business

TopCoder chooses China over India

Bruce Einhorn

Rob Hughes is in a good position to judge the merits of China’s software engineers compared to their counterparts in India. He’s president of TopCoder Inc., the Connecticut company that relies on a global group of freelance programmers to do outsourcing work for customers like Google, America Online and Merrill Lynch, TopCoder divides projects into small bits that it puts on the Internet and invites programmers anywhere in the world to solve. As I report in this new BusinessWeek story about the Chinese software industry, Hughes says that he’s impressed by the quality of software engineers in China, which accounts for over 40% of the total number of programmers taking part in TopCoder competitions. As a whole, China ranks third in TopCoder’s software rankings, behind Poland and Russia - but the two European countries have far fewer programmers taking part in competitions.

And what about India? The country doesn’t come close to China, says Hughes. “The talent is much better coming out of China,” he says. He thinks one reason is that the talent pool in India is getting diluted. Since the software services industry started taking off in India, the number of students becoming engineers has zoomed, Hughes argues. And the quality of India’s engineering base has suffered as a result. “Some people are surprised” that India isn’t a bigger source of talent for TopCoder, “because of the IITs and the strength in India,” he explains. However, “over the last five years there has been such a growth of outsourcing of U.S. companies to India, there has really been a push to get as many people through [the schools], to get them some kind of technical degree.”

China has been pushing hard, too, with the opening of three dozen software colleges, designed to train engineers for jobs in the industry, since 2002. But Hughes remains a big believer in China, where TopCoder is opening its first overseas office. “I think that the talent is much heavier and better coming out of China,” he says. Of course, one reason that it's harder for TopCoder to find engineers in India is that the best ones go to work for one of the companies - Indian or foreign - that has set up shop in Bangalore, Hyderabad or Bombay. China just hasn't had that sort of big wave of investment. But if wages continue to rise in India and top programmers become harder and harder to find, don't be surprised if more companies start following TopCoder to Beijing.

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