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Jerry Rao’s interview with BBC:
BBC, November 18, 2004

Transcript -

Anchor: Now, representatives of India’s software and IT services are in Britain for talks on the challenges facing the industry. India has established itself as one of the worlds leading centers for providing software and outsourcing services. Companies from the US, Britain and other countries in the West are flocking to India, attracted by the comparatively low wages and the highly skilled staff. However India’s success has also led to resentment abroad over the loss of jobs. It is an issue, which surfaced particularly during the recent US elections.

Joining me now from one of our Central London studios is Jerry Rao, he is Chairman of NASSCOM, that’s the National Association of Software and Service Companies in India.

Anchor: Jerry looking at it from the West’s point of view, from Americas and Europe’s point of view, what do you say to those employees who have lost their jobs because their jobs have been exported to India?

Jerry Rao: For the individual employee, he or she who loses the job, it is obviously a traumatic issue. But frankly, all-disruptive technologies do that. When there is a change in technology, suddenly people who were running horse carriages, they were without jobs and people who drove automobiles had jobs. Net Net it does add to the total GDP and in fact the total number of jobs created in the UK or the US have gone up as a result of this and we have compelling economic evidence to that effect, but for the individual it is difficult, and I think the only way society can deal with that is with appropriate retraining mechanisms.

Anchor: And of course it does wonders to the Indian GDP as well doesn’t it, can you quantify it at all.

Jerry Rao: That is true, we believe that by the end of the decade, with employing 0.2 to 0.3 % of India’s population, direct basis, we will contribute about 8% of India’s GDP and about 40% of India’s exports, so it does wonders and it is important to realize that the IT workers and the call center workers in India end up buying insurance policies from British companies or credit cards from American banks or buying Nike shoes or buying Korean refrigerators, so the globe in general does benefit when they get rich.

Anchor: But you are not the only ones doing this. China particularly could be your main competitor in the coming years.

Jerry Rao: Its interesting in this industry as you know, you both compete and collaborate at the same time. We look at China as an attractive market place for us, we also see it as a potential competitor over time. Right now I think they are so focused on their domestic industry, they have not gone so much on the export of services, but they will. The absence of the English language is something that they suffer from, they are rapidly catching up on that. So we do see China both as a competitor and as a collaborator and as a market.

Anchor: And what about the effect it has on society generally because really you are creating a new professional class and who are very young and very well to do professional class

Jerry Rao: And you know, you have to look at some of the interesting tid bits out there, more than half of the employees in my company are women and these are women who have suddenly become the highest wage earner within their family, so what does this do to general relations in a country which is otherwise very conservative. So yes, I think all kinds of social changes are happening, we are too near the action frankly, to be able to comment on it. What is for sure is that this success of India’s IT, of India’s BPO industry has given the country renewed confidence. I hope it just doesn’t remain there and we are able to kind of extend this success to other sectors, to agriculture, to industry so that overall all Indians can get wealthier, can get more prosperous and it just doesn’t remain just an island of prosperity

Anchor: Jerry Rao, fascinating subject thank you very much indeed for that.