You are here: Home » Opinion » Columns
Business Standard

"Is China more IT-ready than India?"


Business Standard  |  New Delhi 

Though China has beaten India in the for the first time, the fact that IT figures in the election manifestos of Indian political parties augurs well for the future.

Vivek KulkarniVivek Kulkarni
Managing Director, Brickwork Ratings and Brickwork India

‘IT is more than just network-readiness which is what the Cisco-sponsored report focusses on — this makes it biased’

While the Global Information Technology Report, prepared by the World Economic Forum and INSEAD, an European business school, ranks India as 54th and China as 46th, India is ahead in the Information Technology race.

The GIT report looks at Network Readiness of countries. But this report has been sponsored by Cisco, a company interested in promoting internet networking, thus giving it an inherent bias. The report looks merely at network readiness which is not enough to pass a judgement on the overall IT readiness of a country. The report does not take other factors into account. India has liberalised its telecom sector very rapidly. Monthly sales of mobile phones in India are now one of the highest in the world. Indian telecom firms such as BSNL, Airtel, Tata Indicom, Vodafone etc have made the internet available in every nook and corner of the country. Many states have been implementing Wide Area Networks (WAN). The Centre has taken IT to villages in the form of common service centres.

Several other factors need to be considered for assessing the IT-readiness of a country:

  • The Indian economy is citizen-centric, while the Chinese economy is centralised with limited rights for citizens. China is well-equipped to adopt IT in the manufacturing sector, which deals with production planning, inventory control, order entry, logistics and supply chain management. On the other hand, India has the capability to excel in IT-adoption in those sectors that directly affect the common man. This includes maintenance of records — property taxes, income taxes, voters ID, school and college admission seats, bank pass books, credit cards, car loans, housing loans etc. Many Indian states have computerised their land records — China has no transparency in land records.
  • Successful IT-adoption requires the availability of quality content. China does not allow free flow of content at all. In spite of broadband availability, software applications won’t flourish unless the internet offers content for customers.
  • Several state governments in the south and west actively encourage the IT sector. A large number of government officers have adopted e-governance projects. So much so, that IT is being mentioned in the election manifestos. This will drive India’s IT growth.
  • Typically the financial sector drives IT growth all over the world. Unlike what’s happening elsewhere, Indian financial institutions are in a position to take up a large number of IT projects and are expected to drive IT growth in the domestic market. A large number of banks have adopted core banking solutions. Insurance companies and mutual funds too have advanced levels IT.
  • The global financial crisis has been a boon for India as far as IT-adoption is concerned. Earlier in times of heady growth, the best Indian IT companies focused only on exports. They will now look at the domestic market as well.

While China may be ready with more broadband connectivity, India is not far behind. India’s telecom liberalisation has been most effective. India has a better institutional structure, responsive governments, higher transparency, well-capitalised banks and above all, rich content in science, technology and entertainment. Ten years from now, India would be far more advanced in IT than China.

(The author is a former IT secretary, Government of Karnataka)

Sabyasachi Satpathy
Director, Mindplex Consulting

‘While ICT has helped China leapfrog to higher levels of development, India has slowed the rollout of its ICT network’

Even in the middle of the present gloomy economic scenario, China has achieved significant success in emerging as a leader in technology, manufacturing and other services. Not surprisingly, the recent GIT report ranks China at the 46th position this year, moving ahead of India and the rest of the BRIC economies for the first time.

Rapid advances in Information and Communication Technologies (ICT) and pro-active policy reforms have helped China to leapfrog to higher stages of development and facilitate the structural transformation of its economy and society. On the other hand, India, which has the potential of becoming the global leader in the knowledge economy, has slipped down in the GIT ranking due to to little/slow development in building general and ICT-infrastructure and lack of policy reforms that could have driven higher ICT adoption.

China has several advantages and will continue to make strong advances in its adoption and readiness to adapt to ICT at all levels (government, industry and people).

  • Unlike Japan and Europe, China’s financial sector is not completely integrated into the global market and has thus been relatively less impacted by the current global financial crisis. Also, there is a large domestic market in China to sustain demand and there is an increasing thrust on urbanisation to drive the economy.
  • The Chinese government-guided investment is expected to exceed RMB 4 trillion over the current fiscal. This will help promote visible economic growth and an obvious impetus in IT-adoption. The Chinese government is well-funded and experienced in its efforts in crafting and implementing broad-based growth strategies.
  • A host of e-governance initiatives are also in progress; benefiting the public and business, as well as expanding the ICT market opportunity.
  • With telecom restructuring and as the 3G licenses are issued, the three major Chinese telecom operators will have a wide-scale network construction and will also invest in the construction of core networks, transmission networks, broadband access networks and other networks/systems. The investment momentum of the telecom operators is creating huge market opportunities and is paving the way for greater common access of communication and technology. This will make mobile internet and e-commerce fully-operational in the country.
  • The domestic IT market is fostering growing investment across all sectors of hardware, networking and software. China has been developing and adopting some of the most-advanced technologies.

China needs to move up fast to upgrade its service industry which can place it at a unique and advantageous position. The country must ensure the right mix of English-speaking technical, business, and functional skills in the workforce to meet the needs of individual business segments and customer markets. This requires harmonisation of the demands of industry with the supply of trained manpower coming from various universities and educational institutions. The explosive growth of ICT has mainly been concentrated in urban areas. As the telecommunications sector moves to a more commercial and competitive environment, the government should implement practical policies to enhance the reach of IT to groups currently not well-served by the market. The real challenge is to promote the effective application and use of ICT to raise productivity and growth throughout the economy, not just in a few pockets.

First Published: Wed, April 01 2009. 00:54 IST