The visit of In­dia’s prime min­is­ter to Sil­i­con Val­ley

Daily Trust - - IT WORLD -

Sil­i­con Val­ley (SV), in San Jose, Cal­i­for­nia, USA, has the world’s largest con­cen­tra­tion of high tech and In­ter­net com­pa­nies, where com­pa­nies such as Hewlett-Packard (HP), In­tel, Ap­ple, Google, and Face­book have their roots. With the CEOs of Google and Mi­crosoft be­ing of In­dian ori­gin, cou­pled with the gen­eral, but ar­guably er­ro­neous, belief that In­di­ans dis­pro­por­tion­ally dom­i­nate high tech “savvi­ness,” you can un­der­stand why the prime min­is­ter of In­dia, Naren­dra Modi, paid a two-day visit to Sil­i­con Val­ley on 27 Septem­ber 2015 dur­ing his of­fi­cial visit to Cal­i­for­nia. Modi’s visit fol­lows Chi­nese pres­i­dent Xi Jin­ping’s round­table, on 23 Septem­ber 2015, in Seat­tle, USA, with U.S. and Chi­nese CEOs, in­clud­ing Tim Cook of Ap­ple, Inc. and Jeff Be­zos of Ama­zon.com.

Prime min­is­ter (PM) Modi’s over­rid­ing mis­sion at SV is to po­si­tion In­dia as an open and evolv­ing al­ter­na­tive to China for U.S. tech giants. Un­like China, In­dia has an ex­cel­lent re­la­tion­ship with SV. For ex­am­ple, Face­book and Google are both banned in China, but not in In­dia. Also, the U.S. gov­ern­ment and cor­po­rate Amer­ica ac­cuse China of steal­ing cor­po­rate trade se­crets; In­dia does not have such an im­age. You will re­mem­ber that in the past, China has en­joyed mas­sive out­sourc­ing of US jobs, es­pe­cially in the area of man­u­fac­tur­ing, which is partly re­spon­si­ble for the phe­nom­e­non whereby al­most ev­ery­thing man­u­fac­tured on earth is “Made is China.”

In­dia has not en­joyed this kind of out­sourc­ing be­cause of the poor in­fra­struc­ture in that coun­try - a fac­tor that will in­vari­ably un­der­mine the ef­forts of In­dia to sig­nif­i­cantly uti­lize its good re­la­tion­ship with U.S. high tech com­pa­nies to po­ten­tially de­velop the coun­try tech­no­log­i­cally. Thus, de­spite the im­pres­sive fig­ures of­ten quoted for In­dia’s growth rate (7% or so) - es­pe­cially in the face of China’s cur­rent shaky econ­omy, it is doubt­ful that In­dia can com­pete with, let alone sup­plant, China, be­cause of the ab­sence of an in­fra­struc­ture base in In­dia.

To be sure, quite a few out­sourc­ing of U.S. jobs to In­dia has taken place in the past 15 years. How­ever, most of these have been in the Call-Cen­ter and Cus­tomer-Sup­port func­tions, not man­u­fac­tur­ing. More­over, it seems that most Amer­i­can com­pa­nies are re­think­ing the idea of out­sourc­ing.

Be­sides ad­vo­cat­ing for U.S. tech com­pa­nies to con­sider In­dia as an al­ter­na­tive to China, In­dia’s PM says that two global chal­lenges re­main in­ter­na­tional ter­ror­ism and global warm­ing. I think the PM should have added poverty to the list of global chal­lenges; af­ter all, poverty is a dis­ease that af­flicts a very large pro­por­tion of In­dian peo­ple, and for which an ur­gent so­lu­tion is needed. Cu­ri­ously, there was no men­tion of In­ter­net. org, which is a pro­ject ini­ti­ated by Face­book to pro­vide low-ca­pa­bil­ity In­ter­net ac­cess to the world’s poor, many of which can be found in In­dia.

At SV, Modi met with Sun­dar Pichai, the In­dian-born CEO of Google, as well as with Satya Nadella, also In­di­an­born, but the CEO of Mi­crosoft. Pichai re­it­er­ated a plan to bring fast Web ac­cess to up to 400 In­dian rail­way sta­tions by the end of 2016, and dis­cussed Google’s plan to en­able An­droid phones to op­er­ate in eleven more In­dian lan­guages, in­clud­ing the prime min­is­ter’s mother tongue, Gu­jarat. At Google, Mr. Modi pro­moted his plans to ex­pand In­ter­net ac­cess by build­ing more fiber-op­tic ca­bles. He also re­port­edly toured Google’s head­quar­ters, with in­ter­ests in healthcare and smart­grid tech­nol­ogy. There were also re­ported meet­ings with Tim Cook of Ap­ple and Tesla Mo­tors CEO, Elon Musk. Modi en­gaged in an hour-long Q & A ses­sion with Mark Zucker­berg, the CEO of Face­book, at Face­book’s head­quar­ters in Menlo Park, Cal­i­for­nia, with more than 1,100 peo­ple be­lieved to be in at­ten­dance.

By many mea­sures, In­dia is a poor coun­try, and Modi’s Dig­i­tal In­dia plan is go­ing to be un­der­mined by a lot of chal­lenges. In­dia’s Gross Do­mes­tic Prod­uct (GDP) per cap­i­tal is a mea­ger $1,627 com­pared with $54,597; $7,589, and $3,298 for the U.S., China, and Nige­ria, re­spec­tively. Thus, Nige­ria’s GDP is twice that of In­dia. The Robin Hood In­dex mea­sures the dol­lar-amount that ev­ery poor per­son in a coun­try gets when the wealth of the rich­est per­son in that coun­try is dis­trib­uted among ev­ery­one liv­ing in poverty in that coun­try. For In­dia, U.S., China, and Nige­ria, the in­dex is $59, $1,736, $234, and $182, re­spec­tively. You can see that In­dia is not do­ing well at all. (It is in­ter­est­ing to note that Nige­ria ranks 10th in the world in terms of the net worth of the rich­est per­son in a coun­try - ahead of coun­tries like Tai­wan, Sin­ga­pore, Chile, United Arab Emi­rates, Is­rael, Canada, South Korea, United King­dom, Rus­sia, Ja­pan, South Africa, Egypt, China, and In­dia, to name a few. Thanks to the out­lier pro­vided by Aliko Dan­gote’s mas­sive wealth of $23 bil­lion in net­worth.) (The data in the fore­go­ing have been ob­tained from Bloomberg news.)

In 2014, 18% of In­di­ans used the In­ter­net, ac­cord­ing to data from the World Bank; whereas the num­ber is 80% for the U.S. and Europe. As re­cent as June of this year, only 1% of the vil­lages in Modi’s Dig­i­tal In­dia plan were con­nected to broad­band via fiber op­tics. Also, the band­width avail­able to In­di­ans is pa­thet­i­cally low, well be­hind China and Nige­ria. Ditto for In­ter­net pen­e­tra­tion. In terms of In­dian’s ter­tiary in­sti­tu­tions, the IIT (In­dian In­sti­tute of Tech­nol­ogy) in­sti­tu­tions have been touted as the best of the best in train­ing tech gu­rus. How­ever, ob­jec­tive rank­ing of world’s univer­si­ties has not sup­ported the ap­par­ent hype. Other high tech in­dices, such as place­ment in the top 500 fastest su­per­com­put­ers, do not fa­vor In­dia ei­ther.

Per­haps more than many de­vel­op­ing coun­tries, In­dia has a lot of work to do to move up tech­no­log­i­cally and eco­nom­i­cally, the per­ceived re­la­tion­ship with the U.S. notwith­stand­ing.

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