Friday, December 16, 2005


From Macaulay to McKinsey

(Nasscom McKinsey report 2005)

The foundation for the present Indian educational system is widely acknowledged to have been laid by Thomas B. Macaulay in 1835. In particular, his "Minute on Indian Education" gives the rationale for an educational system based on English. A few of the more interesting statements are quoted below:

All parties seem to be agreed on one point, that the dialects commonly spoken among the natives of this part of India, contain neither literary nor scientific information, and are, moreover, so poor and rude that, until they are enriched from some other quarter, it will not be easy to translate any valuable work into them. .

The relegation of local languages to the background and the prominence given to English in our educational system, owe their origin to the above sentiment. It is ironic that post Independence, the decision makers consciously chose to agree to the above logic and set up an educational system that creates a large number of uncreative, and till very recently, unemployable persons.

And I certainly never met with any Orientalist who ventured to maintain that the Arabic and Sanscrit poetry could be compared to that of the great European nations. But when we pass from works of imagination to works in which facts are recorded, and general principles investigated, the superiority of the Europeans becomes absolutely immeasurable. It is, I believe, no exaggeration to say, that all the historical information which has been collected from all the books written in the Sanscrit language is less valuable than what may be found in the most paltry abridgments used at preparatory schools in England.

This is a bold statement to make, even for one who represents the ruling class of a subject nation.

I feel with them, that it is impossible for us, with our limited means, to attempt to educate the body of the people. We must at present do our best to form a class who may be interpreters between us and the millions whom we govern; a class of persons, Indian in blood and colour, but English in taste, in opinions, in morals, and in intellect (emphasis added).

Here is an interesting confession from the learned man:

I have no knowledge of either Sanscrit or Arabic.--But I have done what I could to form a correct estimate of their value. I have read translations of the most celebrated Arabic and Sanscrit works. I have conversed both here and at home with men distinguished by their proficiency in the Eastern tongues. I am quite ready to take the Oriental learning at the valuation of the Orientalists themselves. I have never found one among them who could deny that a single shelf of a good European library was worth the whole native literature of India and Arabia .(emphasis added).

Heavy stuff!

170 years after McCaulay´s report, we are at the cross roads. Several people have credited McCaulay´s ´foresight´ in preparing India to become in the 21st century, the back office capital of the world, We have come a long way since then: from producing clerks for the British empire to producing clerks for anyone around the world willing to pay for the services.

As I have repeatedly maintained, I am not placing any value judgement on the worth of a clerk, or the dignity of holding the job of a clerk. The difficulty arises only when the educational system of an entire country of the size of India is tuned to generating good quality Internet clerks, or e-clerks to coin a new name.

Here is where the key recommendations of the Nasscom-McKinsey Report 2005 sound alarm bells.

According to Nasscom-McKinsey Report 2005, “The country will need 2.3 million professionals to meet the $60 billion export revenue target by then. But the present education system will be able to churn out only 7,00,000.”

“The country needs to do with higher education what it did with telecom. Deregulate the sector so that some universities are given a deemed university status, allow flexibility in curriculum, funding, and teachers salaries,” says McKinsey & Co partner Noshir Kaka.

The report predicts that the sector will create 1.6 million knowledge professionals and give indirect employment to another 6.5 million people by 2010.

To suggest changes in the educational system with the goal of improving the number of trained internet clerks is short signted, to say the least. Similar suggestion could come from, say the construction industry, given the huge growths projected for this segment: “Our schools and colleges are not taking away the trained manpower required for the construction industry.” “We need to reorient our education system so that our construction workers could build the best quality roads at the lowest cost.¨ Such suggestions of course will be dismissed with scorn. However in the current situation, I await with dread the news in the next few days that some state governments welcoming these suggestions and promising to offer the maximum flexibility in their educational system as an incentive for ITES/BPO companies to set up shop in their state. “We want to make our state the BPO capital of the world,” will be the accompanying quote from the Chief Minister or the Secretary of IT.

McKinsey & Co partner Jayant Sinha says, “The problem of skill set shortage can be combated by creating certain focussed knowledge zones, as it is more a problem of quality and not of numbers. But India will need 10-12 integrated knowledge cities in the next five years to tackle problems of infrastructure in order to match targets.”

No one can dispute the value of sound infrastructure in improving the economy of a country. However, to plan for improvement in infrastructure so as to faciliatate a market share in outsourced services is dangerous. Abdicating control to outsourced services industry as the determiner of state policy, ranging from infrastructure, education, real estate, retail market and so on, does not augur well for the country. The long term impact of becoming a services hub of the world is much more distrurbing than the above. For this we need to look at the global picture of outsourcing, which I am sure has parallels in history. I just need to dig them up!

Thursday, December 08, 2005


Microsoft investing US$ 1.7 Billion in India

Why is Microsoft planning to invest US$ 1.7 Billion in India? And why is the Minister of Communication and Information technology so pleased about it? In fact, every announcement of investment in India by multinationals, like Intel and Samsung, is greeted by assorted Indian decision makers and Industry leaders with lot of pride and joy. ¨This is a recognition of Indian technology capabilities¨, ¨the worth of Indian technology professionals has been vindicated¨, ¨India is a force to reckon with in ICT¨ are some of the effusive statements that accompany such announcements.

Let us go back a bit in time.

Look at this photograph taken in 1882:
Indian Soldiers

The caption to the photograph reads thus: Indian troops at Portsmouth in 1882 waiting to be shipped to Egypt to tackle a rebellion against British rule. The British relied heavily on Indian troops to enforce their military power.

Equivalent quotes to ones listed above will read thus: "The might and valor of Indian soldiers has been recognised", "Unmatched courage and
capability of the Indian soldier vindicated". Fortunately, we do not have evidence of such statements from dignitaries and patriots of those times. The fact is simply that the Indian soldier was the only one that the British had access to at that time who was willing to sacrifice his life fighting someone else´s war, in return for the salary, pension and death/injury benefits to the family. It is the sign of those times that the alternate professions available to the young men in the
photo must have been so poor that they have instead chosen to fight to suppress the freedoms of some unknown people. And their own.

It is an historic fact that the Indian army was the British Empire´s single greatest resource, and was deployed to fight all over the world. Lord Curzon in 1901 made the following candid admission, "As long as we rule India, we are the greatest power in the world. If we lose it we shall straightway drop to a third rate power".

In the software wars, there is no loss of life, no need to ship bodies across oceans (which was realised in the 1990´s after an initial phase
of body-shopped software mercenaries), and there are no obvious winners or losers. However, the continued dominance by MNCs in ICT, already
exceeding half a century, clearly will keep countries like India as suppliers of cheap mercenaries whose efforts, in the form of products of these MNCs, result in subjugation and exploitation of the less developed countries in the world. For example, several state governments in India have paid crores of rupees to companies like Microsoft and Oracle for their software products. What in essence the US $ 1.7 Billion investment will do is to enable Microsoft, and other MNCs which are similarly investing huge amounts in tapping the mercenary potential in India, create the next generation
of products that will help them earn billions of dollars, not just from India, but from all over the world. So a picture of Indian engineers assembled in front of the Microsoft Development center is a perfect modern day equivalent of the 1882 photograph! The question to ask is, are the alternate options avaialble to these young men (and women!) these days so poor that they happily choose this option?

Tuesday, December 06, 2005


The Telecom Platter

Telecommunication services in India have evolved since independence till the recent liberalisation in a predictable fashion:

  1. Find what technologies and services have been created elsewhere.

  2. Find an agency which will transfer the technology to India at terms defined by the transferring agency

  3. Await in anticipation for the next technology to evolve elsewhere. Repeat step above.

Post liberalisation, an element of competitive urgency has been introduced.In addition, step 2 has been refined where the Indian agency is able to negotiate from a position of strength derived from the huge market opportunities in India. However, step 1 and 3 above continues to hold true: All telecom infrastructure, standards, switches, equipment, and terminal devices (with the exceptions of the land line telephone and the C-DOT technologies) are the results of innovations elsewhere.

A survey of the current scenario, including the ongoing and projected plans of major players in the sector indicates that the competitive edge is being equated with the ability to bring in the most (recent and sometimes not recent) technology and service from elsewhere. Examples are, the EDGE technology, Blackberry, PTT, MS Office on mobile phones, MMS, downloadable games. Huge investments in fiber, broadband to home, etc., have been committed with the hope that services which have shown promise elsewhere will bring in the revenues to justify the investment in the infrastructure.

While Indian telcos are spending all their energies in deploying these technologies and in attempting to make these generate return on the investments, the global technology leaders are innovating the next generation of technologies and services for their environment and these will be the future objects of clamour from Indian companies.

All the Indian telcos are competing with each other, investing enormous capital in building the network infrastructure, and spending large amounts in marketing and distribution. Continuation of this activity over the next decade will create a massive customer base of several hundred million. In effect, the second largest customer base in the world is being created and handed on a platter to worldwide technology companies like Nokia, Samsung, Nortel and LG. Not a single technology relating to mobile telephony is owned by any Indian entity.

Today there is an opportunity to break out of this perpetual self-locking cycle; by investing in deploying the next generation of services to the potentially vast Indian market, establishing leadership, and in the process create new technologies and devices that will help cement the leadership. The key here is to focus on sustainable, revenue-generating services that are suitable for the Indian market first and working down to the technologies that are needed to offer these services. This is in direct contrast to the current model of fixing on technologies based on availability and figuring out what services can be offered to generate revenue from the technologies that have been licensed.

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