Creating castles in Cyberspacen

The index, which ranks 55 countries on the basis of how they have been able to access and absorb information technology, ranks India as second-last, scoring 871 points as compared to the highest score of 5062 scored by Sweden that tops the list. The only saving grace, and that too only for those still smarting from the Kargil intrusion, is that Pakistan is the worst performer on IDC’s index, scoring 719 which makes even India’s score look a bit respectable. If you’re not benchmarking yourself with Pakistan, however, the IDC findings are quite sad.

The 55 countries are ranked and placed into four distinct categories Skaters, Striders, Sprinters and Strollers based on their scores. This year, there are 13 countries placed in the top category as compared to 7 last year and 16 comprise the second grouping.

The research includes 1998 actual data and 1999 estimates for 23 variables spanning four infrastructure categories computer, information, internet and social infrastructure. In fact, this year Sweden has surpassed the U.S. to become the world’s dominant information economy on the basis of the strength of its social infrastructure even though the U.S. tops the list for computer infrastructure.

But how does this index square with India’s massive growth in software exports, the fact that Indian software professionals are the rage the world over, or that Indian software firms like Infosys and Satyam are the darlings at the world’s most sought after technology stock exchange, the Nasdaq of the US?

Well, according to Matt Toolan, Director of IDC’s Global IT Market and Strategies Research, in order to make it big in a digital economy, “all infrastructures computer, internet, information and social have to be interwoven. It needs all the variables to support the IT revolution.”

Given this definition of what is needed to sustain and grow an infotech revolution, the sharp digital divide perhaps isn’t too surprising. Take internet connectivity, for instance. Even in 1999, 65 per cent of the internet-host computer were in the US, while another 22 per cent were in Europe. This means that less than 6 per cent of host computers were in developing nations.

Other indicators such as the number of personal computers per person, the availability of telephone lines, the cost of telephone services, access to the internet, and so on. In each one of these indicators, India comes somewhere close to the bottom, when ranked against most countries. According to the World Economic Forum, for instance, out of 59 countries ranked in 1999, for instance, India was 57th when it came to the number of telephone lines per capita. India’s 54th in terms of computer availability, 56th in terms of availability of the internet, and so on.

Moreover, a survey conducted by Nasscom in 41 cities of India, during March-May 99, indicated that there are at least 500,000 more people who want internet connection but cannot get it because of non-availability of infrastructure.

Even within the list of Strollers, India could learn a lesson or two from its counterparts in Asia. China, for instance, though ranking fifth from the bottom of the IDC survey, has been earning lurels for its efforts towards a digital economy. In 1998, four years after internet hit China, there were 2.1 million subscribers. By 2000, it is expected to have 7.7 million, which is expected to hit the 12.8 million mark by 2001. India, however, is a mirror opposite as far as its counterparts in the region are concerned, barring Pakistan, of course. Despite the Prime Minister’s much-hyped task force on IT, our internet target for 2001 has still not exceeded 2 million, far behind even that of China.

The Indian e-commerce scenario is no better. For business-to-business transactions, Indian industries are expected to reach an online penetration of 2 per cent by 2003 and 8 per cent by 2008. This would be one-tenth of e-commerce penetration in the Japanese industries during the respective periods.

While not disagreeing with the IDC findings, India’s IT gurus, however, believe there is enough room for optimism. Says N. Vittal, who is presently a member of the high-powered committee on convergence and has also been a member of the National Task Force on IT: “The IDC survey apart, let’s admit that the IT adoption pattern of developing countries has to be a little different. Here, one need not own a PC or be an internet subscriber to have access to a PC or the Net. So why talk of PC per capita?”

Thanks to the increasing number of cyber cafes, India has 8 lakh internet users, but only 2.8 lakh internet connections. Obviously, therefore, instead of concentrating of individual internet connections, it makes more sense for India to build more cyber-cafes. Similarly, though India has just 3.2 million PCs, it has 37 million cable television connections clearly providing internet through cable would go a long way in increasing the country’s internet penetration.

Vittal’s argument is fleshed out by Dewang Mehta, President, Nasscom: “As far as software exports are concerned, it’s to India’s credit that more than 203 of the Fortune 1000 companies have outsourced their software requirements to Indian software houses.” In fact, the industry is also banking on more support from the government. “Even though, the current IT spending as a percentage of GDP is less than 1 per cent, it is expected to grow to 2.5 per cent by 2003,” says Mehta.

Here’s hoping that India’s IT revolution is more real than just virtual!