`Software sector to see fastest growth' -- Slowdown will create more jobs here, IT students reassured

Neha Kapoor

MUMBAI, June 7

THE US slowdown is a going to be short-lived; it is not a recession and will not affect demand for Indian IT professionals in other regions such as Europe, Japan and Australia, according to Dr Arvind Shah, Founder-President, National Association of Computer Trainers (NACT).

In an interview to Business Line, Dr Shah spoke about the need to send a reassurance to IT students that software services will continue to be the fastest growing sector of the economy and the slowdown would, in fact, create more job opportunities within India as the off-shore model gains in popularity.

Excerpts:

How serious is the US slowdown? How has it affected the job market here?

The US slowdown is a short-term phenomenon and is part of boom-slowdown cycle that America has gone through earlier in other industries too. The slowdown only means that there will be positive, but slower growth.

In fact, it will make US companies more competitive and lead to a shift to the off-shore model, with business being outsourced to India. So, there will be lot of job opportunities created here itself.

The message that NACT wants to send out to IT students is that the jobs are not going anywhere. There are plenty of jobs even now and what you have to keep in mind is that it is the software services sector which will continue to grow the fastest among all other sectors of the economy, irrespective of a slowdown.

Also, students who are going for IT training now will take another year or two to complete their courses and this will give them enough time to ride the slowdown.

When you speak of the slowdown as a short-term phenomenon, what timeframe are you looking at? By when do you expect things to turn around?

A historical analysis of the last few US business cycles leads us to believe that the slowdown would last for around 11 months. Having started last September-October, we should see a recovery around October this year.

Wintech Computers has recently downed shutters. Zap Infotech is reportedly lagging behind in course deadlines, while a lot of other smaller computer training institutes have shut down. Did this have anything to do with the slowdown?

The shutting down of these companies has nothing to do with the US slowdown and ideally, it should not affect the training industry as they were not considered as serious players right from the beginning.

All I can say to students is that they should be very careful in selecting training institutes _ look at their size, infrastructure, courseware, and speak to someone in the software industry before joining one.

India is now looking at other regions like Australia, Japan and Europe as potential markets. What kind of demand do these geographies represent for India?

There has always been a demand for Indian IT professionals in these regions. It's just that we were too busy addressing the US market to consider other regions.

But the US slowdown has made companies to focus more seriously on other geographies and we hope that lean patch due to the US slowdown will be offset by pent-up demand in these areas.

As far as software courses are concerned, what is in demand right now?

There is still a strong emphasis on fundamentals so languages like C and C++ are quite in demand, compared to application areas like e-commerce. There is also a growing demand for Linux. Microsoft's .NET and C Sharp are quite a craze right now.

What about embedded software?

There has always been a demand for embedded software and it continues to grow, but it is not handled by our institutions as it is too difficult to teach. You have to know the language, chip architecture and hardware, so it becomes more difficult.

You spoke about the off-shore model becoming popular with increased outsourcing to India. What makes India the preferred choice compared to countries such as China, the Philippines and Thailand?

India is the preferred choice mainly because of the quality of our work. Of the 38 CMM 5 level companies in the world, 21 are in India.

And this certification indicates a high level of quality for both products and processes. Apart from this, we don't need to market ourselves as we are already established in the software business.

Another advantage that is usually understated is our proficiency in the English language.

But in China, labour is available at rates that are 15 per cent lower as compared to India, and it is also working at improving language skills. Are we geared to handle competition?

Its true that wages in China are much lower than in India, where other things like infrastructure and telecom costs add to the total cost.

But quality is our stronghold and is a very important factor in determining success. No doubt China will be a formidable competitor, but we still have the first mover advantage and an established clientele which will go a long way in sustaining business.

This is not to say that we can rest on our laurels, because to fight competition, we need to move up the value chain with higher value addition in our services. We need to develop domain expertise and play on these capabilities.

Pic.: Dr Arvind Shah, Founder-President, National Association of Computer Trainers (NACT).