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Monday, May 21, 2001
Lead Article


The party is over for the software professionals who went to the USA. This is the dark cloud that is being seen by all, but what is being missed is the proverbial silver lining in the form of opportunity for the Indian IT industry, says Naveen S. Garewal. All that needs to be done is to
Beat the hangover


THE information technology boom that swept the globe for the past couple of years put several small-time computer professionals in the ‘most wanted’ list and overnight put upstarts in most enviable positions. But with the slowdown in the technology sector, there is virtual panic among a substantial number of computer professionals who never visualised the downside of the gold rush. Many such professionals, rendered jobless by layoffs, have either returned home or are waiting for a flight back.

Despite the panic, experts are divided over the direction in which the IT sector may be heading in the near future. There is, however, a lot of underlying optimism that makes all of them believe that the recession in the computer world would soon be a thing of the past, even though the current setback will make most IT companies undergo a sea change in the way they operate.

US information technology giants view things no differently than the Indian software think-tank. Hewlett-Packard CEO Carly Fiorina does not expect the bottom of the current slowdown to go beyond the second quarter of the current financial year. Her optimism, coupled with the fact that despite the recession unemployment in the Silicon Valley is under 2 per cent, should come only as good news to most.

"It is very much like a roller coaster ride in a stock market. The Internet bubble that had been growing has finally burst, but there is no doubt that the technology sector will spring back, though it is yet difficult to say how long it will take for that to happen. With virtually every aspect of human existence dependent on the microprocessors, it is unimaginable to go back to the pre-computing era," say most technology gurus.

Despite this hopefulness, it is certain that information technology will never inspire the same confidence in the professionals as it did before. Though there may still be a huge gap between the jobs in the IT sector and the qualified professionals in the area, the future belongs only to those who would be able to provide wholistic rather than piecemeal solutions. This spells some bad news for Indians, who have so far concentrated on providing solutions in limited areas rather than providing complete packages under one roof.

Though there is no concrete data available on the number of Indians that have been affected by the digital carnage, going by the figures on H-1B visa issued by the US Embassy one can make rough guesses. As against over 50,000 visas issued in December 2000, about six months after the Internet bubble burst, less than 20,000 software professionals went to the USA on work permits during the first quarter of 2001. This is less than half the number of visas issued during the same period last year. Indians accounted for about 40 per cent of the two-lakh odd software professionals that went to the USA last year.

Some Indian software companies that have not burnt their fingers in this recession are, in fact, very quite happy at the slowdown. Mr A. S. Gujral, Zonal Manager of Zee Interactive Learning Systems Limited, echoes the popular sentiments when he says, "There are bound to be some realignments, but the recession in the USA is bound to get over in about a year’s time. Besides, the slowdown there means more cost-effective measures that could translate into more work for Indian companies due to cheaper input costs."

"The US recession would have hit the Indians very badly, but for the opening up of the European market, which is expected to induct about one million people this year," says Mr K. Wahi, a CMC franchisee. "Despite all bad news from the American continent, there is hardly any impact on the computer training industry as more and more avenues are coming up within the country and in other parts of the world." The only change he finds as compared to last year is that people are now looking for in-depth computer education rather than the "capsule courses" in select areas.

Regional Manager, APTECH Limited, Deepak Khullar, too, is of a similar view. Says he: "Computer education organisations provide training for various segments in the areas of career education, computer awareness, multimedia applications, corporate training, etc., in addition to training manpower for the software export industry. The US slowdown has not affected these segments. In fact, the training business would get a boost with the requirement of re-training of individuals and personnel from software companies."

Most Indian IT policy-makers are certain that the slowdown is only going to affect those who got into IT careers following short capsule courses. "It is the general-purpose professionals who have suffered a setback while good programmers will always remain in demand. Anyone working in areas like specialised software development for the telecom, mechanical, textile industries, etc, will remain in demand," says Mr Raghbir Singh Khandpur, Director-General, Centre for Electronic Design and Technology (CEDT), which runs eight centres all over the country under the Ministry of Information Technology, Government of India.

Since the IT industry is not dependent on the location of the workers, but the quality of the solution provided, the US slowdown is being viewed as a great opportunity in the IT-enabled services like medical transcription, call centres, etc. Quoting the NASSCOM - McKinsey Report, Mr Navsher Nain, a Ludhiana-based IT professional, says this report estimates that over 40 million jobs and business worth Rs 80,000 crores would be generated in India from the USA and Europe by the year 2008.

Mr Khandpur feels, "With rapid penetration of PCs, certain areas like networking would grow despite the recession. There is bound to be a re-orientation in the nature of requirement of information technology professionals. The biggest advantage to the Indian companies would flow in the form of outsourcing work to them by multinationals based in the Americas and the requirement for companies that can undertake quality jobs would increase."

McKinsey CEO Ramesh Venkataraman sums up the trend in the IT industry’s organisational structure in his report that says, "At the project leader level, there is a shortage because of growth and attrition. At the programmer level, the current annual shortage is about 50,000. The solution lies in increasing the technical output. The domestic market will have to be stimulated and the government will have to be pushed to provide greater clarity on regulations."

Supporting the industry optimism, Mr Khullar says: "The slowdown in the USA will, in fact, benefit India in many ways. India offers skilled software manpower at much lower per-hour rate (in US dollars). Certain US companies have announced shifting to or setting up of their base in India. There are going to be a lot of opportunities within the country also for placement in user industries as well as the offshore factories of IT export units. Students who have completed courses from quality and reputed institutes should not find difficulty in getting jobs."

Dot.coms have had to bear the brunt of the recession. Though the Indian companies cannot operate in isolation, despite all odds and a shadow of the slowdown on the software sector, many Indian companies have survived the onslaught. Several Indian companies in the dot.com business have reported huge profits that have amazed most observers. Among these companies are Teauction, ChennaiBazar, Hungama, Agencyfaq, Apanloan, Bazee, Bharatplanet, Clubgreetings, clickforsteel, contest2win, Naukri, and Indiamart.

The return of jobless Indian software professionals from the USA is that dark cloud that is being seen by all, but what is being missed is the proverbial silver lining. What is termed as a setback for the US economy could translate into a boon for the Indian software industry. The need of the hour, however, is that each company assesses its strengths and weaknesses in the new emerging trends in information technology. Having done this, the companies will have to re-focus their recruitment plans according to the sectors that are unaffected and re-skill their manpower so that it can be used in newer technology areas.