This news excited me no ends….. Sobha Renaissance Information Technology (SRIT) of India has entered into a joint venture (JV) with Yunnan Sunpa Image Tel Tech Co. Ltd (Sunpa) in China to form a new entity called Sunpa Sobha Software (China) Ltd. Headquartered in Kunming, Sunpa Sobha Software (China) Ltd. will have operating branches in Beijing, Shanghai, Guangzhou, and Shenzhen. This is the first JV between India and China in Healthcare ICT.
During Chinese Premier Wen Jiabao’s visit to India last year, his first stop was not the political capital New Delhi but the ICT hub Bangalore. Addressing a crowd of 4,000 ICT professionals, the Premier shared his vision with those present by promoting a new era in Sino-Indian cooperation. “You are No 1 in software. We are No 3 in hardware,” he said. “If we put these together, we are the world’s No 1 in both. ” It is no surprise to understand the impact if Asia’s giant neighbors seek to combine each other’s reciprocal strengths in ICT.
The example of Sunpa Sobha Software (China) Ltd. Should go a long way to unfold this puzzle. According to a recent Forrester report, “How India, China Redefine the Tech World Order”, over the next five years markets in India and China will account for nearly 40% of all personal computers (PCs) and a significant share of all mobile telephones sold worldwide. Production sectors in both countries stand to gain enormously from this potential growth. Chinese businesses have been slower to establish bases in India.
The most significant investment so far comes from Huawei & ZTE, both members of India China Economic & Cultural Council (ICEC), seeking to take advantage of India’s software talent, has established a research-and-development (R&D) institute in Bangalore. While in India both the production and consumption of consumer electronics are still relatively low, the country’s vast population and rising middle class make it a hugely important potential market. At the same time Indian IT companies like NIIT, Aptech, Infosys, AIIT, Tata Info Tech ( TCS ) have an active presence in China.
The need of the hour is for SME’s of Indian ICT sector and Chinese ICT sector to set up bases in each others countries. They should not only look to each other as markets but also are R&D centres. Innovation in ICT is another space where India & China can work together. In 2010, Chinese companies filed a record 313,854 patents making China the second largest patent filer in the world right behind the US with 326,945 patents. Similarly, the Indian government has set up the National Innovation Council to discuss, analyze and help implement strategies for inclusive innovation in India and prepare a Roadmap for Innovation 2010-2020.
In an optimistic situation, India and China rapidly evolve into ICT innovation superpowers with active support of Western companies who benefit from their rise as they deepen their presence in both giant Asian markets. In a pessimist situation India and China fail to realize their ICT innovation potential due to restrictive domestic policies, lack of easy access to venture capital, and a risk averse culture. Then there is the worrisome scenario, Indian and Chinese firms compete head to head against the backdrop of protectionist government polices that restrict market access in their respective countries.
In the coming decade, Indian and Chinese ICT companies will end up competing with their Western rivals not in their respective home markets but rather in other big emerging markets such as Africa and Latin America. India and China need to invest significantly more to upgrade their countries’ IT innovation infrastructure in order to motivate western MNCs to shift their strategic R&D activities to both countries. For instance, China needs to urgently improve its intellectual property regime. India has done better in this area. The hardware & software approach thus stretches from the economic to the political sphere.
To merge these two sides would clearly be a very potent combination for a new world order. Yet, for this to occur India’s soft power with its focus on services, the free flow of information, strong civil society and resilient democracy must acquire the discipline, focus and determination to implement the pro growth policies that has allowed China to boom. While across the border, China’s traditionally rigid authoritarianism must soften enough to allow for the innovation, creativity and flexibility that the next stage of development requires.
Just like the first India China joint venture (SP Chemicals, China and India’s Bhoruka Industries) has been established in a thirs country Australia, for oilseed crushing and edible oil refining plant in New South Wales, several Indian & Chinese ICT companies can establish their JV in other countries ( besides India & China ), if they can understand their strength & act with wisdom. Or they may both suffer in competition with each other. The choice is theirs to make.