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'India can be the services capital of the world'

January 07, 2008 14:45 IST

Dan Gupta, the chairman and chief executive officer of UST Global has been associated with the IT industry for more than 40 years. He was one of those early birds who left India in 1956 to study in the US.

In a candid interview with Contributing Editor Shobha Warrier, Gupta talks about India's capabilities, it shortcomings and what the country should do to regain its leadership position. He also highlighted the changes that have taken place in both the US and India is the past 50 years.

After having studied at the Harvard Business School, he joined IBM and was with the same company for 40 long years. He launched IBM's offshore software development activities in India in 1989, and also reengineered its re-entry into India in 1992. He also held executive positions in the US, Japan, Hong Kong, Singapore, and India.

In 1996, he was part of IBM's executive team in the Internet division. Later, in IBM Global Services, he was responsible for IBM's activities in the $11 trillion global trade services.

Today, he is a member of the honour roll at the Harvard Business School Club of Greater New York. He is also a member of the Economic Club of New York and the Chairman's Circle of U.S. India Business Council.

He joined UST Global as its CEO in 2002.

In this rare interview, he looks at the changes that have taken place in India and the US in the last more than 50 years. 

At Harvard Business School in 1956

Why did you decide to pursue your higher studies in the US?

My ambition was to get into business and I tried to find out the best institution that one could go to. After my Masters at the Delhi School of Economics, I was lucky to get admission to the Harvard Business School. That was in 1956.

How was the atmosphere in the US those days?

Very buoyant. The US was by far the topmost economy at that time.

How open was the American society? Unlike today, very few Indians went to the US at that time.

As far as the US is concerned, from the historical perspective, the acceptability of people from other nations is more. My experience says acceptability is the highest in the US. There was no discrimination even then.

How do you compare the US of the fifties and today?

It has changed enormously. In the fifties, Europe was rebuilding, Japan was rebuilding and Asia-Pacific was far, far behind. But the US was a different country, totally dominating the world economy. The obsession at that time was the Cold War between the Soviet Union and the US.

Today, America, no doubt is a number one economy but it doesn't have the same kind of dominance it had in the 50s.

How did Satyendra Gupta become Dan Gupta?

Those who joined Harvard Business School, in those days, had to soon form a small study group of 5-9 students as there were no lectures and the entire process was driven by the 'case method'. The group discussed the cases at night.

When it was time to introduce ourselves, I said, 'I am Satyendra'. Next day one of my group mates said it was not fair, 'you can pronounce all our names but we can't pronounce your name'. They wanted me to suggest a smaller name that was easy to pronounce. On Day 3, they again cornered me and asked, 'what should we call you'? I said I forgot to think about it.  Then, one of them took out a coin and said, 'if its head, you are Dave and if it's tail, you are Dan'. So, here I am, Dan!

You had no problem?

There is no problem. In fact, it helps. Whatever helps in effective communication is good for both parties! Communication is the prerequisite for progress.

India of the fifties and today

The India you left behind was a nation that just got independence.

The India of the 50s was propelled by the vision of Pandit Nehru. He was truly a visionary. He felt for the poor. With all humility I want to say that I had the opportunity to meet Pandit Nehru several times. He wanted to set up a structure where not just the rich got richer but the poor also benefited. He was committed to excellence. He said we should set up institutions like the Massachusetts Institute of Technology. That was why Indian Institute of Technology, Kharagpur was set up.

As an economist, how do you look at the changes that have happened after liberalisation?

At that time, India had powerful leadership. India of today, no doubt has leaders but that stature of leadership is not there.

In my judgment, India has had three phases. Phase one was lead by Pandit Nehru. Then, we had phase two which was very inward looking. Phase three started from 1991. Liberalisation gave Indian talent and enterprise the opportunity to flourish. The progress the country has made in the past 16 years is quite evident. You see a sea change in the country.

However, when the country is progressing materially, industrially and financially, it should not lose its values and culture.

Do you feel India is losing its values and culture?

I am seriously concerned. We need business leadership but we also need moral leadership. If we have the combination of business and moral leadership, India will get back to the global leadership it had provided for centuries.

Today, I see that the obsession for money is more than the obsession for integrity. Humility, which was the ornament of the country is transforming into a bit of arrogance and pride.

Dan Gupta, Chairman, CEO, UST GlobalYou look at the people who are considered to be successful like J R D Tata. He was a man of impeccable integrity, honesty and character. We need to find similar leaders. You can name a dozen leaders like Nehru, Sardar Patel of that era and today, a country as large as ours need lot more leaders like them. There are some business leaders today but we need more JRDs. 

The criticism is that many are left behind today. Do you feel that way?

No. Take the case of the IT industry. There are thousands and thousands of professionals who are from the poor classes too. Education is the leveller. When more young people get educated, greater will be the dissemination of wealth to the masses.

IT sector in India

How do you describe the IT professionals of India?

They are second to none in terms of hard work, desire to learn, and intelligence. India is looking at a unique opportunity of becoming the services capital of the world.

If you look at the US of the 50s, 56 per cent of global manufacturing was done there. Today, it's down to only 8 per cent. China has become the manufacturing capital of the world.

You mean there is no harm in depending only on services?

Adam Smith said, when two parties trade, both parties benefit. Goods and services should be produced where there is true optimisation of resources. The world has become interdependent. Countries are going to depend on each other. If one country excels in manufacturing, another will excel in services; this is how the global economy is going to flourish.

In the 21st century, global economies will become more and more interdependent. Each country should find out its strength and accordingly focus on that area. Because of the demographic structure of the country, its English language proficiency, and heterogeneity, India's strength lies in services.

Do you feel we have only touched the tip of the iceberg as far as the opportunities available in the services sector is concerned?

I would say what has come to India is nothing! A lot more can come but you have to fulfil certain conditions.

Like? 

Most important is education and training. Supply should be greater than demand. I live in the US. The question that is asked frequently is, will it be able to meet the demand? That is just IT we are talking about. We should produce more doctors, more nurses, more architects, more lawyers, more chartered accountants if we want to bring all those services here.

Education is the first thing we need. Second is infrastructure. The very existence of the IT industry depends on development in communication. The third thing is that services enshrine intellectual property. Nobody is going to give services business to a country where intellectual property is not safe.

In China, that is a major concern. However, India had passed all the laws as far as the IT industry is concerned and it has made a major difference.

The rate of improvement in these three areas has to be faster than the rate of growth that we need in the sector.

At IBM for 40 years.

After studying at Harvard, you joined IBM and continued there for 40 long years. But now youngsters hop jobs at regular interval. Do you see a difference in attitude?

This is again an area of major concern. Today, I see a generation that is looking at money. Short term benefits. I call this myopic vision. They don't have a long-term vision. The most important thing is personal growth and then the opportunity for advancement. Then comes the opportunity to learn. The importance of money should come only at number nine or ten.

Is it a matter of concern?

Yes, for a country as a whole. If one is focussed only on money, somebody will take and use the knowledge and competence the person has. Once it is used, he/she will be discarded like a squeezed lemon. That perspective is not there.

 You brought IBM to India in 1989 when infrastructure was not quite bad….

I set up IBM's software office and we started developing software and exporting it from India. In 1991, the government permitted IBM to set up commercial operations here. The progress between 1989 and 1993 was positive because in 1989, duties and other things were very high. Maintenance could not be provided by IBM. The environment had begun to change in 1989 but today, it is totally different.

After 40 years with IBM, you took up the job of the chairman and CEO of UST Global. What is your vision for the company?

I want to make this the best IT and BPO services company in the world. That is our goal.