Taking right steps to climb the technology ladder

2015-06-16 16:29China Daily Editor: Si Huan

Something inevitable has happened to the relationship between hardware and software-the two have now largely merged into one.

And managing that successful marriage has become one of the cornerstones of sustained economic growth around the globe and a yardstick for fruitful partnerships between national policymakers and industry.

China seems to be very much on the right track, with its own version of this modern union, the "Made in China 2025" program, recently unveiled.

As this comes against the backdrop of the "Make in India" campaign launched by the Indian government to rejuvenate its own manufacturing sector, it's clear the two nations now share very similar information technology priorities.

"Made in China 2025" is aimed at integrating mobile Internet, cloud computing and big data with modern manufacturing, and encourages the development of several industries such as e-commerce and Internet banking.

Gordon Orr, the Asia chairman of global consulting firm McKinsey & Co, underlined in a recent article that the country's IT sector will be one of the key beneficiaries of the new initiative, which will help expand domestic demand, grow local manufacturing across multiple sectors, and boost exports in the next decade.

In the years I have been in Beijing, I have watched the country's IT industry evolve from the crowded stalls of Zhongguancun selling hardware of all kinds, into high-end manufacturing and research projects using cutting-edge technologies.

While Beijing certainly seems to be moving up the IT ladder, in my hometown Bengaluru, widely recognized as India's Silicon Valley, the industry is already on firm ground and has moved onto its next stage with a flourishing IT startup network focused on innovation.

The strongest evidence that IT will inevitably become important for China came during the recent Big Data summit in Guizhou province, where officials revealed they would set up a $10 billion project to build the country's biggest software and information technology industry hub.

The announcement underlined China's renewed push to build an IT services industry, to complement its manufacturing prowess.

The giant industry site will be created in Gui'an, a new city being built near the provincial capital Guiyang, spread over 32 square kilometers.

Understanding the importance of the initiative, the local government has sought the help of leading Indian software giants such as Tata Consultancy Services Ltd and Infosys Ltd, not only to be core tenants but also involved in its creation.

"We want to develop a really strong IT industry. India is the leader in software development so we hope Indian companies will play a major role," said Wang Jiangping, the vice-governor of Guizhou.

Sujit Chatterjee, the president of TCS China, said in a recent interview that there is significant potential and headroom for both India and China to grab a larger share of the global IT pie, working hand-in-hand.

"China has over the last three to four decades done significantly well in bringing down overall costs to economies of scale. Indian IT, on the other hand, brings in significant amounts of value creation through innovation," said Chatterjee.

"Together India and China would be a compelling proposition."

Though both India and China have long talked about complementing each other in hardware and software, there have been very few instances of actual cooperation.

And that's where the new "Made in China 2025" will really make its mark, say industry experts.

Leon Liao, head of marketing at Infosys China, tells me that globally the IT industry is undergoing tremendous change, with digital technology fundamentally transforming the world we are in, reshaping it with a digitalized future.

"India, as a world leader in IT, is at the forefront of software development, big data, analytics, cloud computing and other advanced technologies.

"China has a lot to learn from India in terms of software development and services, IT technology, designing and professional skills although it outruns India in areas like hardware manufacturing, infrastructure, and has a relatively larger volume of IT industry output and industrial and operational scale," said Liao.

He is certain the two countries can learn from each other, complement their respective weaknesses using the other's strength, and cooperate to achieve mutual wins.

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