Where the Indus and the Yangtze Rivers Meet
June 26th, 2008I was recently interviewed by a researcher about the rise of China’s Business Process Outsourcing Industry (BPO). At the end of the interview he asked me, “How are China and India similar, beyond the obvious observation that they both have a lot of people?”
My mind became blank.
I honestly didn’t have an answer. Of course, one could attribute it all to the onset of old age and endemic forgetfulness. But this was something different. I didn’t have an answer. I didn’t know if there was an answer. I didn’t know if he was even asking the right question.
I considered, in terms of cultures, neither is similar at all. Of course, in both societies there is a reverence for family bonds that seems quaint in the West. Both countries had invaders administering their countries for a very long time in their recent histories: India had the British Raj (for about 350 years), and China had the Manchus (for about 250 years). Of course, the differences in the two colonial campaigns outweigh any similarities one can manufacture, as well as the ultimate impact. Of course, both societies were happy to see the backs of their invaders when the time finally came.
But in terms of similarities that might somehow result in similar outcomes vis a vis the BPO industry – or even the IT Outsourcing industry – I could think of none. As I’ve written many times before, India’s IT- and BPO industries benefited hugely from the Year 2000 (Y2K) bug fix, the most expensive extermination of ill-conceived programming code in history. China has had no Y2K boom, and so has to limp along under its own power to build up its services outsourcing industries. China, though, does have the largest rationalized consumer base in the world; most of the base may still be poor, but it is rising fast. The Chinese base for B2B services is growing wildly and will likely provide the chamber in which China’s services outsourcing industry will reach a combustion point and ignite on some meaningful level. India’s domestic consumption base for services is still wildly fragmented, with the majority of its GDP still agricultural.
If you, dear reader, can think of similarities between these two great nations that might lead one to conclude their services outsourcing industries will develop in the same way, then please let me know. I hate being speechless.

