Bloomberg BusinessWeek: Indian Technology\’s Fourth Wave

Indian Technology\’s Fourth Wave

India\’s technologists are moving beyond low-level outsourcing work and starting to build sophisticated tech products

By Vivek Wadhwa

Industry consultants have long been predicting the demise of Indian info tech. They have cited attrition rates, rising costs, and even the advent of cloud computing as reasons why the Indian tech industry will suffer steep declines. But they have been dead wrong.

Within a short 20 years, Indian IT has grown from almost nothing to a $73 billion industry. Even during the recession, the industry grew 6 percent and remains on track to grow an estimated 15 percent this year. That is because Indian technology companies have been moving up the value chain to provide such high-value tasks as research-and-development and business-transformation services. Now Indian industry is riding its fourth wave: the development of sophisticated technology products.

The Indian technology industry got its start running call centers for companies in the West. In the 1990s, it took on low-level IT work and Y2K remediation. In the 2000s, it started performing sophisticated R&D. Indian engineers are today designing aircraft engines, automotive components and manufacturing plants, next-generation microprocessors, telecom products, and medical devices. According to Indian trade group Nasscom, India\’s engineering R&D services industry has grown from $1.4 billion in revenue in 2004 to $10 billion in 2010. Nasscom forecasts that this will reach $24 billion by 2015 and possibly $45 billion by 2020.

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