Bill Gates recently visited India and made the comment
that India needs to move away from low-cost labor toward high-end research and
development work. I believe Bill is partially correct. The Indian IT sector has
been built upon a value proposition of high scale, low cost labor which has
allowed large companies to drastically reduce IT development and management
costs. Surely Bill does not believe India should move away from the dominant
position she holds on this market.
Where Bill is absolutely right is the future for the
India IT sector lies in expanding its capability to handle high-end R&D
work. The type of work that drives innovation and products. In this segment
India lags the US and China.
Such a major shift will require some significant
changes in India. Lets start with the educational system. The entire IT
educational system in India today is geared towards producing large quantities
of engineers that can serve in the IT outsourcing business. Hence, the
educational institutes focus on the basic skills required - communication and
specific technology skills. When these graduates enter their first jobs they
are taken through meticulously designed induction programs that continue to
build on this foundation.
Research and development requires a totally different
approach. Scientists carry out R&D. This requires a thorough understanding
of the underlying science of information technology. Great scientists are
lateral thinkers, creative yet practical. They possess deep knowledge and
challenge conventional thinking. The Indian educational system today is not
geared towards producing large quantities of scientists.
The US produces the largest numbers of PhD’s in the
world allowing it to be the center of technology R&D. When you examine the
US university system one rapidly realizes this is made possible through
tremendous cooperation and funding from the federal government and large
private companies. As an example, when I studied at MIT as an undergraduate I
had the opportunity to work in the Laboratory for Artificial Intelligence - a
multi-million dollar facility funded by IBM. I had access to the latest
computers and technology. Why did IBM provide this level of funding? They got
access to some of the research (though all research is public) but also because
companies in the US know this type of fundamental research produces the
scientists they want to hire down the line.
If India is to make a significant shift in producing
scientists who can drive a new wave of R&D expansion, the large IT
companies in India need to sponsor fundamental research at the university
level. The government needs to create incentives by providing tax breaks for
this type of research funding and for the creation of R&D centers.
Finally, since Mr. Gates brought up this idea maybe
Microsoft can start with leading the way.