Every year, when the cold winds of December begin to sweep
through the nation’s capital, the Confederation of Indian Industry holds the
India Economic Summit in collaboration with the World Economic Forum. A
"not to be missed opportunity", you have CEOs and CEO wannabes
hobnobbing with their peers, listening to a large cohort of international
speakers airing their views on the global and Indian economies. This year too,
it proved to be an exciting event, providing a direction for the country and the
IT Industry as well!
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Economic realities and challenges
Union finance minister Yashwant Sinha, in his typical forthright style,
sought to dismiss the prophets of gloom with a confident assertion that only
China and India have been able to show five percent growth in this recessionary
year and that significant progress has been made in clearing the bureaucratic
webs for higher levels of FDI in the future. He also struck a poignant note when
he reminded the Indian CEOs that a concerted effort to record over 7% GDP growth
for the next decade would see a 100 million Indians moving up and out of the
ranks of poverty. This is a significant achievement by any standards and one, as
Sinha reminded, that we could all proudly boast about to our grandchildren.
Speaking in subsequent sessions, both Arun Shourie and Arun Jaitley spoke of the
difficulties faced in implementation even when all sections and factions of the
Government as well as the opposition had approved the budgets and policies.
In sharp contrast, both Professor Jun Gu, a scientist at the Academy of
science in Beijing and Ma QiYuan, Chairman of the Time innovation venture from
China, spoke of the breathtaking speed at which China was implementing investor
friendly policies in every sector of the economy including IT. These policies
have seen China replacing Malaysia, Korea and Taiwan as the epicenter of
electronics manufacturing in Asia and the Chinese IT Industry growing to a
staggering US $ 110 billion. The only area where China lags behind India is in
software exports where our US $ 6 billion plus industry can proudly claim to be
far ahead of their 400 million. But for how long? There is certainly an enormous
opportunity for cooperation between Indian software and Chinese hardware, but it
will require a wise political and business leadership to translate the perceived
threat into a real partnering opportunity.
One reason for the awesome growth of the Infotech sector in China is the
proliferation of communications infrastructure–Over a quarter billion
telephones and 27 million Internet users with extraordinary year on year growth,
while India still dreams the 100 million telephone dream. The contrast was
sharply brought out in a plenary session where India’s Telecom czar Sunil
Mittal of Bharti Televentures raised some very pertinent questions on the urgent
need to open up the telecom sector and give the VSNLs and BSNLs of this country
a run for their money. In the same session, David Lim, the Information and
Communications Minister of Singapore talked about the country state’s
calculated moves in e-Infrastructure, e-Talent, e-Capital-Markets and e-Ideas.
These are a host of farsighted moves to ensure that the country stays at the
leading edge of the new e-transformation that is expected to sweep the corporate
world.
Areas of emerging opportunity
With the world just gaining back its confidence and investment appetite
after the tumultuous 9/11 events, there was guarded optimism among all the
speakers who touched upon the consulting and software opportunities in the new
world. Rajat Gupta, MD of McKinsey and Company Worldwide, spoke about the
resilience of the US Economy and the irrepressible spirit of the Indian diaspora
in the Silicon Valley and across the United States. In fact, a recent Morgan
Stanley survey found that security software is high on the list of investment
areas, with e-commerce, enterprise application integration and ERP still
figuring among the Top Five.
Another absorbing session in the Summit was the one titled Gene Tech: The
next technological wave. This session had a galaxy of visionaries — Manju
Sharma, secretary, Department of Biotechnology, Sharat Chandra, Indian Institute
of Science and Swati Piramal, chief scientific officer of Nicholas Piramal. It
is a matter of pride that Indian companies are now at the bleeding edge of stem
cell research, though one point that each of the speakers made was that biotech
and bioinformatics cannot be the "Get Rich Quick" replacement for the
dotcom era.
And then, there was a word of caution from Sudarshan Sampathkumar of
Accenture. Sampathkumar asked the Indian Government and industry to return to
manufacturing, particularly the labor-intensive variety, which continues to be
the only way for India to generate employment for the teeming millions. The role
of IT in making manufacturing more competitive continues to play second fiddle
to the great exports dream. Fortunately, there are a few new economy individuals
running old economy entities. People like Amit Kalyani of Bharat Forge and
Naushad Forbes of Forbes Marshal are willing to seize this opportunity and show
the way in the very near future. The big opportunity for the Indian economy will
lie in the joining of hands of manufacturing and IT, biology and IT and maybe
even social services and IT, to create value added applications that will
transform not just Indian society and meet Yashwant Sinha’s dream, but also
become a role model for the developing world.
And finally, one tribe that was conspicuous by its absence in this year’s
India Economic Summit was the IT CEO Community. Barring Ashank Desai of Mastek,
Pradeep Kar of Microland and yours truly, only Ashok Soota in his role as Vice
President of CII and Narayan Murthy as one of the co-chairs for the event, were
visible on all the days of the event. Is it a case of recession weariness? Now
that the US customers are stirring to life, maybe the worst is over for the
Indian software sector at least and we will see more optimism in the year to
come.
Ganesh Natrajan The author is deputy
chairman and managing director of Zensar Technologies and the global CEO of Zensar.