Prof. Dholakia's Speech at XL... From FE

Prof. Nikhilesh Dholakia, Professor of Marketing, E-Commerce, and International Business in the College of Business Administration at the University of Rhode Island (URI) visited XL on Jan 31.

He spoke on "IT-enabled Globalization: Interplay of Economics, Politics, Culture"...

Excerpts from The Financial Express, National Edition, Feb 2, 2005:

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‘India, China could become the tail that wagged global IT dog’



JAMSHEDPUR, FEB 1: The share of India and China in the global IT industry would go up in the near future despite the fact that India’s current share is a mere $50 million in the $2,600 billion worth global IT industry, as per Nik Dholakia.

Giving his views on the business process outsourcing (BPO) scenario the world over, especially in the Indian and the US context, Prof Dholakia said the momentum was definitely tilted towards China and India.
The global IT industry is currently estimated to comprise an electronics goods market worth $300 billion, a computers and software market worth $1,000 billion and a $1,300 billion telecom market.

Speaking at XLRI campus here on IT-enabled globalisation of what he described as his “aerial view” of India, Prof Dholakia said even though the numbers were very small and India’s contribution was not even a drop in the bucket, yet in the global IT industry, India and China (the latter because of its hardware base) could become the tail that wagged the global dog.

“Right now India to them is some kind of a nebulous threat where all the IT and call-centre people are sitting and taking away jobs,” said Prof Dholakia while describing the common perception in the US. He added, “The changes we are seeing in India are catering to only the 20 million elite (which includes 5 million people associated with the information and communication technology sector) with a per capita annual income of $3,000 to $20,000 or more.”

Though it was a phenomenal change, but it was still, even in India, just like scratching the surface, he added. Prof Dholakia was confident that BPO was not going to disappear but would only grow with companies outsourcing finding newer ways of ‘slicing’ jobs and manufacturing processes.

According to the professor, although for overseas clients the cost-advantage for outsourcing jobs to India was gradually narrowing down, it would still be the ‘overtaking of skill’ factor which would bring jobs to India. Thus, availability of better skills in India, he thinks, would continue to bring outsourced jobs into the country. Other countries like China (which is currently doing a massive English-language training), Vietnam, the Philippines, Ghana, South Africa and Pakistan were all gearing up fast and eyeing at BPO, he observed. Simultaneously, the phenomenon of ‘near shoring’ — outsourcing to nearby countries where the time-zone was not a factor — was also on the rise.

The EU, with its expanding membership, was giving preference to the new aspiring member-states for bagging outsourced jobs, he said. According to Prof Dholakia, companies like Infosys and Wipro are opening up offices in the Czech Republic, Romania, etc, for bagging ‘near shoring’ BPO jobs. The issue of cultural comfort was also a matter to be reckoned with in outsourcing, he said.

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