Ever since reading "The Rise and Fall of Great Powers" by Paul Kennedy ten years ago I've wondered whether I would ever see signs of America's economic decline.
I have the feeling in my bones that a future historian will highlight the 2000-2010 decade as the beginning of the end, and the rise (or, rather, the re-emergence) of China as the largest economic force. If I were an American I would be more than a little frightened by the following article in today's New York Times. (There's just one trivial mistake in the article. The Indian Institute of Information Technology is actually the National Institute of Information Technology and this is a private chain of schools. Those with a NIIT diploma are recruited by computer firms in preference to BSc graduates from the State universities.) <<<< January 5, 2002 CHINESE RACE TO SUPPLANT INDIA IN SOFTWARE By Saritha Rai In the battle between India and China over the software business, India holds the edge. But if the recent invasion of Chinese trade and information technology delegations to Bangalore, India's software capital, is any indication, China is hoping to change that. A few weeks ago, a delegation of officials from the Chinese Ministry of Higher Education was here at Infosys Technologies, India's best-known technology company, on something of a reconnaissance mission. The Chinese, it appeared, could not stop asking questions. How are employees trained in the latest technologies? How do programmers anticipate the needs of the market? How does the company keep its attrition rate under 10 percent? What kind of cuisine at the cafeterias? How many employees use the gym on an average day? "We are here to learn," said Wang Ya Jie, the deputy director general of the Office of the Academic Degrees Committee, who led the delegation. The visitor routine at Infosys is well rehearsed, and dozens of foreign business groups come each week. Delegations get a presentation about Infosys or a question session with an executive. To round off, there is a golf buggy tour of the campus that leaves most visitors in awe; Infosys says it has the second-largest technology campus, after Microsoft's. Until early last year, Chinese visitors were rare, but in the last month alone, five Chinese delegations have stopped by. The Chinese groups from universities and software parks are focused on one goal: they would like to supplant India as the world's second-largest producer of software, after the United States. "The Chinese are very clever, just as the Indians are," said a member of one delegation, Kang Jianchu, an assistant professor at the Beijing University of Aeronautics and Astronautics. "So what else is the difference? We are here to find out." The Chinese realize that part of India's advantage comes from its schools and universities. So, besides the stop at Infosys, this Chinese group's two-day itinerary was packed with trips to the city's premier technology schools, the Indian Institute of Science and the Indian Institute of Information Technology. After all, the Chinese have engineering and technology schools that they consider just as good as, if not better than, those in India. More than 200 universities have computer science departments, according to the four professors in the Chinese delegation, and 33 universities in China now have specialized schools teaching software development. "The most important difference," said Shen Weiping, vice president of Jiaotong University in Shanghai, "is that professors in India teach computers in English and professors in China teach computers in Chinese." Until now, English has been taught as a subject in China, but other subjects have not been taught in English, limiting practical use of the classroom learning. English skills are critical for the Chinese if they intend to build the customer relationships needed to increase exports to English-speaking countries. In the fiscal year that ended on March 31, 2001, India exported software to more than 100 countries, but a significant 60 percent of its software exports went to the United States alone. China outstrips India in almost every sphere of development except software. It attracts a bigger chunk of foreign investment, and its share of world exports, whether textiles or toys, is far bigger. In information technology, however, India takes pride in outdoing its rival. In 2000-01, India's software exports totaled $6.2 billion. Nasscom, India's software industry trade body, projects that India will reach $8.5 billion in exports by the end of this year. China's software exports were only $130 million in 1999 and have yet to reach $1 billion. A sense of urgency came through in the Chinese visit. The visitors repeatedly asked officials of the Indian companies, "What kind of model did India follow to reach this level in information technology?" Although they say they gain information from the Chinese as well as give it, officials of the Indian companies, understandably, are not entirely open with their answers. Arjun Belliappa, a government official who facilitates visits by foreign delegations, said, "The Chinese are very eager to know the business model, and Indian companies are expectedly very reserved." For example, this particular delegation, despite several requests, was not permitted to visit Bangalore's other well-known software company, Wipro Technologies. With the Chinese going about learning in their quiet way, Indian technology companies are already looking over their shoulders. They fear that if the language gap is bridged, the Chinese will begin bidding for the same slice of the pie as the Indian companies, snatching away projects and foreign currency earnings. The world's two most populous countries, with more than a billion people each, will fight this war with programmers, which they both churn out in the thousands. Indian labor is cheap, but Chinese labor is cheaper. Programming produced by Chinese costs about 20 percent less than that produced by equally qualified Indians, and some see this as eventually giving China a big advantage. At the same time, companies like Infosys and Wipro are looking for ways to use Chinese talent for their own software development efforts. Kiran Karnik, president of Nasscom, said China would take several years to catch up with India. "However, we can't afford to be complacent," he said. China, meanwhile, is being aggressive. One of its largest software companies, Huawei Technologies, has a center in Bangalore that employs 536 people and is Huawei's biggest unit outside China. At the unit, 180 Chinese work alongside Indian programmers, soaking in the work culture and ethics. "They are learning how Indian programmers work together, how well they coordinate," said Ms. Kang, the assistant professor from Beijing. Crisscrossing the 50-acre Infosys campus in a golf cart, the delegation was asked how long it would take China to overtake India as software powerhouse. "In the next 5 to 10 years, we hope to do that," Mr. Weiping said with quiet calculation. >>>> Keith Hudson __________________________________________________________ �Writers used to write because they had something to say; now they write in order to discover if they have something to say.� John D. Barrow _________________________________________________ Keith Hudson, Bath, England; e-mail: [EMAIL PROTECTED] _________________________________________________
