In continuation with the yesterdays post, i came across a couple of interesting article's / post, Think Flat blog followed up with another post on India, China Outsourcing and Fortune has an article titled Why India will overtake China.

Some interesting excerpts from both of them:

- But wait, even many Indians blame democracy for the country's poor economic performance for so long. They're wrong. India made a lot of poor economic decisions not because it was democratic but because, well, people made bad decisions.

At least India's democracy never did anything quite so mad as launch a Great Leap Forward (30 million dead) or the Great Proletarian Cultural Revolution (millions more).

The inspirational first generation of Indian leaders was, unfortunately, soaked in the thinking of the Fabian socialists (if only Nehru had gone to, say, Chicago, in the 1930s rather than London, how different India's history might have been!). They believed that growth comes from government plans, not profits, and that capitalism was the cause of poverty.

India adopted this outlook, added a dash of autarky, and created a mixed economy that managed only the "Hindu rate of growth" (about 3 percent) for two generations.

In 1991, impelled by crisis, India broke out of this mind set. Since then, India has undergone a peaceful cultural revolution. The Fabians are in retreat; entrepreneurs are social heroes; and the country has a newfound confidence that it can excel in the global economy.

In short, India is nearing a tipping point of economic transformation.

- Companies have elected to outsource IT functions and business processes and/or established captive centers there primarily for the following reasons.

Support operations in China that require local knowledge as well as IT or business process skills;
Serve Asia/Pacific markets that are culturally, linguistically, and economically linked to China;
And, Avoid over-dependence on other low-cost sourcing locations such as India or the Philippines.

Responding to, and in some cases anticipating these market forces foreign services companies such as Infosys and others have established development and delivery centers in China, and not simply because of the country's low cost skilled labor.

- China versus India debate assumes that the Chinese government and services industry can or are even looking to replicate the combination of market conditions, business drivers, government policies, entrepreneurialism, cultural factors, and luck that enabled India to achieve its current position.

- the future of global sourcing will not be about country versus country. Just as China is emerging as a sourcing location the picture in India is changing, as it is in other countries. China may indeed become a leading sourcing location someday but it will be in a market that is significantly different from the one that exists today.

Source: 1 (via DealArchitect), 2

Prashanth Rai