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Explained: the ‘new world order’ and us

With COVID accelerating the adoption of digital technologies, India with its massive domestic market is gearing up to become a hardware hub.

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DQINDIA Online
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Fireside Chat on New World Order

Is India a software powerhouse or a hardware one? Well, doesn’t the answer depend on which decade you are talking about? If it was some decades back, the perception would have leaned more towards hardware areas. That is until, of course, the big software switch happened.

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Som Mittal

The last three-four years have brought more change than ever. What excites me the most is how the common man is using technology today.

— Som Mittal, Former President & Chairman, NASSCOM

Sunil Vachani
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We cannot be world leaders by importing components and exporting products. We need to have a strong component ecosystem.

— Sunil Vachani, CMD, Dixon Technologies

So where exactly are we moving to now?

Som Mittal, Former President and Chairman, NASSCOM, tells you how his journey over the decades has made him witness the transformation of India from a hardware to a software and services industry. When he shares all the ups and downs that the industry has seen in terms of network connectivity, brand perception, infrastructure, and more, you do sit up and listen. “The last three-four years have brought more change than ever. The COVID-19 impact has helped in accelerating innovation. Productivity went up. What excites me the most is how the common man is using technology today. Cloud, which was in so much discussion, would not have seen the kind of adoption it saw in this phase. Now, you do not have to build everything. There is the emergence of hyperscalers as well, which are more than storage and cloud providers. I hope technology would really shine. Even in services, the focus is shifting to customer’s customer.”

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Looks like Pradeep Gupta, Chairman, CyberMedia Group opened a can of butterflies when he asked the panel at DQ Digital Leadership Conclave some very stimulating questions. A lot of ideas and arguments blossomed there. Gupta asked, “What causes these changes and how do we evolve into a new world order?”

The light and the tunnel

When he brought the spotlight on hardware and how China has taken a sort of lead, Sunil Vachani, CMD, Dixon Technologies, explained that digital inequality, which was very profound earlier, has widened in the pandemic. “The growth has been most unequal both in terms of nation and people. What people are going to need now, post the pandemic, are two things – data and devices. This is an opportunity for both the country and the industry. We have seen great demand but at the same time huge component shortages. How can we create a strong and vibrant component ecosystem in the country – we need to address this question. A lot will have to be done. But there are issues and there are solutions.”

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The great thing, despite naysayers, that has happened is the mindset change that India can be strong in hardware as well.

Sameer Garde, President India, and SAARC, Cisco India unlocked the network and communication aspect of this evolution for India. Garde averred with the arguments for digital literacy and the hardware ecosystem. “This country has changed a lot in the last few years. Data usage has gone up tenfold. Users of our SaaS products have also increased in an unprecedented way. We had to manage this in a drastic manner – like changing engines during the flight. We were adding capacity at a massive and rapid pace.”

Sameer Garde
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If we look at some start-ups in India, their growth has been impressive in tier 2 and 3 cities. The digital landscape has become a lot more secular.

— Sameer Garde, President India & SAARC, Cisco India

He, however, challenged the contention that the digital divide has expanded during the pandemic. “I feel that the gap between the haves and have-nots has shrunk. Even if we look at some start-ups in India, their growth has been impressive in tier 2 and 3 cities. The digital landscape has become a lot more secular.”

The have-nots have had it

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There is, clearly, a lot more than India can spruce up and manufacturing is an area on top of this list. Gupta segued into the gap that exists in the manufacturing capability of the country. Here, Vachani appreciated the PLI scheme. “In a lot of categories such as ACs and LEDs, a large part of the domestic demand is being met by the country. We cannot be world leaders by importing components and exporting products. We need to have a strong component ecosystem. Wherever there is a strong fab landscape, the government has played a very important role. In the future, the PLIs should focus on developing this ecosystem.”

Maybe that’s the trickle-down path we need to follow, as Gupta added, from end product capability to the component to chips. Mittal illustrated here how we changed on the car manufacturing front and how the downstream effect has created the very vibrant automotive industry in India.

The great thing, despite naysayers, that has happened is the mindset change that India can be strong in hardware as well.

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The panel further unraveled the core theme of the post-pandemic new normal. It talked about the new world order from the perspective of India’s unique strengths and challenges.

There is a lot that the private sector can do, Vachani weighed in when Gupta asked about the right way and approach the government can take in these directions. “We will have to look at encouraging design in India too.” Mittal echoed Vachani’s hope and assured us that the country has capabilities for the design frontiers that we need to bolster. “Government has played a good role in many areas for the industry. When the trust level is high, the scope is huge. This is the time to build that trust and leverage our own capabilities – for example, STPI.”

Here, Garde illustrated how the pure PPP model is working in the space of the passport model. He added, “Yes, we have challenges in digital literacy and a lot of socio-economic gaps. We need digitisation for helping the country in these areas. With 5G and disruptions in agriculture, as well as collective ownership (government as well as tech companies, start-ups, industry players, etc.), we are at the cusp of massive growth ahead. I am very bullish on the next three to four years.”

As to counting blessings and looking at the sunny side, Vachani said, “We need to create a good environment for companies to set up a manufacturing base in India. We need to have the correct duty structure in place to have the correct basic manufacturing setup. This will make it easy to attract investments. We also need to make smartphones more affordable and put them in the hands of the customers for the Bharat we still need to reach.”

Mittal seconded that by underlining how the SME segment faces a number of constraints in that context. But he also mentioned a strong competitive advantage that India has – low-carbon strength and sustainability.

As Mittal rightly surmised, the best years of the industry are still ahead. Time to get going.

By Pratima Harigunani

pratimah@cybermedia.co.in

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