In his speech, Professor Yang pointed out that this forum was a “perfect opportunity” because although BiMBA had invited executives and famous scholars from many different countries and regions, such as Europe, North America, Japan, Korea, as well as Hong Kong and Taiwan, to give lectures here, “the voice of India was hardly heard”. Professor Yang said that when the name of India was mentioned, three words would immediately occur to his mind, namely, the IT industry, software outsourcing, and “The World Is Flat”, the title of a recent bestseller. In recent years, the IT industry of India has experienced fast development, obvious benefit of industrial congregation, and expansion of its total scale, which has never happened anywhere else in the world. This has also provided a precious model for the development of Chinese IT industry, especially that of Zhongguancun Science Park.

The Trilogy of the Software Outsourcing Industry of India

Dr. Anthony P. D’Costa introduced that Indian outsourcing companies were first merely engaged in simple programming and maintenance work depending on their low-cost labor force. Along with the development of world outsourcing industry, Indians grasped the chance and developed India into “The Office of the World”. Now, however, the ambitious Indians are no longer contented with their minor role as “The Clerks of the World”. Instead, they are trying to climb to the middle and upper streams of the industry and attracting multinationals to transfer to India their operations of R&D and knowledge innovation. He believes that only by participating in R&D and accessing the core technologies of the industry can the former supporting actor grow into a strategic partner.

Meanwhile, Dr. Anthony P. D’Costa pointed out that of the current global software market of a total worth of 750 billion dollars, the United States takes up 40%, Europe 40% and Japan 10%, adding up to 80% of the world total. Both India and China have realized that the software outsourcing market is too large for a few enterprises in any single country to occupy alone so that the best strategy is to cooperate with the rivals in the process of competition.

The Road to Success of Indian IT Industry

According to Dr. Anthony P. D’Costa, the fast development of Indian IT industry is largely due to the high status of education in the country and the government’s support to the industry. Since 2000, India has issued passports to 21.2% of its citizens for visiting the United States, which is the highest proportion among China, India, Japan and Korea. In 1991, the government of India invested to build SoftNET, a microwave telecommunication network capable of high-speed data transmission. “This was a pioneering step, which at least satisfied the development needs of the software industry for the next ten years,” said Dr. Anthony P. D’Costa.

At the same time, Dr. Anthony P. D’Costa also analyzed the challenges and crises faced by the IT industry of India, including lack of specialized core technologies and mainstream experiences and methods, excessive dependence on the US market for sales, and scarcity of specialized researches sponsored by doctors. “To escape from your fate of being stuck in the lower stream of the industrial chain, you have to continuously upgrade yourself and be always advancing,” said Dr. Anthony P. D’Costa. He also made an introduction of the development history of Bangalore, the Silicon Valley of India.

Zhongguancun, the Silicon Valley of China

In his speech, Deputy Director Yingqi Xia of the Administrative Committee of Zhongguancun Science Park gave an introduction of the situation of the park. At present, Zhongguancun Science Park consists of 17 specialized areas and accommodates over 18000 enterprises that employ 690000 people, 71 national key laboratories, 75 key research centers, and 39 universities and colleges enrolling 700000 students. In 2006, the enterprises in the park achieved a total income of 600 billion yuan, and 650 enterprises each earned over 100 million yuan.

Mr. Xia pointed out that Zhongguancun, which covers an area less than 200 square kilometers, accommodates 17000 medium and small enterprises, a density hardly seen anywhere else in the world. Of these enterprises, 56.6% are engaged in the IT industry. Zhongguancun has the world’s best policy to encourage venture capital investment. For the returned overseas students alone, 19 venture-undertaking parks have been established, not to mention a variety of comprehensive incubators. According to Mr. Xia, in an incubator, a hi-tech enterprise can save a lot of money and manpower, and can quickly obtain the needed market factors.

In Mr. Xia’s opinion, with regards to development mode, Zhongguancun, among all China’s hi-tech zones, resembles the Silicon Valley the most. He emphatically pointed out that Zhongguancun is now in its best period since its establishment more 20 years ago, in terms of the dynamic to launch new ventures, degree of internationalization, market concept, integrity and lawfulness, talent pool of companies, and wealth created.

Comparison between China and India: The Lion and the Elephant Are Dance Partners, and the Two Large Nations Will Rise Together

Once the discussion began, Mr. Xia asked Dr. Anthony P. D’Costa an important question: How can a science and technology park attract as many talents back as possible? Dr. D’Costa smiled and replied that the essential question should be “Why should they come back” instead of how much money we could pay them. Does our park provide good environment? Abundant projects? Hugh potential for development? Or diverse fields of research? Once we have got clear about these questions, we won’t have to worry about the lack of talents.

Later, the present BiMBA alumni and the entrepreneurs from Zhongguancun Science Park held various discussions with Dr. Anthony P. D’Costa and Deputy Director Xia. In this course, some BiMBA alumni stated that more than 50% of the Chinese software companies were medium and small enterprises, so they should seek cooperation with those Indian companies of similar scales and shared benefits. Others believed that feeding on the external “milk powder” was only an expedient choice, and the healthy and enduring way to keep us strong was to feed on “breast milk”. The relationship between Chinese and Indian enterprises would be cooperative in the short term, but competitive in a long run. All the participants agreed to this point of view, and widely recognized that Indian companies, while making profits in China as a matter of course, could bring training, configuring and consulting services as well as management experiences to Chinese software companies. What’s more, software outsourcing should not be regarded as simple “software processing”. Instead, whenever possible, Chinese software companies should deal with the customers directly and provide them with software solutions. This is crucial for achieving our self-dependent and lasting health.

In this regard, Dr. Anthony P. D’Costa believed that the huge market of China could provide many services needed by the government and corporations of India, and the cooperation between India and China could help India to establish a global service center in China taking full advantage of Chinese resources and talents to serve the whole world. On the other hand, Chinese enterprises could learn the Indian knowledge related to process management and quality control, and could enter the markets of Europe and North America via such cooperation.