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It is by not fighting over small issues that we have managed to grow this industry so much

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DQI Bureau
New Update

As the new Nasscom president, he had filled the very large shoes of Dewang

Mehta in 2001. He has exceeded expectations. Under Kiran Karnik, the high-energy

startup turned into a corporate institution, an industry body probably

unrivaled in India in achievement and influence. He was the Dataquest Person of

the Year 2005, and was awarded the Padma Shri in 2007.

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As part of the institutionalization of Nasscom, the retirement age for the

president was set at 60, and he followed his own rules and stepped down on

January 31.

The Dataquest Awards Panel had noted that Karnik led from the front while

fighting the outsourcing backlash, giving the software industry a fresh lease of

liferelentlessly championing Indias cause in the debate with his hallmark

sincerity, candor and conviction. With the same candor, in his last interview

as president, Nasscom, Kiran Karnik tells Dataquest about the highs and lows of

his six-year stint, the evolution of Nasscom, and the challenges up ahead for

the industry.

Unlike Dewang Mehta and now Som Mittal, you came from a background where

you had little association with the IT industry before joining the association.

What prompted you to take up the job?




Yes, I had almost no association with the IT industry. I did not even know
anyone personally, except for some brief interaction with Narayana Murthy when

he was doing some research work at IIM and I was a studentbut that was just

some acquaintance. When the committee that was looking up for a candidate for

the post (of president, Nasscom) approached me, I was not much interested

initially.

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After leaving Discovery, I wanted to do a little more reading, writing and

spending time with my family. I discussed with them (the committee members) some

ideas that they could look at, such as associating development with the industry

growth, looking at domestic industry growth, and they said: Why dont you come

and do it yourself. To that extent, they were open and accommodative and I

thought this industry was really looking at things beyond the immediate needs.

That made me accept the job.

As the industry is poised for more growth in a much more holistic way,

with new sets of challenges, why have you decided to move on?



As I told you earlier, I want to do a little more reading and writing

(smiles). No, the actual reason is that I am turning 60. When I came to Nasscom,

the initial momentum had been built. Dewang had done a great job. What I wanted

to do was a little institutionalization of the association (corporatization as

some say). That time we put together some HR rules and one of the things there

was a retirement age of 60. So I thought I would retire when I am 60. A few

industry leaders did tell me that today hardly anyone retires at 60; even in

government departments they are increasing the retirement age. But, I thought if

they would like to change the rules, it should be after my retirement!

Also, what I feel is that any organization will benefit if it changes its way

of working, implement new ideas every five/six years. Now that can come when a

new person comes in. Som comes from this industry. He understands its issues,

challenges, and opportunities. While most of the work that we have undertaken

will continue, he will bring in his own set of new things that he is passionate

about. I think change is good.

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Nasscom has taken up tasks from manpower development to security. Most

industry associations that we see usually do lobbying and a bit of branding for

the industry. Nasscom also began that way. What promoted you to take this new

approach?



One thing that I saw in this industry is that its leaders think beyond the here,
now and immediatebeyond the QSQT (Quarter Se Quarter Tak). Whether it is issues

like WTO negotiationsfew of us knew what were mode 1, mode 2 servicesor

development of infrastructure, working with the government to create right law

and order and legal framework, this industry has always taken up issues that are

important for long-term growth of the industry. I can tell you it is not always

only altruistic. It is important for the growth of the industry, and the growth

of our economy in the long run.

\Take the development of new townships. We are not directly involved. But, we

have interacted with the government to sell them the idea of facilitating

creation of new satellite townships around all major locations. And these are

coming up as great bases for the industry.

Or, as you said, manpower development. That is the most critical challenge

before the industry. And we have taken both short-term and long-term measures to

meet those challenges. In the very short term, we have looked at help create

finishing schools; in the medium term, we have strengthened industry-academia

interactions to prepare students better for the industry; and in the long term,

we have worked with the government to conceptualize and set up new institutions

such as the IIITs. And when I say we or Nasscom, I am talking about the IT

industry.

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But, we have gone beyond that too. Understanding that in the very long-term,

India, with its huge base of surplus manpower in the working age, can be a

global base for human resources, we have looked at strengthening what is the

foundation for all this: primary education. For example, we do understand that

mathematics education is extremely critical. Mathematics is the basis of

computer science. We have created funds and provided funding for initiatives

that popularize mathematics education. I personally am very passionate about

school education.

Many say Nasscomor the IT industrycould afford to do all this fairly

successfully because the large members thought they were not playing a zero sum

game against each other. The growth was happening anyway; so there was no need

for this bitter fight that we see in some other associations

I will put it the other way. It is because of not fighting over small issues

that we have managed to grow this industry. While business is all about

competition, forums like this exist to grow the pie and create a conducive

environment for companies to grow; remove any stumbling blocks on the way. We do

not help individual companies to compete.

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Also, growth was not always there. This whole model of offshoring was very

much invented by India. It is not that global outsourcing existed and we just

got and diverted it to India. No, we invented it; removed all the barriers on

the way; and managed to grow it.

At one time, the question before us was: whether to allow non-Indian

companies into Nasscom? The industry leaders at that time took the decision to

allow them. The motive was not idealistic. It was to grow the pie: that is our

driving spirit. Today, IBM has 73,000 people in India; but TCS, Infosys, and

Wipro have also grown far bigger. Indian companies are now counted as serious

global players. It looks so natural today. But it was not always so.

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When you took over, you concentrated on strengthening each of the pillars on

which the foundation of the industry is based. What is the challenge before Som

Mittal? The rise of the rupee?



No. As we see from the results, that (the rise of the rupee) is manageable by
increasing efficiency and hedging currency. A bigger challenge is the withdrawal

of STPI. STPI was a very good model that encouraged entrepreneurs. Now, by

replacing STPI with SEZs, what we are doing isand I say it publiclywe are

helping builders and large companies. As you see, most SEZs have gone to just

three states. Today, if an entrepreneur wants to start something, what you are

effectively saying to him is buy thirty acres of land, apply for an SEZ, and

then we will see. Now, if someone wants to start a business in Bihar, will he

come to Haryana and bring five of his friends who would be working with him on a

start-up to be in an SEZ?

So what impact will the withdrawal of STPI have on the industry?



Not much in the next two-three years. But, you cannot take that short term a
view. It will discourage entrepreneurship. It will be much easier for a bright

guy to take up a job in an IBM or an Infosys than try his hand at starting

something new. The big growth that we are talking about will not happen that

way. You do not always measure what impact a policy change will have on the

existing players immediately, but what impact it will have on the growth of the

industry in this country. I think that is a far bigger challenge.

As you go, what do you feel most satisfied about and what are the things

that you have felt badly about?




Personally, working with this world-class industry is a great satisfaction. But
if you are referring to definite things that have happened in these years, I

will mention two things. First, the move toward tier-2 and 3 cities and that

journey still continues to smaller towns and even villages. And the second is

the way we managed to overcome the challenges in 2002-03. The Y2K had got over;

we had an economic recession; there was 9/11. And then the campaign against

outsourcing that became such a big political issue. We did manage to come out of

it and become stronger.

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on the negative side?



There is just one thing I can saylast years budget. It took an accountants
view of the industry. It seemed to suggest that now that the industry has grown,

and so we must extract out of it. May be the government thinks we have arrived.

The reality is: we have just begun.

What do you think will happen this year?



I am an eternal optimist. There are many sympathizers of our causes in the
government: the commerce ministry, the IT ministry, five/six state chief

ministers have also supported us in writing. But, we will have to watch and see.

Going forward, what is the big task for Indian IT?



It is extending its reach. People ask me what are the next destinations for IT.
I say the next destination for Indian IT is Bharat: to reach out to all corners

of the country. Many have started this. Satyam, particularly, has taken it to

rural areas by creating strong processes. And, it is not just altruistic. Raju

tells me that in nine months, his attrition was one person in 200 people who

left fo doing MBA. It is a win-win situation for all.

Very often, we talk about moving up the value chain. But, as a nation, I

think, a better way to look at the whole thing is like a pyramid. We have to

grow the pyramid. Yes, we have to make it taller. But we have to widen the base

too. This is a country of a billion people.

Ibrahim Ahmad & Shyamanuja Das



ibrahima@cybermedia.co.in

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