Avi Basu is the President and Chief Executive Officer, Connectiva Systems, a New York- headquartered IT company that specialises in software dealing with revenue and fraud management. A member of President Obama’s team of 100 CEOs that visited India last month, Basu spoke to Swati Garg on the future of outsourcing and the manner in which niche IT companies fit into the current scheme of things. Edited Excerpts:
What did you make of the President Obama tour, especially the outsourcing debate?
The outsourcing debate is rhetorical and not real. The outsourcing-ban train has in fact left the station. It is a case of politicians talking to their constituency and not the reality. The President did say that he is not bringing out the outsourcing bogey man. I do however think that India has to do things with skilled manpower and in a cheap manner. We do, however, need to get out of the outsourcing mode, because outsourcing is no longer the ‘big picture’.
How is Connectiva different from the outsourcing bandwagon?
We are a niche company that focuses on providing security solutions. What we have in India is the creation of technological expertise rather than body-shopping for cost reduction in India. We are a high-tech company that functions on the creation of technology expertise-based products, which come from India. What we and others like us do is not outsourcing or off-shoring but trade on an equal footing. The critical part of building intellectual property in India is different from coming here for mere cost-cuts.
Do you see this being adopted more widely, given that cheap labour has been our strength?
I think that has already changed. Increasingly, the focus is on providing high-tech services based on high-skilled labour, which is costly. The cost of this labour is either already comparable or will increasingly become comparable with the cost of skilled high-tech labour in the US. What transpires, therefore, is that the cost of labour in Bangalore will increasingly become comparable, if not equal to, the cost of similarly skilled labour in the Valley.
What about the future of Business Process Outsourcing?
BPOs will still have a future, only they are not the future. They have been key drivers for the economy. India today is poised to create jobs in the US. India is still only the 12th trading partner for the US. While IT would still be leading the trade between the two countries, there are other sectors like agriculture-oriented technology exchanges, which will also be taking centre-stage. Our ability to create goods and services that they would want to buy would define trade. The focus would thus shift even in IT from service exports to goods exports as well.
What needs to be done to ensure that this happens?
The process and culture of innovation need to be encouraged. This would mean the defining factors of our success in the past decade would also need to be enhanced. India has reached where it currently is based on the innate strength of a population, which speaks English very well.
While preserving this, I think the idea now should be to aid technology-based skill development.
