ARTICLE: "Different strokes: China and India are emerging as technology titans, but in different ways," The Economist, 7 October 2006, p. 72.

ARTICLE: "Home and away: India moves in on the West's mortgages," The Economist, 7 October 2006, p. 82.

The article cites a new OECD report that charts the evolution of the global IT industry. Two big changes seen: 1) the top 250 firms includes fewer hardware and manufacturing firms and more software and service companies; and 2) "Asian firms are pushing aside American ones."

Companies from China, India, and Hong Kong appear for the first time, and the Taiwanese number goes up 3 fold from 2000.

As always, the HK and Taiwan numbers are really Big China numbers separated out. In reality, the overlap in business relationships are so strong (the HK and Taiwanese firms really operate mostly out of China) that you can take the total of the three entities as comprising Big China's real number.

China is now the biggest high-tech exporter, even as most of that production is foreign firms borrowing Chinese labor. Still, the Chinese market is now 6th in the world as a buyer of high-tech goods and services. By 2010, only the US and Japan will be ahead of China.

Because services' revenue skyrockets about 50% globally since 2000, so India's reps are Tata, Wipro and Infosys. All that capacity gets translated in new ways for India, which is "poised to benefit from a huge rise in 'mortgage-process outsourcing' in the new few years--worth anything from $100m-150m a year to $3 billion-7 billion."

The key differences in the two titans' approaches?

China outspends India 2.5 to one on technology, already sports the world's biggest cellphone market, and is #2 market for PCs. It also has 3.5X the Internet users (430m compared to 120m). The lead in all these areas is viewed as resulting from China's ability to centrally plan and push a lot of this development pronto.

Another key difference: because China has plenty of high-tech manufacturing capacity, it can make its own, whereas India must import much.

India also has focused on services, which allows private-sector companies an easier time in working around bureaucratic BS.

Looking at the total 250 firms, it's interesting to note that overall employment is down, suggesting that "companies are increasingly outsourcing their operations to smaller, specialist firms--many of them in China, India and Taiwan, as well as in the West--that do not appear in the top 250."

Evidence of this shift in R&D spending (spooky to many in America, inevitable to any economist) is found on page 12 of the same issue. The chart displays the survey result when foreign companies were asked if they were likely to increase R&D spending in China and India and if so, in what sector.

In the auto world, 60 percent said they were investing more in China, and even more said they would in India too.

In IT, it was almost 60% for China and almost 90% for India.

Telecom and financial services hovered at about 30-40% of the companies saying yes for both states.

Interestingly enough, almost 50% of the media companies said they were investing in that industry in both states. Consumer and industrial goods sectors produced similar results.

Yet another data point in the current globalization of R&D, which marks this globalization as being stunningly different from any other era preceeding.