Software industry faces threat from China, Russia

Narayanan Madhavan

MUMBAI: India's software industry, whose exports are growing by more than 50

per cent a year, needs to improve the education of technical workers to prepare

for growing competition from China and Russia, industry executives said on

Wednesday.

Chairman of the National Association of Software and Service Companies (Nasscom),

Phiroz Vandrevala, said that India's cost-effective engineers could face

challenges from China and Russia if skilled workers in these countries improve

English-language skills, a key advantage that India currently enjoys.

"It is important that we keep our momentum and continue to enjoy the

support we have," he said at the annual Nasscom 2001 conference. India,

Israel and Ireland have been among the leading players outside Western Europe

and the United States in building on the advantages of skilled workers. But

there is growing competition from other nations such as the Philippines, Russia

and China.

India's software exports are expected to reach $9.5 billion in 2001-02

(April-March) from an estimated $6.4 billion in the current financial year.

Nasscom has set a target of $50 billion exports by 2008.

The country's annual demand for information technology workers, meanwhile, is

expected to zoom to 340,000 by 2007 from 90,000 this year, according to Nasscom.

Social concerns weigh heavily on India as it positions itself for

Internet-driven growth founded on the basis of strong higher education over

decades.

Digital divide



Arun Netravalli, the Indian-born president of Bell Laboratories, the
research arm of telecom equipment maker Lucent Technologies, said in his keynote

address at the conference that there were about 1,000 chief executives of Indian

origin in the United States. He said that Indians were writing 30 per cent of

all Internet software in the world.

Industry experts say this contrasts with the fact that more than 35 per cent

of India's one-billion-strong population still cannot read and write, and

Internet connections are estimated at just over two million. Engineering

education is largely under government control, and a handful of private

education institutions are fast turning out workers, which makes quality a key

concern.

"I think it is time we realized that education cannot be someone else's

baby," Vandrevala said, calling for industry initiatives. Indian firms were

once accused of body-shopping engineers or running sweatshops, but have

increasingly switched to organized management methods to streamline, woo and

retain their valuable workers.

Vandrevala said Nasscom planned to set up an ethics committee to help

standardize practices on working conditions and ethics as small firms grow in

size and number. There is concern among political leaders over the digital

divide because the rise of high-technology jobs will coincide with the decline

or loss of old jobs. Information Technology Minister Pramod Mahajan said older

workers needed to be retrained to adapt to new technologies.

(C) Reuters Limited 2001.