Predictions are a difficult business. More so when you are charting a new territory. I remember a chilly December morning in 1999, when the National Association of Software and Service Companies and global consulting firm McKinsey made a forecast that India’s IT exports will reach $50 billion by 2008 and the domestic market will touch $37 billion. India’s IT exports were then a little short of $4 billion, and no one really kept count of the domestic market. At that time, the forecast was considered “aspirational”. Last week, when Nasscom finally estimated that IT and Business Process Outsourcing (BPO) exports will touch $49.7 billion in the year ending March, there were some cynics asking me if the original forecast included BPO exports or not. The fact is, as I recall, the abbreviation in BPO had not even been quite coined in 1999. It was certainly not in vogue. In fact, when the late Nasscom president Dewang Mehta then spoke of India being a great base for call centres or “IT-enabled services”, few could really envisage what he meant. Many Indians did not know what these things were. The term BPO caught on later. For software giants like Infosys and Wipro, the IT-enabled service business with its low profit margins was something like a lower caste. But then, the bursting of the Internet “dotcom” bubble and the 9/11 attacks in 2000 and 2001 made these companies reluctantly accept BPO-type services. The worst US recession in seven decades has also been a big hiccup for the industry. Last week, Nasscom noted that the 2008-09 figure was at $47.1 billion for IT/BPO exports, while the domestic market had closed then at Rs 59,000 crore ($12.6 billion) and is estimated to close the current year at Rs 66,200 crore. Nasscom and McKinsey have clearly missed the domestic target, but it pays to remember that the US dollar is now weaker compared to the rupee then – despite a whole decade in the middle. If you recall, the report came in the midst of US sanctions against India’s nuclear tests in 1998, which weakened the rupee further!
To me, it is immaterial whether the 1999 predictions took into account BPO or not, or that India missed the 2008 target by a year and a half. In truth, the power of the audacious aim set in 1999 is best appreciated in the way it fired the imagination of a developing country.