soft learning from east asian

Hearing many times from fellow software engineers that we in India do all low grade software job in India while the real innovative work is done by Americans. The industry is based on wage arbitrage which will go away once the other countries catch up. Then either wages will go down or software industry will die in the same spectacular fashion as it has risen in India..

Studying up the Japanese and other East Asian tigers'growth in the last 40 years between 1950-90, I find an uncanny resemblance between current status of software industry in India and the manufacturing sector in East Asian Tigers at the start of their growth period. Many of the technologies for manufacturing sector were licensed from their American counterparts primarily acquired through extensive interaction from the export led economy. The wage arbitrage and government support through various government measures helped the nascent manufacturing sector. And what finally happened was remarkable. Japanese got their best engineers to work on the shop floor and not on the design and they improved the manufacturing processes. Total Quality control, Just In Time Inventory were the products of this process improvement and in due time these firms became more efficient than their American counterparts. Toyota though has gone in red for the first time in 20 years is in a much better position than GM and ford.

The software sector in India has also used the licensed technology mostly from developed world (America and European countries) and started an industry based on wage arbitrage and small government support(like export incentives). What the industry need here is to use this arbitrage opportunity to develop processes which makes the Indian firms more efficient and simultaneously move up the value chain. This will not only provide the industry required differentiation in the increasingly competitive industry ( competition from other low wage countries) and will also allow industry professionals to earn higher wages due to higher skill required when moving up the chain.
But what the industry require is that the best brains as in the case of Japanese manufacturers like Toyota to work and improve the processes and not crave for the high funda work which is the current norm in the industry. Design is what geniuses shall do but if customers are paying for the processes, that shall be the focus of the genius.

This will allow the software industry to grow and have a large impact on Indian GDP. Though the impact will not be same as what manufacturing did for east asian countries, as the labor intensity for the software industry is low and the level of education in India do require a growth in manufacturing and agriculture sector for India to achieve an inclusive growth.