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Technology Outsourcing

Dickensian India: Slums, High Tech & Mission to Mars

Flagship companies like Infosys have finally been pushed to raise their wages, whilst Indian outsourcing as a whole is slowly waning in favour of cheaper markets. Kathryn Cave looks at Dickensian India and the terrible tension between poverty and progress in the ‘tech country’ which appears to be rapidly losing its star.

“Dirty, straggling houses, with now and then an unexpected court composed of buildings as ill-proportioned and deformed as the half-naked children that wallow in the kennels.” It could be a scene from modern India, but is in fact Charles Dickens’ description of Seven Dials in London.  Indians love Dickens and the parallels are plain to see, from the slums that exist cheek-by-jowl with a rapidly expanding middle class to the print newspaper trade, which is growing so rapidly that even second hand papers have a market… just like in Dickens’ day.

Yet bizarrely, behind the streets of grime, stray dogs, print journalism and ‘urchins’, India has something of a tech image. Bangalore is a world renowned IT hub and hosts events at the cutting edge of the industry, like nanotechnology, which last year was attended by representatives from 12 countries. However, whilst the Indian ICT economy has thrived over the last decade on the back of outsourcing, it now seems to be beginning to lose its lustre. Mike Magee described  attending a conference recently where a senior official of NASSCOM (the National Association of Software and Services Companies) was asked whether salary rises for IT workers would impact the bottom line for the Indian outsourcing companies. The executive replied that outsourcers would simply move to other parts of country where things were cheaper. 

“It’s a relentless trend,” wrote Magee “and it means companies are looking outside India to countries where prices and the standard of living are much lower. The fear is that at some point the drive to keep costs low will hit a brick wall, and in 10 years there will be nowhere left where labour is cheap, leaving eight billion people on the planet looking for work.”

Infosys sits at the centre of any debate about Indian outsourcing. This former poster child for the successful Indian IT sector has been experiencing such difficulties of late that on 1st June it asked co-founder Narayana Murthy to return as chairman. This saw shares take a massive hike on the Bombay Stock exchange. Yet everything around the Infosys story has caused a rumpus and in an article entitled, “Brainpower alone cannot save India’s growth model”, David Pilling wrote for the FT: “The problems at Infosys are partly company specific. Yet they also raise uncomfortable questions about the limits of the Indian outsourcing industry and, more worryingly, about India’s development model itself.”

Murthy’s first move as chairman was to provide salary increases.  “For Infosys it was definitely not expected,” Ankita Somani, an IT analyst at Angel Broking, told the Financial Times. “Infosys has been going through a tough phase for quite some time. They have probably done this because of competitive pressure.”

Whether labour charges are too high for outsourcers, or too low for people to earn a decent standard of living, employment issues appear to be at the heart of India’s problems.  This March, Jan Breman, Professor Emeritus and Fellow at the Amsterdam Institute for Social Science Research, University of Amsterdam, the Netherlands released, “At Work in the Informal Economy of India: A Perspective from the Bottom Up.”  This looked at how 90% of Indians operate in an informal economy; a Dickensian underworld where the unskilled, uneducated and uncared for scrape a miserable existence with no predictable earnings and no physical or social protection.

Breman wrote: “Behind the façade of the middle to higher classes and their ever-increasing prosperity, so adored in the lore on shining India, lies the vast terrain in which the labouring poor masses are made to squat and toil in squalor.”

This is the very crux of India’s extremes and contradictions. In many respects it is a world leader in technology, it is the largest importer of high-tech weapons and it has a space trip to Mars planned for 27th November. Yet vast swathes of its population are locked into a cycle of poverty, rendered endemic by widespread corruption.  Interestingly, (on the back of this) Havas Worldwide Prosumer Report 2012 shows that 83% of Indians would like to be part of a truly important cause versus 45% of UK and 61% of US.  Vikas Puthran, Vice President of GiveIndia believes this is because: “In India we see ‘in your face reality of the under privileged’ on a day to day basis.”

In nineteenth century London, Dickens himself managed to rise from the mires of poverty by providing new stories for the people. This could certainly be an option to any extremely talented Indians out there too. The population craves stories, generates huge downloads of reading apps and as a symptom of this, Harlequin released its first local language versions of its Mills and Boon stories last week. However, vacancies for writers aside, the real opportunity at the local level is within technology…

The area where Indians really excel in on-the-ground technology is through providing simple solutions to local problems. This trend is also clear across other emerging markets where desperate localised issues are simply not understood by the wider world. In a March blog for the Times of India, Google’s Eric Schmidt cited the case of Redbus, which provided an answer to the inefficient mess created by multiple bus companies working country-wide. However, India, like most regions, has cultural issues of its own which limit local tech progress. The World Startup Report on India, for example, showed that one of the core challenges for young entrepreneurial Indians in launching a tech start-up is that they believe it blights their marriage chances.

There are also some interesting schemes out there which aim to utilise tech to help people on the ground. These go beyond well-known global initiatives like computers for schools, and one Indian programme that pops up a lot, on Google at least, is US mPowering.  Operating in conjunction with local charity, Citta Foundation , this provides impoverished families with smartphones “loaded with culturally customised mobile apps and location analytics (similar to Foursquare).” The difference is that mPowering - which is orchestrated by ex-Apple executive, Jeff Martin - offers paternalistic rewards for doing the right thing. This means mothers can earn points for attending preventative healthcare classes, children can earn points for attending school… and families can pool points on a monthly basis to redeem them for food, clothing and medicine.

Whatever your view on this type of system, it certainly all sounds extremely Dickensian. In fact, it smacks a little of Dickens’ own paternalistic vision of Urania Cottage which created a utopic home for ‘fallen women’.  This idealised house of correction had strict rules, championed domestic duties and provided a full on social experiment… with Dickens and the philanthropic lady who paid the bills, Miss Angela Burdett-Coutts, exchanging extensive correspondence on what the inhabitants should wear. 

Tellingly, Dickens insisted on cheerful costumes stating in one letter: “Colour these people always want, and colour… I would always give them… In these cast-iron and mechanical days.”  Maybe nearly 170 years later something should be made out of the red henna, beautiful embroidered saris and spangley bangles so resplendent everywhere in modern India?

 

By Kathryn Cave, editor, IDG Connect

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