COMMENT: Once a Leader, Always a Leader

As the comfort level about offshoring percolates beyond the large TNCs in
developed markets, outsourcing service providers servicing them are fast
globalizing their service delivery capabilities, driven primarily by-but not
only by-cost.

As you will read in the story on the global service delivery strategies of
the big service providers, in this issue, most of these companies-many of them
Fortune 500-have centers in areas from Slovak Republic to Jamaica; Malaysia to
Mexico. Yet, only a few offshoring destinations have hogged the limelight. Like,
India for example.

Shyamanuja Das

The reason is not only the comparatively larger market share of India but
also its potential to absorb far more business. Not many countries in the list
can grow beyond a few thousand people.

That is, except one. China.

Call it the hidden dragon. Or call it the biggest threat to India's
supremacy. It is one country that has silenced even its sternest critics,
growing at a rate that no adjectives can portray.

It is no surprise the Indians are not taking their distinct lead in services
for granted. In the recently concluded India Economic Summit organized by World
Economic Forum (WEF) and major Indian industry association Confederation of
Indian Industries (CII), the Chinese threat dominated the discussions in almost
all major sessions. So much so that, there was loud applause when the audience
was told that this year's WEF summit in India was bigger than that in Beijing!

Worrying about a potential threat in business is wise. Getting obsessed about
it is not. One fears the C factor has become an obsession.

India and China have their unique strengths. As many writers have pointed out
in the past, China has been an innovator of things-whether paper and tea in
the past or the Chinese goods at present. India has been an explorer of ideas-whether
the concept of zero, astronomy, mathematics in ancient times, or information
technology at present times. A good combination of both is what is needed to
succeed in today's environs.

The big idea to explore now-no prizes for guessing on who the onus is-is
whether the two countries and other smaller Asian countries can together be a
cluster that will be seamless. The idea of nation state is increasingly become
irrelevant. Till such time it becomes totally so, there is still enough scope to
seamlessly operate business out of this geographic cluster.

Meanwhile, countries such as Singapore are working silently to take a more
'valued' position. The island state is working on a two-pronged strategy. It
is trying to attract investment in higher value areas like biotech, genetics,
animation, design, and other creative sectors on one hand; and emerging as the
regional headquarter on the other. Singapore's two-decade-old Headquarters
Program has been suitably enhanced to attract more services companies. Already
the best global city to do business, the result of these two combined
initiatives could establish Singapore as the hub of the region.

That is, if India fails to establish itself.

Because of its geographic location as well as the activities at present,
India can logically become a better hub of a future potential cluster comprising
not only of China, India, and other Asian countries but also South Africa,
Ghana, Mauritius, Israel, Sri Lanka, Middle East and other such locations in
Africa and Asia. All these countries have some advantage or another. For
example, South Africa's time zone makes it a good backup for India, while
serving Europe. Israel has its own intellectual capital. China will be
unbeatable in cost.

Since India has already acquired the knowledge base, and has a form of
society/government that developed nations would be most comfortable with, it
could play the role of an initiator of such a cluster, rather than comparing
itself with each of these locations and reassuring itself.

Because, forget not, this is one area where even Pakistani businesses are
vying with each other to learn from India.