Bangalore vs BayArea - Part I

Era of Globalization has made each of us competitive and fight for our share of the larger pie. Starting today, I want to document all my thoughts on the new age/old age economics as well as compare both Indian Software Economy and American Software Economy in particular and provide a way to monitor how things shape up, accordingly. While this can be a generic topic, I want to be esoteric enough to objectively address only these two economies for now.

I've had the exposure of both the environments (born in Bangalore and living in Bayarea for the past 5 years), and I clearly think I have started to figure out the differences and know more about how these places tick currently. As we start its always beneficial to be ambivalent towards both these economies and objectively try to compare and contrast each in order to enable all of us to understand how Globalization is changing "Software Economics", the industry that feeds us and hence comments are welcome from all of you.

A little bit of History
We need to learn from our legacy its quite fascinating and really important to see the parallels.

Economic Impact during the BRITISH RAJ :
Indian economy was transformed into a colonial economy whose nature and structure was determined by the needs of the British economy.

India supplied all the raw material required for Britain's Industrial need, especially the cash crops like jute, cotton, iron ore and became the ready market for Britain's large-scale finished product. The cottage industries were destroyed systematically and India was forced to accept British goods, which were cheaper than the Indian counterpart.

High revenue demands and rigid manners of collection forced peasants into the clutches of the moneylenders. Expanding population put greater pressure as there was no corresponding development of industry. Britain's policy of trade ruined India's urban and rural industries.

Fast Forward to Service / Software Economy Driven by America (especially with all the Outsourcing happening), this is how it will read.

Economic Impact NOW :
Indian economy was transformed into a "vibrant" economy whose nature and structure was determined by the needs of the American economy.

India supplied all the IT resources required for the American Service Industry needs, especially the cash crops like software engineers, business process managers, technical gurus, call centre operators and became the ready market for Americas large-scale finished product. (Remember India still to a large extent does not produce Software Products). The local software industries were "acquired" systematically and India was forced to accept American software products, which eventually were "cheaper" than Indian counterpart.

High revenue demands (The P/E ratio that American Companies look at) and rigid manners of collection (software & service licensing) forced small & medium scale software shops into the clutches of the "moneylenders". Expanding population in India put greater pressure as there was no corresponding development of service infrastructure within India. America's policy of trade "took advantage" of India's software industries.

Approach
Well, do I have to take a pessimistic approach and assume that this how its going to be. NO. There are enough thinking brains in "India" not to allow this to happen. I have already read a few blogs which are calling out loud to prevent this from happening.

Will the USofA essentially create such a "Hostile Environment" with its "green dollars" and will Mergers, TakeOvers and Acquisitions be the norm of the day. Interesting questions, according to me, its not nations or people as such that resort to hostile actions. The "Laws of Global Economics" is unlikely to spare any industry which fails to adapt itself to the changing paradigms both in "Economics" and shifts within the "industry itself".

Tomorrow or my next blog entry : So will Indian programmers/companies start orienting themselves to produce "Software Products", then what about an American Programmer, can he then compete with someone who produces goods, by laboring at a fraction of a price (like $400 a month) - what are the options for programmers in America ? Stay tuned.