Invasion of the "Body Shoppers." (India's Information Technology Industry)
Chatterjee, Pratap, Multinational Monitor
Buy a stack of securities from the Union Bank of Switzerland (UBS) in Geneva and your purchase will be registered instantly by a computer program designed in the southern Indian city of Madras and delivered to UBS and other banks by satellite.
If you leave UBS and take the Monday afternoon SWISSAIR flight from Geneva to Jeddah, Saudi Arabia, chances are that your airline payment transactions and those of fellow travelers will be processed by a software system customized in Bombay, India's financial capital.
If you call home from Jeddah, you will be patched through newly installed AT&T telephone lines by a computer system that was designed in India by Roltas India, a diversified refrigerator manufacturer.
"German auto manufacturers operate factories in the United States, American toy makers rely on Chinese workers and most of the VCRs in our homes come from Japan. So why not develop our software in India?" asks Kurt Johnson, analyst at the International Data Corporation in Framingham, Massachusetts, author of a World Bank study, "Software Integration Services: The Risks and Rewards of Offshore Software Development."
Designing software - programs that instruct a computer how to perform tasks such as word processing, number crunching, communications and business transactions - requires three resources: highly trained personnel, computer equipment (or "hardware") and a means to deliver the product to clients. The equipment costs a few thousand dollars and can be set up in a matter of minutes anywhere in the world. A continuous power supply and a dependable telephone line to transmit data to clients are also critical software-production assets. These services can be hard to obtain in India, but have been made available recently to those willing to pay a premium price. Finally, trained personnel are abundant in India. Training institutes such as the National Institute for Information Technology (NIIT) are matriculating more than 100,000 computer programmers each year.
Indian programmers rarely create major cutting-edge commercial software packages. Their typical roles in the global economy include customizing commercially available programs to a particular customer's needs and updating or debugging smaller commercial packages. But while good software engineers can earn $100,000 a year in California, their best and brightest counterparts in India earn $10,000. Less-qualified programmers in India are put to work on the monotonous routine of keying in largely repetitive computer code. In some large programming projects, this code can run millions of lines long, coding that would take a single full-time programmer 100 years to enter.
The origins of India's entry into the information technology race date back to the early 1980s. At that time, a generation of computer professionals that had trained at India's world-class engineering universities traveled abroad in search of jobs because there were few computers, let alone jobs, for professionals with their talent in India. A prominent example was Sun Microsystems co-founder Vinod Khosla, who realized his dream of setting up an international computer company and retiring by age 30. Today, Sun, which he helped create in 1982, is a $5.5 billion company with 13,000 employees.
Around that time, the computer industry made its transition from huge, prohibitively expensive "mainframes" to more affordable computer workstations and personal computers. Meanwhile, the Indian government slashed tariffs on computer imports in 1984 to promote the industry. Khosla's would-be followers started to bring personal computers to India. They quickly realized that Khosla's success could not be duplicated easily but that there were other ways to make money in the computer industry. One of these is to take advantage of the low cost of Indian programmers both in India and by sending them to the United States on work permits, a practice Indian programmers call "body shopping. …