Europe Calling

He has always set his own goals and braved it out till he attains them. But
the maverick in him has always seen him move on to newer challenges, and newer
goals. After stints at AEC, DD and Discovery, the stage has shifted to Nasscom.
And Kiran Karnik now finds himself facing the toughest challenge of his career–not
only has he to steer Indian IT, he has to steer it in a slowdown

On declining growth…

The events over the past months will definitely have an impact on the Indian
IT industry. Of course, it’s too early to predict the precise effect on the
Indian IT industry. Most Indian companies are still in the evaluation mode and
trying to assess the extent of damage that the incident may have caused to their
clients and to their business. The quarterly performance analysis that Nasscom
will conduct by the end of October 2001 will give us an insight into the gravity
of the situation. In the worst scenario, even if we see a growth of say 25-30%
in place of 40%; it is still phenomenal, and far better than the growth rates in
any other industries. On the brighter side, we also believe that amid this
turmoil, there might be an opportunity for the Indian software and service
industry to assist the US in a speedy recovery. Indian companies could look at
tapping areas such as security-related IT products and services and back-office
outsourcing areas like call centers, insurance claims and medical billing.

On Europe as the new market

Europe is a big market for India due to the shortages of skills across
various segments in Europe. According to an EITO report, Europe is the second
largest ICT market with 29% share after US and is valued at (Euro) 2,012 billion
in 2000. This is expected to grow by 9.6% to Euro 2,205 billion in 2001. Also
Europe stands the risk of having about 3.8 million vacant jobs in IT and
e-business including call centers by 2003. In UK alone there will be a demand
for 3,780,000 software professionals in 2003.

While we are still a long way but numbers indicate Indian companies are
aggressively moving to Europe. Software exports during 2000-01 to Europe
constituted 24% of the total software exports of Rs 28,350 crore and we hope to
increase the share this year. Close to 131 Indian companies already have some
sort of presence in Europe, with Indian software exports to Europe in 2000-01,
fetching revenues of more than $1.5 billion.

On the Europe-IT summit

We have always been highlighting the need to tap new markets in Europe and
the slowdown in the US economy has now brought this need to the forefront. There
is a growing realization of the disadvantage of keeping all the eggs in one
basket. Other countries too are recognizing the India’s IT potential. Nasscom
has been leading Indian delegations to various countries across Europe on an
ongoing basis and has participated in CEBIT, Germany for eight years in
succession. Nasscom has also signed MOUs with its counterpart associations in
European countries for increasing bilateral co-operation. We has also
successfully conducted seminars in various parts of Europe including UK,
Germany, Belgium, France, Italy and Austria, and plan to host more such seminars
and conferences in Europe apart from holding the India-Europe IT Summit in UK.
Nasscom plans to work with the European Union to launch a special SME program
that will identify and match skills in the ICT sector between Indian and
European SME companies.

On disadvantages for Indian companies in Europe

Given their skill and capabilities, Indian companies have the potential to
increase their presence in the large and strong ICT market in Europe. All they
need to do is deepen and broaden the base of existing relationships and gain a
dominant position in existing services. They should, at the same time, work on
expanding their portfolio of services and acquire new generation service
capabilities.

On joining hands with MAIT

As the IT industry is attaining maturity, there is a need for IT associations
to come together and work on common agendas. This is mainly because as IT is
integrating into the business strategy of most corporations and technologies are
converging, there is a need for a common growth path for the entire IT industry.
Nasscom and MAIT are already partnering with CII for a big ICT event in February
2002, and we expect to work closely with MAIT on many issues of common concern.

On the domestic market

India needs to take adequate measures like enhancing its manufacturing base
and providing quality software and hardware at competitive prices. It also needs
to streamline critical issues of standards and international marketing and
overcome infrastructural bottlenecks to become even more competitive. We are
working with the government to initiate policies and measures to encourage IT
adoption and education in the country and increase personal computer
penetration.

Yograj Varma in New Delhi