Prologue to the Argument

Why are the roads inside the Infosys' campus so good and those outside are terrible? These are the beginnings of the recent much celebrated book, "Imagining India," by Infosys' co-founder Mr. Nandan Nilekani. This shows that the exponential growth in the information technology sector alone is not enough for developing India. These alarming words clearly emphasize the need for inclusive growth. No one would argue that the IT revolution has played a significant role in the economic prosperity of India. It is quite revealing to hear from the person who was at the center of it all that India needs growth in all sectors. Mr. Nilekani's views are in par with those of many leaders in India like Mr. Nayarana Murthy that we need a comprehensive growth that focuses on education, good governance and infrastructure among others. This inclusive growth needs to include innovation as an important component. Innovation has been a key player in the boom of the Indian information technology industry. In fact, the creation of this sector that could deliver value to its customers, more specifically international ones at a less cost in a timely manner is itself an innovation, which basically helped with the growth of the IT industry in India. Such innovations are also needed in other sectors in India such as manufacturing and agriculture. In fact, the biotechnology revolution in cotton farming with the infusion of Bollgard cotton seeds has increased the cotton production. This biotech revolution has put India in the international cotton map and is now the second largest producer. The Indian textile industry needs innovation to sustain and grow. In other words, there needs to be IT revolution. Here, IT refers to "Indian Textile Industry." This new IT revolution should lead to process and product diversification. Technical textiles should be a part of this diversification equation of the Indian textiles industry.

What is the Need for the New Diversification Equation?

Simply put, the changing economic order of the world, shift in the demographics in India and more importantly, the erosion of the competitive advantage India has enjoyed over the past decades in terms of cheap labor with regard to the manufacturing of commodity textiles are clearly compelling for the Indian textile sector to undertake the much needed revolution, i.e., IT revolution.

Why is the IT Revolution Necessary?

To answer this query, we have to look at no other place than the current India in terms of its political and economic scenarios. We just witnessed an orderly democratic election, which shows the stability of India. This political stability is extremely important in the globalized world. In the recent election, 24% of the electorate is less than 35 years of age. This showcases the young population of India as against the ageing population of China. The stable democracy and the free market policies will attract foreign investments into the country. Such foreign direct investments are extremely important to improve the infrastructure, health care and other important sectors. Although, the current global economic situation will preclude such investments, it is hoped that the economy will turn around by early to mid 2011. This economic turnaround will be beneficial and at the same time, export markets in the US and Europe will not be same as those that were in the early 2000s because of the changing geopolitical and economic situations. The potential of economic recovery and the opportunities that will arise with the diversification of the commodity textile sector should pave way for the growth of technical textiles sector. In order for this sector to grow, both technical and financial infusions are necessary. Such investments from foreign entities can happen if there is basically goodwill among the parties involved. The stability of India with regard to its democratic system and young population give positive image for India. Coincidently, while I was penning this article, I listened to Fareed Zakaria's GPS Sunday Show in CNN, where Fareed interviewed Mr. Nilekani. In a question, Fareed pointed out about the eight lane infrastructure superiority of China over India. In his reply, Nandan Nilekani asserted the strength of India in terms of english speaking and educated young population over the ageing Chinese society. Additionally, he added that Indias democracy amidst all its pitfalls is a strategic asset for India.