Taking Silicon Valley by storm

By GovernanceToday
In Economy
October 15, 2015
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PM’s visit to US west coast a major boost for India’s IT industry

DIGITALINDIA-USA

Narendra Modi is the fi rst Indian PM to visit the Silicon Valley in over 30 years

The tour of Prime Minister Narendra Modi to the Silicon Valley gave a major boost to India’s IT industry as it included discussions with the CEOs of Apple, Google, Microsoft and Tesla, and ended with a dinner aimed at promoting the Digital India initiative, that saw the technology industry and the Prime Minister rain compliments on one another. Narendra Modi’s visit to the cradle and birthplace of the information-technology revolution marks the first visit by an Indian Prime Minister to Silicon Valley in over 30 years. The discussions that Modi had with industry leaders were focused heavily on opportunities rather than the challenges involved or substantive issues of implementation.

The Prime Minister Modi’s visit to the Silicon Valley comes in the backdrop of NITI Aayog’s report that claiming India has surpassed its target of Hardware export of worth $ 7 Billion during the thirteenth five year plan. The country also exported software worth $ 69 Billion during the same period of time to the US and other developed economies. The report says that India is on the path of registering a growth rate of 22 percent in exports of electronics hardware and may surpass the export target $20 Billion by 2016-17. The country may register a rise of 30 percent in hardware production and achieve the target of $122 Billion by 2016-17 in comparison to $ 33 Billion that it was in 2011-12. The multinational IT companies have been a huge source of employment here in India as they will generate direct job opportunities for 42 Lakh Indians by 2016-17 compare to just 28 Lakh in 2011-12. India will be getting a foreign exchange of $ 130 Billion by another couple of years just by exporting software and computer applications world-wide including first grade countries like UK and the US.   The multinational IT companies have been a huge source of employment here in India and will generate direct job opportunities for 42 Lakh Indians by 2016-17 compare to just 28 Lakh in 2011-12.

Keeping all these figures aside, a tangible outcome from Mr Modi’s sitting with the global CEOs was the announcement made by Semiconductor Company Qualcomm, whose CEO declared to thunderous applause that it was setting up a $150 million fund that would invest in the Indian innovation ecosystem and domestic start-ups. Qualcomm Executive Chairman Paul Jacobs also took a leaf out of the Mr Modi’s playbook by announcing that it would look to spearhead a ‘Design in India’ movement. Experts believe that Mr Modi successfully positioned India as an alternative to China, which has a taut relationship with Silicon Valley.

Facebook and Google are banned from the country, and the US government has accused China of stealing corporate trade secrets through cyber-spying. In a recent note, Baird Research analysts said India’s economy is growing faster than China’s, and could develop a larger consumer class within a decade.

GROETHRATEMr Modi’s visit has dispelled the myth that Indian tech companies are taking away jobs from American professionals. According to a report released by National Association of Software and Services Companies (NASSCOM) recently, the Indian tech industry contributed nearly 411,000 jobs to the U.S. economy this year. The report states that India-based information technology companies providing services to American businesses and other customers invested more than $2 billion in 2011-2013; paid $22.5 billion in taxes to the US Treasury in those years; and today support more than direct and indirect 411,000 jobs in the US – including 300,000 held by the US citizens and permanent residents.

The report also documented charitable activities by Indian IT services companies in the U.S. through volunteers, scholarships and grants such as a $35 million gift from Tata Consultancy Services to Carnegie Mellon University announced last month.

The report further noted that states leading the number of direct jobs created by India IT sector operations and investments are California, Texas, Illinois, New Jersey, New York, Georgia, Ohio, Washington, Michigan, and Pennsylvania. Texas, Michigan, Illinois, California and Georgia had the fastest rate of job growth in 2011-2013.

In addition to jobs, investments and taxes paid, the report estimates that philanthropic activities by Indian IT companies touched more than 120,000 American lives in 2011-2013, with a major focus on educating more Americans in Science, Technology, Engineering and Mathematics (STEM) skills increasingly needed by the US employers. The report also lists several recent examples of grants by leading India-based IT services companies including a $1 million grant by Infosys in computer science education in the US schools; an $8 million commitment from Wipro to support fellowships for STEM education teachers; and a $35 million commitment from Tata Consultancy Services (TCS) to Carnegie Mellon University in August for a new 40,000 square-foot technology building plus fellowships and scholarships for outstanding students.

Vinit Goenka
(The writer is a Member- Task Force (IT), Ministry of Shipping, Roads and Highway, and Ex National Co-Convener, IT Cell, BJP)