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Known as "The Bill Gates of Asia," N.R. Narayana Murthy is a founder and now Chairman and Chief Mentor of Infosys Technologies Ltd., a global consulting and IT services company based in India which employs more than 17,000 people worldwide. A billionaire who lives simply in a modest apartment, Murthy frequently speaks out on his belief in the need for corporate social responsibility. India is the fastest growing domestic IT market in the world and is increasingly being used as the "back office" of some of the world's largest companies. Gartner Fellow, Bob Hayward, spoke with Mr. Murthy in Mumbai about India's current and future position in the global IT marketplace. Interview conducted 17 July 2003
Bob Hayward: Mr. Murthy, you have likened India to a family of two children: one gifted and the other less privileged. Would you expand on that? N.R. Narayana Murthy: There are two Indias — urban India where the child is informed about what's happening in the world and rural India, where the child is hapless, undernourished and uneducated. If we want to solve the problem of poverty in this country, then we have to encourage the gifted child to make the whole family better. Then it becomes the responsibility of the privileged to make sure the rural child also gets benefits. That's what the politicians must understand both here and in the world. Hayward: To extend on that, does the government need to be market-driven, or should it be control-driven?
I firmly believe that the role of government will have to be limited to areas that affect citizens: defense, monetary policies, external affairs, internal security. Most areas of economic activity must be left to the citizens. However, in rural areas where the market is not developed, the government should provide subsidy to the rural masses by way vouchers which can be used in the marketplace. That way, there will be no corruption. Citizens will have a choice to go to the best player whether it is primary education or healthcare, and this will bring fairness to the system. Hayward: Which are the technologies and companies in the rich India that can have a beneficial impact on the rural India? Murthy: I won't name any specific company because that is not fair. I think every company, big or small, has a responsibility to make sure that the benefits of IT percolate down to the masses. This could be done by foundation activities or by helping government develop better infrastructure and facilities. We need to create case studies to show how technology can benefit the masses.
Hayward: Why don't we see tangible benefits from the advancements made in IT by India translating into better infrastructure? Murthy: I have often said that while portfolio investments are good, they leverage the power of the Indian entrepreneur. We need that, but more important is foreign direct investment which comes as equity or long-term goals. If you want to let FDI into India in a significant way, our people will have to create visible signs of progress to create confidence in our foreign investors, something that China is doing. Hayward: How important is IT right now in India's development?
We all agree that IT reduces cost and time-to-market and improves productivity. Once that is agreed to, there is no doubt that IT has a very important role to play in nation building. We've seen how IT has contributed significantly to improving productivity in the US from 1.4 percent a couple of decades ago to 2.5 percent now. Now, what should get more priority, IT or other instruments of growth? My view is, let the government not put money into this. Let it, instead, make it very easy for FDI to enter the country. As long as we control and are suspicious of what comes in, as we still are, then it's unlikely we will get what we want. The bottom line is, make it easy for those investments to enter India, in whatever sector there is. Hayward: Why is the issue of whether foreign direct investment is good for India or not still debated here? Why is it still not resolved? Murthy: Actually, there are two hilarious concepts in India. One is called MAFA—"Mistaking Articulation For Accomplishment." The second is that when we say, "All is said and done," what we really mean is, "Everything is said and nothing is done." Like it or not, we are a debating society. But just as other countries like Brazil and China have done, we must say enough is enough, and now is time for action. Otherwise, we will continue to a MAFA society. Hayward: Do you believe in the school of thought that domestic industry is not supported enough and all attention is given to exports? What is your advice to the domestic IT industry in India? Murthy: Every company tries to maximize its profits and revenue. In the G-8 countries, the opportunity for revenue and profits is much higher than in India, so perhaps the top few IT company here may focus primarily on the export market. But it doesn't matter. I say, let somebody else look at the opportunity in India. We don't have to say that we will focus on the domestic market to the exclusion of the export market. Let a thousand flowers bloom. The right approach would be to let all competent people succeed in all markets, domestic or global. Hayward: What can "India, Inc." do to embrace IT, something that has not happened as much as in countries such as China?
I think it is happening in the last ten years. The Indian enterprises and even the government are embracing IT much more warmly than ever before, and the reason is, competition is increasing. There is a focus on productivity and secondly, democracy is demanding more transparency and accountability from the government. Hayward: But the difference is that in India, there has to be a different justification for IT-induced automation that reduces the number of jobs in a country with such a large a population. Murthy: I am of the opinion that every enterprise must operate at the highest level of productivity, which means fewer and fewer people can produce more and more wealth. With better productivity, salaries will increase, workers will have more disposable income that they will spend in the market. In the end, by enhancing productivity, you are actually creating more jobs. It's a myth here that in employing more people and resourcing productivity per worker, we are making the economy better for our citizens. The right way would be to improve productivity. Hayward: Is the contribution of IT in improving the living standard of a large chunk of the Indian people being recognized as it should be? Murthy: In the last couple of years, India has done a very good job in IT. But we are still a nation of one billion people, so a million or so working in IT or related areas doesn't get much notice. That's where we need to create better enthusiasm by creating visible signs of growth such as world-class airports and highways. We owe it to our children because we want them to be much more confident about their country. Hayward: In your interaction with politicians, what do you see are the major challenges in making them aware of the potential of this sector in India? Murthy: Leadership is first of all about courage. Courage to dream big. Courage to take tough decisions. Second, it is the ability to raise the aspirations of people. Third, it is to be open-minded and accepting of great ideas from different countries and cultures across the world. And fourth, like I earlier said, it is to recognize that there are two Indias — rural and urban — and to work toward the growth of both of them. Hayward: What needs to be done to bring out that change? Murthy: Once again, that takes me to what I mentioned earlier — the visible signs of growth. Let me give you an example: When Baby Noor, the two-year-old Pakistani child came to India (for successful open-heart surgery in July 2003), I was happy to see the news splashed across the newspapers. I think we need a few more examples like that. Not only will it change our leaders mindset, it will create confidence in Pakistan. The point is, we need more such signs of growth, like that Nasscom experiment and the fishermen of Pondicherry using data from U.S. satellites to enhance their catch. In every movie theater, if we can show a few of these examples, the common citizen will have confidence in India and will say that India is on the move now. Hayward: I may be a little pessimistic, but there is a negativism and cynicism in the Indian media that if the IT industry is growing, there must be some problem?
You have information I do not, so I can't argue with you. But let me tell you, I was in Delhi and my friend Prannoy Roy (president of NDTV — New Delhi Television — which will soon launch English-language and Hindi news channels in India) took me to his studio. I saw these enthusiastic guys and I was highly impressed. If we use that enthusiasm, we can beat anybody in the world. When a lot of my friends went to IBM, when they set up in India, people said it would be the end for my company. But I said that if I can't fight multinational corporations in India, how can we fight them in their own backyard? These multinationals bring a lot of value to India. With their human resources and other policies, we have to play the game their way. I am very hopeful. Hayward: Recently, politicians and labor representatives in developed economies are proposing "backlash" laws against Indian IT-based services companies meant to limit the use of offshore development and business process outsourcing. What do you think should be the strategy of the IT industry to address that right now? Murthy: Globalization is about producing where it is most cost effective, about sourcing capital from where it is cheapest and about selling it where it is most profitable. We should not be constrained by international backlash. A smart journalist in Australia asked me a question at a press conference: "You guys are taking all our jobs to India. You should be thrown out." I told him that I use an LG refrigerator at home in India. I drink Pepsi and Coke though we have our own Indian drinks. I use a GM car when we have a vibrant automobile industry. I use Cisco routers and a Toshiba tablet PC which are imported. So do you think we should throw all these companies out? I gave him the positive side of all this. Prior to 1991, we all felt exactly the same way as that young journalist. Initially, it was a very painful phase for our Indian companies, but at the end of it, we became stronger. At the end of the day, the consumers benefited the most, and even the minority that suffer in the short run will benefit at the end of the day. Hayward: Where do you see global IT going in the next five years? Murthy: I think IT will focus more on enhancing productivity in the home. So far we've limited ourselves to enhancing productivity in the workplace. Thanks to increasing computing power, I believe IT will move to ubiquitous computing. Hayward: Do you think India will move from using existing technology to inventing new technologies? Murthy: It will happen. Let's remember that the concept of a free market is still new in India. We are not accustomed to leading from the front. We have just 15 years compared to 200 years elsewhere in terms of an industrial revolution. You need to have a little more patience with India, but it will happen. Hayward: There are indications that IT will be a driving force taking India into the league of developed nations by 2020. What's your vision of what India will be like then? Murthy: I have great respect for our president, Abdul Kalam, and his vision of making India a developed nation by 2020 is a great one. My view is, IT alone will not be able to do that. We need world-class manufacturing. We need world-class financial services, healthcare, education, etc. Only then can we make progress and become a great nation. IT alone cannot do that. It will definitely be a driver, a case study of India's potential. Whenever I am down, I remember what the late Robert Kennedy once said, which he borrowed from George Bernard Shaw: "Most people see things as they are and wonder why. I see things that never were and say, why not." Once our leaders start with this mindset, the solution is very simple. We have to see beyond the constraint, using it as an opportunity. It's all in the mind.  |
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