India Vs. China: The Former Set to Rule
As a journalist reporting on the outsourcing industry, the India versus China debate is something that comes up every day. The general business press also routinely makes the inevitable comparisons between the two countries. Now a days this debate seems to be in favor of India.
One of the Top Predictions for 2008 by IDC that reflects the order of impact on the services ecosystem within the Asia/Pacific excluding Japan region finds that “The Tigers of India Will Take on Asia/Pacific.”
You can read IDC’s predictions here.
In fact, the publishers of the recently released book “Riding the Indian Tiger” sent me a copy for review. Written from an investment perspective, the book was a respite from the raging India vs. China outsourcing destination debate. What better way to spend a Delhi, India winter weekend than to curl up, read and review the book!!!
Here’s my take on it:
Through the book riding the Indian Tiger, the authors William Nobrega, an emerging markets specialist, and Ashish Sinha, a business researcher, intend to make potential investors understand the intricacies of investing in India while they also provide a ringside comparison with China as a competing avenue for investment. Decidedly, as the name goes, it’s about why India, why not China. The authors call India as the tiger that overtook the world’s lion, the U.S.A., in 2005 to 2006 to become the second-most attractive global foreign direct investment destination.
While the book reveals some interesting facts about the Indian market such as the hot investment sectors like the retail market that is expected to grow from $300 billion today to $637 billion by 2015, the book is not for those who are looking at sector-specific opportunities. The book at best provides guidelines to ‘spot’ an effective investment area, but cannot be used as a reliable roadmap about investing in a specific sector.
At a time when the investors from various geographies are getting attracted towards the Indian market, they also need a sound strategy to get there in time because this tiger runs faster than jungle’s tiger. The authors advise that during the phase of reading and analyzing market and business trends, investors need to play the role of secret agents who suspect everything; from the market-research firm to the data provided by these firms. The authors of this book write, “The problem with most of market research analysis is that it relies too heavily on the use of third-party data and other public reports. In the emerging markets all data should be considered suspect….”
The importance of understanding cultural cues is paramount. Citing McDonald’s’ experience of riding the Indian tiger successfully, right from the market-research phase — that took 5 years — to the phase of outsourcing its supply-chain operations, the authors make a very good case about the role of cultural sensitivities in making investments pay off. McDonald’s’ market research revealed that even the non-vegetarian Indians generally don’t eat beef or pork, and vegetarians were a majority in large parts of the country. McDonald’s therefore introduced the potato-based AlooTikki Burger and it is now a hit in many other countries as well. McDonald’s started riding the Indian tiger in 1995, and since then it has been riding it successfully.
The authors’ verdict: The battle between the tiger (India) and the dragon (China) started years back, and the former is set to win because of the power of three Ds — democracy, demography and determination. While the first D, democracy, on its own ensures economic prosperity and social justice, Nobrega and Sinha refrain from glorifying it because India’s image is tarnished by government incompetence and widespread corruption that has only helped to increase poverty. In fact, the authors have dwelt well on the power of democracy in India in comparison to China by explaining the fundamentals of property rights, judicial independence and freedom of press. In India, the power of second D relies on the country’s youth that is expected to reach 550 million in 2015. They write: “China is aging as India is getting younger.” Explaining the third D, determination, the authors seem to agree that each nation is as determined as the other.
Overall a good primer, if you are thinking of investing in India! Riding the Indian tiger is not easy; the book is an effort to make it easy for those who are going to ride it for the first time.
Hi Readers,
Its great to see the sudden and drastic improvement in Outsourcing in this part of the world. Even though India and china have emerged as Favourite destinations for the West. Its the former who still stands tall.
When u compare the Crouching Dragon as against the Hidden Tiger, no prize to guess who the winner is.
Though china is developing its outsourcing wing and in fact even after efforts of conducting various programs to develop English among the youth, China still faces a strong challenge internally.
There is always an advantage to smaller countries like Philippines, Singapore, Indonesia. However, their Manpower resource is quite small to support the huge demand that Countries like US or UK would need.
But the end of all, its India who’s still emerging victorious with a huge lead.
It may take a decade or two for china to become what India is today in the ITeS sector, but by then India would have crossed Miles in the race.
Do write to me at allanpjones@gmail.com
Regards
Hi Readers,
Its great to see the sudden and drastic improvement in Outsourcing in this part of the world. Even though India and china have emerged as Favourite destinations for the West. Its the former who still stands tall.
When u compare the Crouching Dragon as against the Hidden Tiger, no prize to guess who the winner is.
Though china is developing its outsourcing wing and in fact even after efforts of conducting various programs to develop English among the youth, China still faces a strong challenge internally.
There is always an advantage to smaller countries like Philippines, Singapore, Indonesia. However, their Manpower resource is quite small to support the huge demand that Countries like US or UK would need.
But the end of all, its India who’s still emerging victorious with a huge lead.
It may take a decade or two for china to become what India is today in the ITeS sector, but by then India would have crossed Miles in the race.
Do write to me at allanpjones@gmail.com
Regards
hi.. i wish know about the “Emerging Dragon vs Hidden Tiger” Economic comparison
hi, i am henry.
I wish to invite you as a professional in this industry to give me some ideas to develop and manage a software park targeting at services outsourcing.
would you be interested to offer this service? the park is in china
young India can take on the world?…sure…but lots need to be done…improve roads, ports, attract high-tech manufacturing (like chip making), invest in education et al…