Over the last several years, India's information technology (IT) industry has been a main growth driver for the country's economy, with increased exports, innovation, and employment. However, Zoho Founder Sridhar Vembu has a different perspective on the thriving industry, which he claims has "sucked all the oxygen".
In a post on X, Vembu warned against “financial bubbles,” which might drain resources and leave us with fewer capabilities. He stated that the Indian IT industry has long served as a financial bubble, the Mint reports.
To explain his point better, Vembu compared the situation to a flash flood, which can cause significant structural damage.
“Flash floods can destroy existing ponds, leaving less water after the flood recedes,” he wrote on X.
He added that financial bubbles, like flash floods, create large structural damages to the economy.
“When money pours into an industry too rapidly, it sucks resources, and can leave us with fewer capabilities than before, in other critical sectors that get neglected during the flood of money,” he said.
Vembu cited Intel as an example. Taiwan Semiconductor Manufacturing Company (TSMC) allegedly approached Intel about a joint venture. This happened during Intel's financial troubles when the company recently announced its first net loss since 1986.
“There is a reason Intel needs help from TSMC now - for at least a generation now, the smartest talent in Silicon Valley did not go into fabs. No investor would touch that sector because no big exits,” Vembu said.
The longer a financial bubble lasts, the more damaging it is, admitted the Zoho founder.
Vembu added that the Indian IT industry has been “sucking all oxygen”, and the country has to make up for all the time that was “lost”.
“In the Indian context, the IT industry sucked all the oxygen for a long time, leading to impairment and neglect of capabilities in numerous other critical industries. We have to make up for lost time,” he said.
