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10 October, 2011

Game-changer in IT sector

BRP Bhaskar
Gulf Today

The significant presence of India’s software companies in the global market, particularly in the United States and Europe, has often tended to cloud the digital divide that the country faces. The digital divide poses a twin challenge to India. On the one hand, it has to catch up with the other emerging economies in web connectivity. On the other it has to cope with the wide gulf that separates sections within its own borders.

The International Telecommunications Union, in its report “Measuring the Information Society”, places India in the 116th place among 157 countries. China is in the 80th place. ITU puts the number of Internet users in India at 100 million, representing a penetration of 8.5 per cent. The corresponding figures for China are 485 million and 36.3 per cent.

The bulk of the Indian software industry’s earnings of $76 billion last year came from services provided to overseas clients. With the advanced nations badly hit by the global slowdown, the leading software companies could make only small additions to their clientele in the recent past.

However, the companies are expected to produce satisfactory results this year as they stand to gain from the fall of the rupee against the dollar. The rupee lost about nine per cent in the last three months. The companies’ hopes for the immediate future rest on inroads into new markets – China is among them – and acceptance of new technologies by clients.

Last week the Indian government took two new initiatives which, analysts believe, may turn out to be game-changers. The first of these was the unveiling of Aakash, a tablet computer to be supplied to secondary school students at a subsidised price of about $35. Currently the basic iPad tablet is priced at $499 and the Amazon Kindle Fire, which is to come into the market shortly, is expected to be priced at $199.

Aakash, developed by DataWind, a UK-based company owned by a Canadian of Indian descent, in co-operation with the Indian Institute of Technology, Jodhpur, runs on Google’s Android platform. It is preloaded with an Office Productivity suite and comes with a 2GB memory card on a slot that can support up to 32GB. It cannot download apps from Android Marketplace and the rated battery life is only three hours.

DataWind puts the basic cost of the device, assembled at Hyderabad, at $38. Its 800 components include US processors, Chinese memory and Korean touch-screens. The government has offered to buy 100,000 units initially at $50. The company plans to make available a new version with 3G access to the public at a price of about $60.

Notwithstanding Aakash’s limited capabilities, the government expects it to contribute significantly to the effort to bridge the digital divide. Its introduction is part of a wider plan to promote e-learning at 400 universities and more than 18,000 colleges across the country.

The second important initiative of the week was the release of the draft of a new information technology policy, which aims at boosting revenue from IT and IT enabled services from $88 billion to $300 billion and export earnings from $59 billion to $200 billion by 2020.

Communications Minister Kapil Sibal said the new policy, to be finalised in the light of responses received from concerned interests over the next month, would help India remain a global IT player on a long-term basis. It was expected to create a pool of 10 million additional skilled manpower in the IT and communication sectors.

With China and India split along hardware/software lines, tech-watchers have long been aware of the complementary nature of their IT sectors. However, the two countries are yet to make a serious effort to adjust their policies so as to benefit from each other’s strength.

Indian advance in IT was the result of the initiative of private software developers, especially those who foresaw the opportunity presented by fears engendered at the turn of the century by what was known as the Y2K problem.

Credit for the growth of China’s IT sector belongs entirely to former Communist Party chief Jiang Zemin, who, as Minister of Electronics in the early 1980s, identified it as ‘the strategic high ground in international competition’ and set the goal of making the country a global IT leader. Two years ago China, for the first time, published more research papers in IT than the US. -- Gulf Today, Sharjah, October 10, 2011.

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