The Great Indian Dream

NYT, March 11, 2004
By THOMAS L. FRIEDMAN

Nine years ago, as Japan was beating America's brains out in the auto industry, I wrote a column about playing a computer geography game with my daughter, then 9 years old. I was trying to help her with a clue that clearly pointed to Detroit, so I asked her, ''Where are cars made?'' And she answered, ''Japan.'' Ouch.

Well, I was reminded of that story while visiting an Indian software design firm in Bangalore, Global Edge. The company's marketing manager, Rajesh Rao, told me he had just made a cold call to the vice president for engineering of a U.S. company, trying to drum up business. As soon as Mr. Rao introduced himself as calling from an Indian software firm, the U.S. executive said to him, ''Namaste'' -- a common Hindi greeting. Said Mr. Rao: ''A few years ago nobody in America wanted to talk to us. Now they are eager.'' And a few even know how to say hi in proper Hindu fashion. So now I wonder: if I have a granddaughter one day, and I tell her I'm going to India, will she say, ''Grandpa, is that where software comes from?''

Driving around Bangalore you might think so. The Pizza Hut billboard shows a steaming pizza under the headline ''Gigabites of Taste!'' Some traffic signs are sponsored by Texas Instruments. And when you tee off on the first hole at Bangalore's KGA golf course, your playing partner points at two new glass-and-steel buildings in the distance and says: ''Aim at either Microsoft or I.B.M.''

How did India, in 15 years, go from being a synonym for massive poverty to the brainy country that is going to take all our best jobs? Answer: good timing, hard work, talent and luck.

The good timing starts with India's decision in 1991 to shuck off decades of socialism and move toward a free-market economy with a focus on foreign trade. This made it possible for Indians who wanted to succeed at innovation to stay at home, not go to the West. This, in turn, enabled India to harvest a lot of its natural assets for the age of globalization.

One such asset was Indian culture's strong emphasis on education and the widely held belief here that the greatest thing any son or daughter could do was to become a doctor or an engineer, which created a huge pool of potential software technicians. Second, by accident of history and the British occupation of India, most of those engineers were educated in English and could easily communicate with Silicon Valley. India was also neatly on the other side of the world from America, so U.S. designers could work during the day and e-mail their output to their Indian subcontractors in the evening. The Indians would then work on it for all of their day and e-mail it back. Presto: the 24-hour workday.

Also, this was the age of globalization, and the countries that succeed best at globalization are those that are best at ''glocalization'' -- taking the best global innovations, styles and practices and melding them with their own culture, so they don't feel overwhelmed. India has been naturally glocalizing for thousands of years.

Then add some luck. The dot-com bubble led to a huge overinvestment in undersea fiber-optic cables, which made it dirt-cheap to transfer data, projects or phone calls to far-flung places like India, where Indian techies could work on them for much lower wages than U.S. workers. Finally, there was Y2K. So many companies feared that their computers would melt down because of the Year 2000 glitch they needed software programmers to go through and recode them. Who had large numbers of programmers to do that cheaply? India. That was how a lot of Indian software firms got their first outsourced jobs.

So if you are worried about outsourcing, I've got good news and bad news. The good news is that a unique techno-cultural-economic perfect storm came together in the early 1990's to make India a formidable competitor and partner for certain U.S. jobs -- and there are not a lot of other Indias out there. The bad news, from a competition point of view, is that there are 555 million Indians under the age of 25, and a lot of them want a piece of ''The Great Indian Dream,'' which is a lot like the American version.

As one Indian exec put it to me: The Americans' self-image that this tech thing was their private preserve is over. This is a wake-up call for U.S. workers to redouble their efforts at education and research. If they do that, he said, it will spur ''a whole new cycle of innovation, and we'll both win. If we each pull down our shutters, we will both lose.''