Friday, February 17, 2006

Few Lessons for Indian IT

I am talking about President Kalam's speech at NASSCOM.

This is no ordinary politician's speech. Oh yes, I agree, Dr. Kalam is no ordinary president.

He makes a simple proposition, befitting a visionary entrepreneur. NASSCOM-McKINSEY has already come up with a detailed analysis of Indian IT's future projections, and talked about an 'addressable' market size of $300 billion, and a projected revenue of $60 billion in 2010.

While this will still represent a very high level of achievement, Dr. Kalam turned the pitch and started with - "what about making it $200 billion?" and then comes up with a strategy to make it. Yes, a real strategy - not a politician's speech. And that is exactly what is so impressive about it.

The key to his strategy is two fold - one, turn addressable market into achievable market, and two, increase the size of addressable market. Simple, and a set of to-do-s to achieve these goals.

Let's run through his agenda before commenting:

1. Aim with competitiveness - aim high and keep trying;

2. address small and medium ICT industries and encourage consortium approach for IT solution;

3. undertake a major drive in capacity building the graduates with the aim to provide value added IT services;

4. ITeS and BPO in the secondary cities;

5. encourage innovation and creativity among IT personnel thereby increasing ROI for customers;

6. focus on Asia Pacific, ASEAN and African countries;

7. focus on Indian domestic market; India is proposing a 'Pan Africa e-Network' for connecting 53 countries for tele-medicine, tele-education between India and Africa;

8. proposed world knowledge platform will be a launch pad for many innovations and create new markets for partnering nations.

The president also said that India is proposing a 'Knowledge Grid' – initially with India, Singapore, Philippines and Korea, before taking it across the world.

Now, let's look at the key points in this, connected to his twin theme of 'addressable to achievable markets' and 'expanding addressable markets'.

For the first, Dr. Kalam's strategy is to build partnerships with other countries like Singapore, build skills and innovation, move up the value chain, identify and develop new areas of work and build the 'knowledge grid' of cooperation and enterprise.

For the second, and this is where the visionary shows up, is to turn the focus on South East Asia and Africa, allow small and medium enterprises to develop, inner cities to participate and thereby bringing in a huge capacity which can service these markets without competing with 'big capital' and chasing 'higher returns'. [He did not use these words]

I guess this is the real lesson for Indian IT and NASSCOM. The Indian IT, like any maturing industry, is fast losing its entrepreneurial character. As I keep telling to my friends back home, while state governments are opening doors and making it easy for Accentures and IBMs of the world to do business, they have done little to encourage local enterprise or bring inner cities into play. This has two problems : one, India is still the 'low-cost' destination, an advantage too fickle and a distinction not too reputable - India remains vulnerable to Chinese, Indonesian, and even Pakistani or Bangladeshi competition on the costs; and two, this does not create internal competition and innovation needed to push top notch players higher in the value chain [it may mean good returns, but little long term value for Wipro to run Call Centres].

I hope we will take the lesson and get started all over again. It is indeed high time that Indian IT leaders look back at themselves. It is ironic that this time, they will have to take the lesson in entrepreneurship from a 'politician'.


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