One-Hand-Tied Competition

Imagine a fencing duel in which one of the rapier-wielding combatants has one of his hand tied behind the back... and yet he manages to beat out skilled and resourceful opponents time and again.

This pretty much sums up the conditions under which India's successful and increasingly assertive IT firms compete in the global marketplace.

Take the case of Infosys, one of the big-five IT firms out of India, and probably the Indian IT company with the highest international profile.

At its main corporate head office campus in Bangalore, Infosys runs a bus service with a fleet of 150 buses, to ferry employees back and forth through the byzantine traffic snarls of Bangalore's exploding IT agglomeration. Not only is Infosys a bus operator, it is also a water supply company employing the costly Reverse Osmosis process to provide thousands of gallons of clean and healthy water to its employees. Infosys even harvests the rainwater on its verdant, flower-laden campus through beds of rocks to recharge the deep-underground aquifers that would provide water to the posterity. Infosys is also its own electric supply company, generating enough power to light up a small town.

A senior Infosys official estimates that about 30 percent of the time and energy of the top management is spent in solving such mundane infrastructure problems. This stands in stark contrast to not just the advanced nations, where giant IT service firms such as IBM, Accenture,and EDS that compete with Infosys are based, but also stands in stark contrast to China.

An Indian textile CEO was on a visit to China recently, touring their efficient textile factories. During such a factory visit, he asked his host Chinese CEO: "Do you face power cuts at certain times?" The Chinese CEO looked puzzled -- he did not quite understand the question because "power cuts" were beyond the pale of his experience.

In city after Indian city, there is an IT boom... but this boom is happening in an environment where the roads are congested, full of potholes, and snarled with unruly traffic; where water in scarce and unfit for human consumption; where electricity is erratic and blackouts and brown-outs are commonplace.

Governments at various levels in India -- federal, state, and local -- are either clueless about these problems, or are aware but trapped in plenty of red tape and corruption to do anything about these problems. In few rare cases, governments in India are willing and honest in terms of dealing with these issues but lack resources and skills.

The politicians also are on a tightrope whereby too much of a tilt toward the urban centers -- where the IT industry of India is located -- could cause unrest and outcry in the poor rural areas. Such violent swings could send the politicians tumbling off their tightropes. That's what happened in the early 2004 elections -- the top elected officials of the top IT states of India were sent home packing by dissatisfied rural voters.

Fortunately for India's competitors, this "one-hand-tied" model of competition is not likely to change any time soon. True there are major infrastructure projects underway, but these would take years to complete. And even these completed projects would hardly make a dent in an IT-laced economy that is growing at a phenomenal rate. The art and craft of making do without good infrastructure has a long, dismal future in India.

Nik Dholakia