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5 Ways to Make India Inc Great
Arindam Banerji |
October 23, 2003
Arindam Banerji's strategic plan to make corporate India and the Indian nation forces to reckon with globally. The concluding segment of a three-part series.
Part I: India Inc: What Next?
Part II: Where is India going wrong?
Are there lots of ways to skin this cat? Of course.
But we have to start somewhere and once again, we cannot and must not, try to boil the ocean overnight. So, going back to our long-term national goals and metrics, I propose starting five very specific programmes that move us towards a better India Inc.
1. Theme trips
I'll repeat what I've been saying for a while, now: Suppose, instead of taking visiting senators, reporters and legislators to Kashmir and showing them Pakistan's perfidy, let us:
- Take them to the GE medical R&D lab in Bangalore and invite executive from Bristol Myers Squibb, the global pharmaceutical company.
- Take them to the HP services centre that builds cutting-edge telecommunication software for some of the largest telecommunications companies in the world; invite 3Comm executives.
- Take them to show ISRO (Indian Space Research Organisation), with whom L&T is in pact.
- Walk them through HAL; invite executive from the Boeing.
- Show them once, show them again and when they've seen it all, show it to them again.
Guess what? We've just changed the equation.
These theme trips for decision makers -- legislators, investors, journalists and company executives can be set up quite easily.
Focus should be on showing them India's innovative capabilities, our technology and education infrastructure and, finally, our democracy at work.
Do not take them to Agra -- show them instead the new Taj Mahals -- GE Labs, IIT-Bombay and the Bharat Forge (the largest forging company in Asia and one of the three largest and most technologically advanced commercial forge shops in the world) premises.
Do it repeatedly, for different sets of decision makers, with different themes -- such as one for aerospace and automobile manufacturing; one for healthcare and pharmaceuticals; and so on.
In fact, I've heard from several people that some rudimentary plans for this already exist -- so, we do not even need to start from scratch.
2. Ambassadors for India
Never before have I seen anything as powerful a marketing message for India as when Bill Gates, Jeff Bezos and Craig Barrett spoke at IIT's 50th anniversary in Silicon Valley. The only regret was that the audience primarily consisted of IIT alumni.
Instead, of doing this if we could have invited the same speakers at a confab attended by journalists, legislators, executives and investors -- think about the effect. No, I'm not talking about having Narayana Murthy or Ashok Soota (former CII president and CEO of MindTree) speak here -- but, the users of Indian technology, manpower and innovation.
The impact on me of those speeches was immense -- I can only imagine the effect on Americans, had they heard the same speeches.
Why can't we hold these august meetings once or twice a year in the US and maybe, even in Europe? In short, use our most visible customers as our ambassadors.
Some of these ambassadors have already been doing a fantastic job to combat the political fallout of outsourcing, by telling people the truth about co-operation with India.
For example, everybody and their dog in the US is complaining about lost jobs, and Oracle -- with 6,000 proposed Indian employees -- stands out for punishment on this issue, till you hear from Larry Ellison:
'Oracle landed a major contract, along with Hewlett-Packard Co to create a database for all the medical records and many other governmental functions in a country of about 1 billion people. Not only will the 6,000 in India be working on the database, they'll also be joined by the 9,000 developers at Oracle headquarters in Redwood Shores, California, and at other Oracle work centres in Waltham, Massachusetts, and in countries other than India around the world.'
'In short, the India contract is a tidy bit of new business for all of Oracle's 41,500 employees.'
'We are proud to be a partner in the Indian economy,' Oracle CEO Larry Ellison said this month in New Delhi as he accepted the contract. He's proud that Oracle is in the midst of a lot of economies: The company gets 28 per cent of its $9.5 billion in annual revenue from India, China and other emerging economies and 26 per cent from industrial countries such as Japan and Britain and most of Western Europe; 45 pre cent comes from the United States.' -- Los Angeles Times
Once again, using the right ambassadors is key.
3. Medical tourism
Never in my life, have I seen the kind of gratitude for a professional, as I observed in the eyes of my father's patients. Doesn't matter if you generate millions for me, but it is difficult to beat the sense of gratitude that I would feel for a doctor who saves my child's life.
We're seeing some of this with Baby Noor from Pakistan -- the child who is being treated in Bangalore - even the Pakistanis seem to be melting a little (I hope).
The point is that medical tourism is not only such a heart-tugging, boundary-melting activity, but India is rightly positioned to do this and can be extremely profitable.
Already Indian doctors are increasingly taking on patients from the Middle East, and now even the United Kingdom. Cost is certainly a factor, since as reported in The Times of India: 'While a white filling can cost up to 400 euros in Austria, Rs 500 will do the job in Delhi. A jaw replacement here costs Rs 50,000 as against $5,000 in Israel.'
'According to Dr Anupam Sibal, director, Medical Services Indraprastha Apollo Hospital, the 32 Apollo hospitals have treated 60,000 foreigners from 55 countries in the last five years including celebrities. The numbers are rising. "Understandably. We do a knee replacement for Rs 2 lakh (Rs 200,000), while in the UK the same thing costs Rs 6 to 7 lakh (Rs 600,000-700,000)," says Apollo Orthopaedic surgeon Kulbhushan Attri.'
But, it is by no means the only factor, as
'India has made rapid strides in the field of medicine and surgery in the recent past and has to its credit many achievements, according to Dr Motoi Shoda of Fujita Health University, Aichi, Japan. India also had played a major role in medical research relating to surgical skills and many Japanese doctors were visiting India to exchange and learn about latest developments in surgeries.' -- Hindustan Times
But, in the end, the goodwill earned and the change in image from such medical procedure outsourcing to India is priceless. It changes the image of India: slowly, but surely.
Isn't this already happening you ask?
Absolutely, but it becomes an organised sector when big money from large global insurance companies and major hospital chains begins to flow into this sector.
What is happening today is a trickle -- we need the flood that only the organised sector can bring.
Today, 60,000 offshore patients come to India every year for treatment; we need to turn this into 3 million in a hurry.
4. Bring back the educators
India needs to become an innovator in multiple fields, if it wants to remain a growing economy beyond this current price-driven outsourcing phase.
And believe me, like all other phases, this phase will also end. Most technology companies I know in India have not created or have been unable to create the right culture to build up innovative products (again, exceptions do exist, especially in the pharmaceuticals sector).
The focus for a solution to this has to be our education system. I am one of those that believe that our education system is our greatest strength; it is what is taking us forward.
Our education and the desire of Indians to get the best possible education for their children are what will make a difference in the end. Even the poorest people in our country know this:
'While private expenditure on education has grown a whopping 10.8 times in the past 16 years, for the country's poor, comprising 40 per cent of the population, it has climbed 12.4 times between 1983 and 1999. As a percentage of average expenditure per household, the fraction spent on education rose from 1.23 per cent to 2.82 per cent in absolute terms, while per capita private expenditure on education rose from Rs 1.51 per month to Rs 16.35 per month. Thanks to this, traditionally disadvantaged groups -- the Muslims and the Schedule Caste/Schedule Tribes -- have also seen a sharp spurt in their education levels,' says economist Surjit Bhalla.
So, one specific focus has to be our educational institutions, which typically do a poor job of encouraging innovation.
In the end, if the right people are not in the right positions in these institutions, few changes will happen. Many of us who work in the corporate sector do this all the time; when we see a great technical or executive talent, we immediately try to bring them on board.
Why can't we do the same for India Inc and, on a broader scale, for India? Why can't we do this to bring back some of the great Indian educators who have achieved so much in various universities all over the world?
At this point alone, I personally know several successful professors in the US who are willing to teach in India. I'm sure there are dozens more professors like them in the US and Europe, who are well-known researchers and innovators in their fields.
Their return would bring much needed skills and perspective back to India and may even create the critical mass necessary to create a new generation of innovators for the Indian industry.
But, if we cannot bring people like Krish back because we refuse to do the hard work of figuring out how to pay these people adequately -- we're simply being inane.
Changing the proclivities of our higher education system with the appropriate Indian professors (even if they are foreign trained) is a critical short-term step.
Inventions and improvements do not happen in a vacuum. This is something that we can learn from the US -- they happily import researchers, technology and ideas from anywhere in the world.
No syndrome called 'Not Invented Here.'
By the same token, researchers and educators within India who have done excellent work, need to be rewarded and made examples of. Wouldn't it be great to hear about the guys who invented the fly-by-wire technology for the Tejas without Boeing support, the professor in IIT-Kanpur who made mathematics history recently, educators like Jhunjhunwalla at IIT-Madras?
Furthermore, they should rewarded and encouraged. Creators, inventors and educators at all levels within India must be recognized for their work and effort. Make special categories and bonuses if needed; create the political stink necessary to make it happen, but do it nonetheless.
Yes, this activity can be viewed as a purely political battle, but it has to be done. There's no getting around this kind of matchmaking. If we can do it for our companies, why can't we do it for our education system?
5. Corporate-academia nexus
While India Inc has taken significant strides in becoming competitive, we need the same breath of fresh air to infect our academia.
This will ensure that the next generation of leaders will stand on the shoulders of this generation and not have to reinvent the wheel. Some specific sub-programmes are:
- Refocus risk capital: Most Indian venture capitalists that I have had the opportunity of working with tend to religiously follow the West in their strategies and investments. But Sand Hill Road is not in Gurgaon.
Different metrics should apply to different places, especially when much of Silicon Valley's office space lies empty, while in Gurgaon the building boom is almost out of control.
One primary area of refocus is to start using some of this risk capital to create inexpensive incubators in academic institutions.
This is not a new concept -- many professors with research funding in top-notch schools like MIT (Massachusetts Institute of Technology) and Stanford already use their graduate student laboratories as incubators. Why can't this happen in India?
The results can be startling and the effort is relatively inexpensive -- not only will profitable ventures start coming out of Indian schools, but Indian students and researchers will understand more closely, the importance of commercially relevant innovation -- something that most schools (even in the US) do not teach well and is probably the hardest lesson to learn.
- Managing outsourced innovation: The collaboration between industry and academia today is very weak and in many cases simply does not exist. Yes, counter-examples do exist, but in general, this lack of collaboration is a chasm that has to be bridged.
Corporate investments in R&D should include some research collaborations with universities. This is not charity. Having managed university research for a multinational company, I can say that if done well, university research is fiscally efficient.
In fact, sometimes this kind of research is far more effective than in-house research labs, where company executives often cannot exert adequate pressure to produce results.
Not only do companies start getting trained innovators, but students too no longer think of innovation as some alien activity that can only be learned in America or some such country.
- Tours through schools and colleges: While we Indians worship higher education, our leaders rarely come and speak at our schools and colleges. I do not remember a single invited speaker coming by to talk to us at IIT, but when I came to the US, this sometimes happened twice a week.
I'm sure that things have changed somewhat now -- but, has it changed enough? Do our middle school children get to hear our politicians, industry leaders and successful academics come and speak about their experiences, about India, about their future and so on. Rarely!
Is there the possibility of giving this a political hue? Absolutely, but then the responsibility of the educators is to maintain the appropriate balance. So, get these leaders from all walks of life to come and speak about their experiences.
Further, use media, especially journalists and columnists to consistently point out the gains made by India, Indian successes and technology/business achievements. Repeat as necessary.
The First Baby Steps
So, where do we start? All of the above is fine in principle, but without initial manageable successes, most such activities will fail.
The initial steps, while simple, must ensure that they accentuate India's image as the emerging intellectual capital of the world both inside the country as well as outside.
They must polish and reform the existing image as well as improve the basics, in order to help us move towards the ideal of the intellectual centre of the world.
The baby steps are:
Theme trips: Organise theme trips for US Congressmen and journalists. Indian Americans are already doing some of this and the USINPAC (US India Political Action Committee) can also be very helpful in this. Better theme-based organisation of these trips would be a good place to start.
Medical tourism: Work with a few large venture capitalist firms, private hospitals and insurance agencies in other countries to formalise the medical tourism business. In essence, create some fundable business plans for medical tourism ventures. The goal is to run medical tourism as an organised, growing and advertised business and not an ad hoc facility.
Ambassadors for India: Use the IIT 50th anniversary approach to identify 20 key ambassadors and set up at least three face-to-face jamborees every year to talk about India's achievements and contributions to economies around the world.
Corporate-academia nexus: Work with a set of smaller venture capitalist firms and aggressive Indian and US investors to start small incubators at top Indian engineering schools: IIT-Madras has already used this approach effectively. Small amounts of money to start a few specific high-risk, but commercially viable, efforts would be a good start.
To reduce risks, an open competition for business/research plans from IITs, IISc and some RECs (regional engineering colleges) could be a good starting point.
College, school tours: Contact science/technology journalists, well-respected parliamentarians and a broad set of industry leaders to commit to a set of speaking engagements at schools and colleges.
Help with creating speech material will help increase acceptability.
The starting point purposely does not take any action on some of the more ambitious goals discussed herein. The first steps have to be successful and the remaining will come easy.