The potential and promise of the IT and ITES sector need to be appreciated
A friend and I recently looked back a few decades, talking about how technology and professional education have created a new economic sector. I recalled how during a visit to an agricultural research institute (it must have been the late-1990s) an official there mentioned that the commercial value of sorghum grown in India was $2 billion a year.
Those days, the Santa Cruz Export Promotion Zone near Mumbai was the star in India’s software exports. Sharing a hundred acres of land with gem and jewellery manufacturers, and employing 50,000 to 60,000 employees, the software units in SEEPZ earned around $2 billion a year. Look at the difference in productivity.
Of course, it is not the dollar value that predominates. Sorghum cultivation sustained hundreds of millions of people, and gave them employment. But the point is the growing importance of software and services export in the Indian economy, from what is commonly called the Information Technology (IT) and IT Enabled Services (ITES) sector.
We wondered about the current situation — when Indian exports in the IT and ITES sector are worth about hundred billion dollars a year. Has this sector beaten sorghum, rice and wheat in terms of commercial value?
A quick check. Take about 107 million tonnes of rice and a little less than hundred millions of wheat in 2013. At international prices, they add up to about $80 billion (rough estimates). Agriculture is much more than foodgrain production. Besides, you cannot measure the value of foodgrain production purely in terms of money. Over 500 million people find employment here. But the point is the growing importance of IT & ITES exports in the Indian economy.
Thirteen years ago, Professor Michael Dertouzos referred to Indian exports of software and services in The Unfinished Revolution. He looked ahead 20 years and visualised 50 million Indians working for the global market through the use of IT. What would it do to India’s GNP? He was not merely day-dreaming.
We have seven years to get to the point he visualised, and it is difficult to say if we will by then have 50 million Indians working in IT or with the help of IT to provide services to the global market. Achieving that goal would mean a 50 per cent increase in our GDP. However, we can be sure of one thing: Indian export earnings from the IT and ITES sectors would be way above $100 billion seven years from now. Agriculture accounted for only about 13.7 per cent of the economy in 2012-2013, according to a report on what was stated in Parliament.
Clearly, the IT and ITES sector has gained an important place. Secondly, its contribution is growing, and is nowhere near saturation. The risk is that we might fail to recognise the big trend and not demand what needs to be demanded. India could still miss the great opportunity as it missed the first Industrial Revolution. Let me name just three issues.
What can IT do for Indians directly? Online railway reservations and access to banking have made an impact. E-mail, the World Wide Web and smartphones have made a difference. Is IT-enabled education likely to be the next big thing?
What can we do to spread the benefits more? How can a larger number of Indians find their real economic worth by putting their services on the world market over the net?
What about equity? Is IT only for some? Can we give away free access over Wi-Fi to restricted Internet domains like the education and government service domains (.edu and .gov.in) from every school, public library and panchayat office? Why not? What would it cost? Just some thoughts.
(Dr. Ramani, who helped establish Internet facilities in India through ERNET in the 1980s, was recently inducted into the Internet Hall of Fame: email@example.com)
This article has been corrected for factual error.