By Yogendra Kalavalapalli
Mint, New Delhi.
Is managing director of research and consultancy firm International Data Corp. (IDC), Asia-Pacific excluding Japan, Eva Au has a bird’s eye view of technology trends in the region. Au, who was recently in Hyderabad to participate in the IDC Insights Awards function, spoke on the technology challenges that governments face as they try to evolve in an Internet economy, and underscored differences in the start-up ecosystems of China and India. Edited excerpts —
Q: Even as the Indian government is pitching its Make in India campaign, do you think India can match China’s capabilities?
A: Do I think India has the competence? Yes. Do I think it will be good enough? Yes, India has the capability. The intellectual capacity is there. China is today ahead because the government supports them (companies). Take the phone manufacturers in Shenzhen as an example. Shenzhen (in Guangdong province) has the most well-established ecosystem, from R&D (research and development) to manufacturing and assembling. About 80% of the mobile phones in the world were manufactured in China in 2014. Given that Guangdong is the single largest province in China in terms of mobile phone manufacturing, around 60% of the mobile phones in the world actually come from manufacturers in Guangdong. Key players ranging from large-scale OEM/ODM (original equipment manufacturer/original design manufacturer), IC (integrated circuit) providers and electronic components providers to application vendors have a presence there. There is an ecosystem there. It is not just Chinese companies. There are US multinationals such as Intel. The local government has put in a lot of effort to support the local industry in Shenzhen.
India is also not far behind in this race. I would say there are more entrepreneurs in India than in China, but they are individual companies striving hard towards growth. The growth ultimately will happen, but it won’t be (a) coordinated (effort) like in China. It will happen at an individual pace. The government set-up of these two countries is very different. In a way, it is an interesting comparison, but also not a fair comparison.
What you see in China is the government trying to mix entrepreneurs towards one big social cause. Here, you have a lot of entrepreneurism, many great ideas of making money, but what is missing seems to be a vision of how technology can be a fundamental part of the socio-economic development of India.
Q: But most Indian and Chinese entrepreneurs make products that are copycats of Western ones…
A: Calling them copycats may not be a fair statement. Baidu started off on a similar model as Google. We all used to think all that China does is imitating. But you can see whether it is Baidu, Alibaba, Tencent, they are now ahead of the game of copying. Can India do it? Yes. People could say that Flipkart is just going to mimic. But at the end of the day, Flipkart also knows that they have got to move forward, they have got to make themselves different. Because it is an Indian company, people in India would prefer to buy from it. There is a future for local brands, but they have to do something different. And it’s not impossible. Whether it is China or India, there is that hunger with young entrepreneurs that we want to be better than America or Western Europe. The 20-something-year-olds think in a very different way. Don’t slow them down.
Q: There has been friction between the government and start-ups in India as the Internet economy evolves. Is the government under-prepared?
A: In today’s society, technology is forcing business decisions to move a lot faster than what it used to. The more technology savvy, typically the younger generation, who grew up with computers and tech gadgets, knows how to utilize technology to communicate, to innovate and to build newer ideas.
For the younger generation, it is about challenging the status quo and making changes fast. Then you come to established institutions such as the government, which are about maintaining status quo, and making slow, incremental changes after reviewing its social impact.
So, now you are bringing two very diverse views in, and trying to find an equilibrium. This isn’t unusual for any country to move forward. A cordial alliance needs to be built between the two parties, and that takes time.
Q: But how does a government overcome technological challenges?
A: Many governments, including the US, are asking that question today. First, the government needs to set a vision of what it aspires to be. Perhaps it is about building stronger partnerships with technology-driven companies to improve the social causes in the country.
You then need strong leaders who understand the need to change and can drive this collaboration. Whether it is the head of government or may be at the second level, they have to keep abreast of the fast changing aspects of technology as well as embrace it in its various shapes and forms — social media, mobile apps, cloud and Big Data analytics.
Q: The Internet of Things (IoT) is touted as the future of companies. But what about the concerns of privacy and security that it raises?
A: Everyone talks about IoT as the next best thing, but consumers don’t really know what that means. IDC defines the Internet of Things as a network of networks of uniquely identifiable end points — or things — that communicate without human interaction using IP (Internet Protocol) connectivity. But this opens up security and privacy issues.
All the data that is being collected by these things can be hacked and exploited through apps, photos, videos, GPS (global positioning system) and social media.
As more and more devices become Internet of Things, I think there will be more scope for improvement.
Today we don’t know what lies in the future. So, everyone is openly embracing IoT. But over time, with advancements, the government will be expected to draw the line and say, this is how it works.
I go back to the same problem… In today’s environment, the rules of engagement, the way we sell, the way countries are governed, are going to be very different from even 10 years ago.