India Ahead of China in IT, But…
A top ranking Chinese executive says his country is making giant strides in eCommerce and other technology areas
India’s IT and IT Services sector is way ahead of what China has achieved in the global markets with Beijing’s recent efforts offering no real threat. However, there are several other areas where China has made vast strides such as eCommerce, autonomous driving, artificial intelligence and cloud services, says Mike Liu, a former head honcho at Infosys.
In a book titled “The Rise of Indian IT”, the top Chinese executive said there is no fear of China catching up with India’s hegemony over the global markets in the IT and ITES domain because most of what China does in this area is targeted at the local companies with software revenues of Chinese companies largely coming from the home front.
The official, who was the first Chinese to head Infosys in the local markets as well as in other locations, had also spent considerable time with brands such as HP. He was of the view that more than 95% of China’s earnings from the IT services business came from the domestic market – not surprising given the massive manufacturing thrust given by Beijing.
Sharing his views in an interview with Indian wire agency PTI ahead of the book launch, Mike Liu said the book aims to provide insights into the development of IT and IT services in India and China over the decades. It has already been published in Chinese and an English edition is on the way now.
China makes money via local software sales
As per official data from China’s IT ministry, the country’s software business revenue over the first seven months of 2022 touched 5.456 trillion Yuan which translates roughly to $797 billion, representing a 10.3% jump over the same period of 2021. What’s interesting though is that the IT sector represents about 8% of the GDP for India and China.
However, revenues in China are far higher considering the size of the Chinese economy compared with that of India, says Mike, who makes a note of the fact that when it comes to the global markets, Indian IT companies have no competition. However, when it comes to tech dominance, China is moving ahead.
Mike felt that Chinese IT players have a very long learning curve in case they are interested in competing with Indian IT firms for a slice of the global market, especially in the English-speaking countries. However, he also doesn’t ascribe to the notion that Indians speaking better English is a key factor in this dominance.
India’s dominance will continue
At best that could account for about one percent of the reason, he said while pointing out that the Chinese IT specialists need to learn several things such as the mindset, management systems and governance rules. Moreover, there is an abundant supply of skilled IT resources that Indian universities churn out year after year, he added.
The author also pointed out that India’s success in IT is neither due to regulated efforts, government subsidies and policies but the result of a strong conviction of Indian tech leaders and software engineers.
However, when it comes to technology and innovation, China has taken the lead, especially in areas such as B2B, eCommerce, artificial intelligence, cloud services etc. where Indian players continue to play second fiddle and function mostly as solution providers using technology provided by the big tech companies of the United States. Companies such as Alibaba, Huawei, and Tencent have invested in technology research and development while India has confined itself to software outsourcing, he added.
