But where is the hardware?

Written by  //  September 5, 2010  //  Science & Technology  //  5 Comments

Being a technologist from the top Indian institute, I am surprised how many young Indian students in science and technology take software industry as some great triumph of Indian science and one of the most remarkable stories of success in post independent India.

I am going to write a sharp diatribe criticizing this inane and ignorant journalistic view point, mindlessly endorsed in popular culture and media, which unfortunately is 180 degrees from truth.

True, worldwide Indian IT industry has attained success, it supplies products and services to large businesses and has succeeded in expanding into overseas businesses as well.

But wait a second! If anyone is even remotely suggesting that Indian IT industry is an engineering triumph, he is way way off the mark. Indian IT industry is success of a good business model, led by some formidable captains, who have fought hard to change the existing norms against fledgling start ups and as a result achieved success. But that is it!

In terms of size, scope and depth, Indian IT industry is not even one – tenth (more like one-twentieth actually) of its American counterpart! Let me take some rough figures.

The total revenue of Indian IT products currently is about $50 billion, expected to rise to about $200 billion by 2015.

Let us compare it with the size of chip industry in the world today. The total industry size of semiconductor chips is about 2.3 trillion dollars! And this is only and only semiconductors! ( I am ignoring other major industries in technology as of now, which also make a very very substantial chunk). The big share in this pie is by US chip manufacturers and Japanese chip companies, both of which have striven very hard to create a business empire built on exceptional innovation in fabrication principles and some brilliant technology innovation in microprocessor design, accompanied by highly acclaimed business models. Indian companies have ZERO share in this massive market.

The observation is true not only for Indian companies, but also for the graduating students from best Indian institutes (like IITs) [many of whom are employed in the US] who still do the task of software engineering, rather than chip design or operating system architecture.

Being a graduate from IIT itself, I can clearly identify that a major curriculum reform (by encouraging more engineering projects) or technical experimentation needs to be made a central feature of our education and internshis if we expect Indian engineers to do the more difficult and harder tasks of engineering systems design and implementation, and work on mission critical systems in important organizations like ISRO, geo – spatial systems or scientific computing for modeling behavior.

Needless to say, we strictly need to be cautious about the hoopla that surrounds our elite institutions, adopt a critical approach to train students in best methods and build capabilities that can help India built systems (both in industry and in research centers) that are robust, neatly designed and robustly architectured and thought through.

Otherwise, like the previous generations we will keep writing software and students from other nations trained in more advanced and specialized techniques and methods will keep doing the more intellectually demanding, satisfying and also economically significant (i.e  more revenue and profit generating activity) of building hardware.

5 Comments on "But where is the hardware?"

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  2. Vipul September 5, 2010 at 2:58 pm ·

    Sumeet, your numbers are interesting, and I don’t see any prima facie reason to doubt them, but a reference for these numbers would be nice. (I’ve just seen a lot of POOTA figures that get echoed around the Internet for years and become canon, hence my wariness on this count).

  3. Vipul September 5, 2010 at 3:16 pm ·


    I agree with you and would go even farther and say that the bulk of Indian IT success has been in the form of creating a low cost IT analogue of a factory — rather than cutting edge technological innovation. As India gets richer and Indian labour becomes more expensive, IT outsourcing will move to other countries (a theme I would take up later).

    But I think you’re wrong in pinning hopes on high tech in India. High tech in India is impossible in the short run. Even though there are a few talented Indian individuals who can do high tech, they can be a lot more productive by doing this working for a foreign company (whether they work in a foreign branch or an Indian branch). Moreover, the benefits of high tech are not restricted to the companies or countries of incorporation of those companies. Even if microchips aren’t being developed in India, Indians as consumers are reaping a lot of the benefits of these.

    My hopes would instead be on low tech things such as retail (see this and this, for instance) and transportation (road development). I will expand on this theme in a separate post.

  4. Akshat Rathi September 6, 2010 at 1:52 am ·

    Intel Bangaloer is involved in chip design. This is not to say that it derails your argument but a minor correction.

  5. Sumeet September 6, 2010 at 6:30 am ·

    Will do that. Actually my reference is more from the ‘inside’ of some pdf documents, and hence not accessible easily. For example, even if I include the reference to the document here, it will take the reader some scanning to find the exact number (say it is on page 10 of the document).
    What should I do in such a case?

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