JANUARY 18, 2004
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Consumer As Art Patron
Is the consumer a show-me-the-features value seeker? Or is she also an art patron? Maybe it's time to face up to it.


Brand Vitality
Timex, the 'Billennium brand', sells durability no more. Its new get-with-it game is to think ahead of the curve.

More Net Specials
Business Today,  January 4, 2004
 
 
AN IDEAS SUPER POWER
A Dozen Reasons Why India Is A Nation Of Ideas

Yesterday, the West saw India as the land of snake charmers and naked fakirs. Today, it sees us as a happening market and a potential rival. Here's why this perceptual shift was pre-ordained.

A.P.J. ABDUL KALAM
HON. PRESIDENT OF INDIA, Scientist, educationist, musician

The Boffin At The Bhawan
India's President, a scientist himself, is reflection of the nation's aspirations.

Infosys' sprawling bangalore campus, ranbaxy's research facility in Gurgaon, and Rashtrapati Bhawan have come to figure in the itinerary of most heads of state and heads of business who visit India. The present occupant of the Bhawan is the son of a fisherman who rose to be one of the country's most-respected scientists. If a nation is known by its first citizen, then India is, at once, a meritocracy, a hotbed of scientific talent, and a developed nation in spirit.

Since July 25, 2002, when he took up office, Kalam has delivered 230 speeches on subjects as varied as fashion technology, the challenge of development, even the use of nano-technology in brain surgery. The typical speech ends with a series of questions, a sort of try-this-for-size challenge the President tosses out to all takers. Posing questions comes naturally to Kalam the scientist. Once, when he was head of India's Defence Research Development Organisation, he visited a friend who had undergone an angioplasty. He got talking to the surgeon in charge, Dr Som Raju, about stents, metal spirals inserted into the blood vessel. Angioplasties were expensive, explained Raju, because the stents cost Rs 75,000. Kalam got a local defence research lab to collaborate with Raju; the result was the indigenous Kalam-Raju stent, made with the same anti-corrosion technology used in submarines and costing around Rs 5,000.

This background gives the President's call to arms credibility: management guru C.K. Prahalad heard Kalam's call to make India a developed country by 2020 for the first time at a conference in Cochin. His reaction: Nothing like this had happened to India since Mahatma Gandhi's call for Poorna Swaraj. That's because, nothing like A.P.J. Abdul Kalam has, either.

F.C. KOHLI
FORMER DEPUTY CHAIRMAN, TCS, Technocrat, manager, visionary

The Father Of Coders
The founder of TCS engendered India's most global industry, software.

If you are an Indian, goes prevailing logic, you must be a good software engineer. The image of Indian coders going at it in Silicon Valley, the heart of the world's technology industry, has become so ubiquitous that mainstream American media is no longer excited by once-novel disclosures about a canteen at Oracle serving sambhar. Attribute that to one man: Fakir Chand Kohli. In the early 1960s, Kohli, now 77, was a director on the board of Tata Electrical Company, one of the six utilities in the world to be digitised; in the late 1960s, when the Tata Group decided that Tata Consultancy Services (TCS) would focus on technology solutions, he was a natural choice to head it. Kohli was convinced India could exploit the global market for software and for warm bodies familiar with code. The discipline of software engineering wasn't around in those days, so TCS decided to recruit engineers and masters in science in any discipline and train them. By 2000, an estimated 20,000 TCS-trained engineers were working for other companies. Body-shopping gradually gave way to offshoring but as early as 1974 TCS developed a healthcare system for Burroughs out of India. And the body-shopping boom had its positives: how else would the world have learned about Indian it?

N.R. NARAYANA MURTHY
CHAIRMAN, INFOSYS TECHNOLOGIES, Entrepreneur, global manager, mentor

The Compleat Manager
Infosys' Chairman made Indian software, even industry, respectable.

If the world cannot seem to have enough of Nagavara Ramarao Narayana Murthy, it's because he was the very antithesis of the typical (and stereotypical) Indian entrepreneur: austere, willing to share wealth with employees, governance-oriented, and focused on building a global brand and corporation. The result is a company that has, to its credit, a seemingly unending list of firsts: Infosys was the first Indian company to issue stock options, host analyst meets, list on NASDAQ-essentially, the first Indian company to grab Western eyeballs. Murthy lavished money and attention on the company's Bangalore campus; he wanted overseas visitors to take back the message that Infosys was no sweat-shop. And he splurged and hosted customer meets at the best hotels in the US: one year, the setting was New York's famed Waldorf Astoria. Infosys was the immediate beneficiary, but then, the rest of the Indian it industry and, eventually, all of India Inc gained from Murthy's efforts. Not surprisingly, rumours abound about his appointment to public office. The man belongs there.

The Networked Nation
The network and cluster effects make it difficult for the world to ignore India.

ITPL
WHITEFIELD, BANGALORE
102 tech companies, over 50% MNCs

Ideas, and ideators, do not thrive in vacuum. The latter, whether it is individuals or organisations, do well in clusters, such as the software one in Bangalore or pharmaceutical one in Hyderabad.

Most ideas that see the light of day are the result of fertile networks incorporating inventors, companies, venture capitalists, and markets. India has always been a network-oriented culture-"I know someone who knows someone ..."-and it was but a matter of time before someone extended the Rolodex-pumping concept to ideas. Take, for instance, the network of TeNet Group, an incubator founded by Ashok Jhunjhunwala a professor at IIT, Madras. Today, TeNet works with hp, is designing an ultra low-cost automated teller machine for ICICI Bank, and has venture capitalists lining up to fund the companies it starts up. There are more such examples: R. Chidambaram, Principal Scientific Advisor, Government of India has put together a project called Core Group on Automotive R&D that will develop advanced technologies for the automotive industry; participants include several government labs and Indian automotive companies; now, Chidambaram wants to sell the concept to non resident Indians in the auto trade. The network, as Chidambaram knows, is everything.

IIT
KHARAGPUR
Vinod Gupta studied here

India's Best-known School
The US has MIT and Caltech; India, the Indian Institute of Technology.

Whether it is the pioneering algorithms of Narendra Karmarkar, the innovative leadership of Manohar Parrikar, or the countless start-ups in Silicon Valley, they all have their genesis in the innovative brain of an IITian." That's Infosys ceo Nandan Nilekani's tribute to his alma mater (he is from IIT, Bombay). Even before Dilbert creator Scott Adams immortalised the schools-there are now seven of them and if the Government of India has its way, the number could go up to 20-in his strip (the super-intelligent techie Asok is from IIT), the schools were well known in the West. The majority of each graduating batch from the IITs heads West. The achievements of those who have trod this path has directed the world's attention to the IITs. Not content with merely serving as a finishing school for some of the world's best science talent, the IITs have now embarked on collaborative research initiatives with companies-IBM's India Research Center, for instance, has a partnership with IIT, Delhi-and, to use the words of R.K. Misra, Director, IIT, Bombay, "are harnessing ideas for the benefit of the country."

Socialist Baggage
Time was, when the state had to do everything. Thank God.

PROF. V.S. RAMAMURTHY
SECRETARY, DST
Bureucrat and scientist

One man who deserves much of the credit for modern India's scientific and technological prowess-he rarely gets any for it-is the country's first Prime Minister, Jawaharlal Nehru. Self-reliance in science, after all, was one of the main strands of the Nehruvian school of socialism. Even before the country became independent, Nehru invited renowned scientist Shanti Swarup to build the scientific infrastructure of independent India. Swarup, who was the founder of the Council of Scientific and Industrial Research (it was set up in 1942) recommended that the country invest in state-owned national laboratories. In April 1947, four months before India became independent, the National Chemical Laboratory in Pune came into existence. The government established a clutch of others-National Physical Laboratory, Delhi; Central Fuel Research Institute, Dhanbad, and Central Food Technological Research Institute, Mysore included-in 1950. Then, there were entire government departments that Nehru created: among the first, were the departments of science and technology, space, and atomic energy, and he personally oversaw the three. Today, India boasts over 200 national laboratories. That's one reason why India, circa 2004, has world-class capabilities in emerging areas such as molecular biophysics, liquid crystal displays, superconductivity, advanced materials, and atmospheric sciences. Why, it is one of the nine nations that have successfully launched satellites. Much of this technology is now being patented: with 184 patent applications, CSIR was the single largest patent filer under the World Trade Organisation's Patent Cooperation Treaty (it shares the top spot with South Korea's Samsung) in 2002. Better still, India's government labs are increasingly looking to commercialise their IP (Intellectual Property). Textbook socialists may not approve of this development, but the country has come a long way since the 1940s.

RAJAT GUPTA
FORMER MANAGING PARTNER, MCKINSEY & CO
The most-visible of them all

Mindspace From Corner Rooms
Having several Global Indian Chief Executive Officers Helps

It was an eventuality waiting to happen and, finally, in the mid-1990s, it did. Graduates of the Indian Institute of Technology started looking westward in the mid-1970s. Almost two decades later, the US woke up to Indian CEOs. There was Rajat Gupta at McKinsey & Company, the most visible of them all. There were Rakesh Gangwal at US Airways and Rono Dutta at United Airlines. There was Shailesh Mehta at Providian Financial. And there was a clutch of technology entrepreneurs, CEOs, and venture capitalists. The world already knew Indians to be fine scientific minds and sincere workers; the assault of the GICEO helped establish their credentials as great managers. The wave has continued: circa 2004, an Indian being named to the top post in a multinational corporation no longer makes news (except for breathless financial papers). Has this changed the way India is perceived? Suffice it to say that managers look at a country entirely differently when they suspect their next CEO could come from it.

A Billion Reasons Why
A market of a billion keeps companies on their toes.

METROPOLITAN MALL
GURGAON
Third World Or First?

Most multinationals, like GE, came to India to tap its booming (or so they thought) market. The market disappointed them, but they realised that they could leverage the country's resources-talented coders and engineers, say, or plentiful English-speaking call centre agents-to make their global operations more efficient. And so, they stayed back. Circa 2004, however, most multinationals catering to the Indian retail consumer will have to admit that the market is beginning to look attractive again. Attribute that to rising discretionary incomes, an increase in the number of double-income households, and a first-world-like attitude to credit. The market is also wholly Indian; products and communication that worked well elsewhere don't exactly do well here; and companies have to come up with innovations related to cost and usage if they wish to succeed in India. And where better to create ideas for India (or other similar nations) than India?

HUGHES SOFTWARE SYSTEMS
GURGAON
People-shortage? What's that?

Supply-side Dynamics
India has a treasure-trove of techies of all hues.

First, the numbers: India has 270 universities, 10,000 arts and science colleges, and 2,400 engineering and medical schools that produce 2 million graduates every year. As of April 2002 some 8.8 million Indians were enrolled in graduate programmes. IT education in India costs a eighth what it does in the US. Finally, private spending on education in India has grown at a CAGR of 10.38 per cent over the past decade. When people speak about plentiful low-cost English-speaking skilled labour being available in India, chances are they are referring to one of the numbers listed above. These supply-side dynamics alone make it difficult for knowledge-oriented industries anywhere in the world to ignore India. Then, there's the government's prescience in identifying the next big thing. As early as the mid-1980s, the National Biotechnology Board introduced an integrated training programme in biotech. And the industry really took wing in the 2000s. Any guesses on where biotech's biggies will find their workforce?

VERTU
NOKIA'S HIGH-END PHONE
Class, not mass

Western R&D
Cost is all.

Replacement and upgradation, not penetration, are key market drivers in the First World. Ergo, companies focus their efforts on feature enrichment rather than cost reduction. A growing number of Indian innovators and companies have realised this and are in the process of developing (or have already developed) products and solutions that are relevant to the Indian market in terms of cost and reach. Think of it as an Indian model of R&D.

 

 

A GROCER'S
THE HEART OF INDIA
A nation of shopkeepers?

The Second-most Entrepreneurial Nation
It's simple really. Entrepreneurship equals ideas.

The long-suffering British have a joke about Indians. Why don't Indians do well in football, it goes. The punchline: Well, you show them a corner and they put down a shop. Most humour is a reflection of reality and this joke is probably fallout of the growing number of Indian shopkeepers in England, particularly London. However, Indians in India, the consensus went, weren't cut out to be entrepreneurs. Sociologist Max Weber blamed India's caste system for this, arguing that it restricted each caste to its traditional occupation. Inspired by Weber, social psychologist David McClelland said Indians had religious values that didn't promote achievement motivation, the desire to achieve for its own sake. Weber also offered a corollary that stated that Jains and Parsis made good businessmen because they has certain religious values that were the equivalent of the protestant work ethic. That things have changed since the days of Messrs Weber and McClelland is evident in the Global Entrepreneurship Monitor (GEM) a report published in late 2002 by London Business School. This reckons that nearly 18 per cent of India's workforce is engaged in some form of entrepreneurial activity as compared to 2 per cent in Japan and 10.2 per cent in the US (the global average is 7 per cent). Only Thailand ranks higher. Such entrepreneurial activity is most evident in new industries. Infosys was promoted by N.R. Narayana Murthy (he would have been a priest by Weber's calculations) and five others; Dr Reddy's Laboratories and Apollo Hospitals were both promoted by professionals (doctors, actually); and one of India's largest mobile telephony companies was founded by Sunil Mittal, who started off with a bicycle spare parts business in Ludhiana. Better still, armed with defection capital, a growing number of executives are opting for the risky life of an entrepreneur over their 'safe jobs'. Low achievement motivation, indeed.

OFF TO SCHOOL
DELHI
Education is everything

Middle-Class Values
Education and effort lie at the core.

The Indian middle-class believes in the power of education to make a difference. When it began, for instance, the great Indian software revolution was largely built around middle-class engineering graduates from Tamil Nadu and Andhra Pradesh. Today, the most significant expenditure of middle class households, apart from rent and food, is education. And while the Indian middle-class is waking up to the worship of Mammon, intellectual pursuits retain their lure. Given the choice, most parents would prefer that their child graduate from IIT rather than play cricket for the country.

 

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