Industry’s rise was faster than an American cop chasing a Muslim for no reason.
The rise in the number of IT firms was a great source of economic development and traffic jams in Bangalore.
However, the lack of innovation of late is a looming threat to the IT industry as a whole. The absence of any innovation and differentiation over the years has led to a situation where the various IT companies now seem as different from one another as Tamil and Telugu are to an unsuspecting North Indian. The companies are like spokespersons across political parties. There is no differentiation, nothing to tell one from the other. Everyone thrives on sounding stupid.
Instead of focusing on relevant innovation to differentiate and expand the pie itself that would have benefited the entire industry, the IT companies started using novel techniques to stand out, like standing out. They started hiring in droves which resulted in many recruits literally standing out of projects because there weren’t any for them. Bench strength, rather than any technological or service aspect of their solution, was the differentiating parameter. Show the available free resources to clients, and win projects.
The following law regarding the concept of bench strength, which may or may not be fictitious, came into force as a result:
A grad’s utility can not be created (and you can’t destroy something that is not there). It can only be transferred from one campus to another.
It is an arranged marriage of sorts: show off your property and social standing to get your daughter married. What do you mean your daughter is not your property? At the end of it all, if one does get a project, the work turns out so mundane, unimaginative and repetitive that it makes listening to Akash Chopra’s commentary look appealing. Hence (probably) ‘labor contractors’ instead of ‘IT superpower’. The pie didn’t grow as fast as the number of people at the table.
In light of the facts that competition is increasing, both from within and from related but different categories, needs have become dynamic, and the industry itself is witnessing rapid changes with the advent of cloud and big data analytics, it is no longer an option but a necessity for the industry to start innovating and stay relevant.
A systemic change in mindset needs to be promoted so that the Indian IT industry stays relevant and is able to provide end-to-end and sustainable solutions in an ever changing environment. Just like our ex PM was with information regarding misdeeds of his cabinet colleagues, the companies, too, look well equipped: talented resources, cash, global scale and knowledge: everything is in place. But again, just as the case with our ex PM, there has been no sizable action.
Nevertheless, there has been some progress. For instance, Infosys has set up an Innovation fund to fund entrepreneurial ventures relevant to their core businesses. They’ve also partnered with Oracle to come up with innovative solutions. But like Rahul Gandhi’s speechwriters, how far such ideas will end up going remains to be seen.