The Case for Calcutta

Tuesday, September 6, 2005 | 1 comment

Dave Chen forwarded me a link to an article in the McKinsey Quarterly called: Ensuring India’s Offshoring Future. Below are the synopsis points of the article, which I think is worth a read:
* India’s lead in offshoring stems from its pool of well-trained, low-cost engineers for IT services.
* That pool is smaller than it appears, and there’s a risk that it may run dry in the most popular offshoring locations.
* For offshoring companies, India’s weak infrastructure is its least attractive feature.
* India’s policy makers must improve the quantity and quality of its graduates, strengthen its infrastructure, and disperse offshore demand for talent to second-tier cities and services other than IT.

Few months back, I wrote another article called Team-of-Twenty-One, pointing to the opportunity for MNC’s in second-tier cities from a cultural perspective.

In this post, I want to draw your attention to Calcutta, a first-tier city and the capital of British India until 1911 (and my hometown), full of excellent universities and colleges, and a very English-fluent population (the influence of the Raj can still be felt in spades). Calcutta has become a second-tier city by chance. Or rather, as a side-effect of the long-standing communist government which until recently, nurtured unionization, and caused the city to have become a breeding ground for a lazy, non-entrepreneurial work culture.

Always a seat of intellectual and cultural creativity, ranging from literature (Tagore won the Nobel Prize for Literature) to science to social entrepreneurship (Mother Teresa won the Nobel Peace Prize for her work in Calcutta), the city fell behind due to poor political leadership. In the last 5 years, however, the Government has woken up to the possibilities and the Communists have, lo and behold, embraced Capitalism. Especially, IT related Capitalism.

I have been advising the West Bengal Government’s IT Ministry (of which Calcutta is the Capital), and have found Dr. G.D. Gautama, the IT Secretary, a very well-meaning and helpful man, who follows up on all the referrals and leads that I send his way, diligently. In 1994, when I had first set up DAIS in Calcutta, Dr. Gautama was the Managing Director of the Finance Corporation of WB, and one of the few people in the Government, who I thought, could see beyond the narrow, domestic walls of self-interest and corruption. It is refreshing to see that the Government has chosen Gautama as the key spokesperson for its IT related efforts, especially at a time when Calcutta is indeed, the only remaining major metro of India that has not yet been tapped fully for IT offshoring.

And in my personal experience, the work-culture had never been an issue. My guys used to work 16 hour-days regularly, whenever needed, and I remember, I even pulled them off of Durga Puja pandals, (an annual holiday equivalent or bigger than Christmas in that part of the world), but they never complained. The customer had urgent needs. My team was ready to service the needs.

Management talent, however, is an issue, since the resident talent is less readily available. You would be better off bringing in some seasoned Managers from other parts of the country, or even the US. Good news: Bengalis are very interested in living in the heart of their culture, and you are likely to be able to attract very senior management without too much difficulty.

In Calcutta, unlike other parts of India, Culture is the main lure. Understand the Culture, and you will be able to leverage it to your own unique advantage. Money matters, but it is a strange place where people still value quality of life and emotional fulfillment above mercenary incentives. My senior guys at DAIS and Intarka were routinely head-hunted.

I never lost a single one of them.

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