The visit of India’s prime minister to Silicon Valley
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.