|
|
|
|
‘‘We are not looking closely at the potential threat that China poses to our competitiveness in the IT field,'' says Anil K. Gupta, 51, visiting professor, Stanford Technology Ventures program and professor of strategy, organisation and international business, University of Maryland. A doctor of business administration from the Harvard Business School and an MBA from the Indian Institute of Management, Ahmedabad, he was one of the speakers at the three-day CII Partnership Summit. Gupta, who has worked actively as a consultant with several large corporations, including IBM, National Semiconductor, Marriott, Monsanto and Norrell Services, took time out during the summit to speak to BT’s E.K. Sharma on some of the issues he was working on, his impressions on the Indian IT scene and about his new book expected to hit the market later this year. Excerpts: Q: What strikes you about the IT scene in India and how do you see the road ahead? A: I hope some of the predictions made by NASSCOM and McKinsey about significant jump in the software exports from India by 2008 come true. However, in my view, it is not going to be an easy ride ahead for India. There are several reasons to believe this. First, the Indian cost structure is rising faster than in the US as the salaries in the Indian IT sector have been increasing quite sharply, perhaps in the range of 15 per cent which is not the case in the US and therefore, we may stand to lose, over time, competitive advantage on account of low cost of manpower. Second, and equally important, is perhaps the fact that we are not looking closely at the threat that China is likely to pose in the IT sector. There is no NASSCOM or any study on this. We seem to have closed our eyes. Take the case of the telecom sector: China is much ahead already on both the wire and wireless segments and it insists on every investor to opt for a joint venture route and on setting up a manufacturing and R&D base in China. So, it is working towards getting leading edge technology transferred to China and this could not just arm it to compete against India but also against the western world.
Q: Doesn’t India enjoy an edge vis-à-vis the language barrier in China? A: It is a hollow comfort factor, as surely China will have at least 1 million good English speaking college students, which will be enough to beat the Indian strength in the IT field. Q: Where do you place the phenomenal growth of the Indian IT sector's growth in the larger economic perspective? A: IT is just one major sector and it will be a huge mistake to assume that the IT boom in India will do anything significant to eradicate the poverty or improve the economic growth of the country. And even if the exports from the Indian IT sector increase to $ 80 billion by 2008, as is being projected, even then it will contribute to less than 20 per cent of the GDP growth needed for the 9 per cent --- economic growth essential for the country. Nearly, 80 per cent of the GDP will still have to come from sectors other than IT. Q: What do you see as the challenges before corporates and the emerging issues in the next few years? A: Some of the things I am working on and feel will engage the companies globally over the next few years are issues like, one, the transformation of the old economy companies because of the power of the internet technologies as this will dramatically change the way companies buy, sell, manage people, knowledge and interact with customers. This process has however only just begun. Even in the US, it is at level 10 on a 0 to 100 scale. The key impediment will be in making a shift in the whole supply chain and to move from a mindset of `build-to-stock' to `build-to-order.' Changing and redesigning the supply chain is a huge challenge and will need to be taken up in steps. The second issue is, what does strategic management mean in a dynamic and increasingly less-productive environment? Historically, strategic management was about smart prediction. However, strategy now is about building capabilities and improvising. The key impediment will be making a shift from a command-and-control approach within the company to thinking of the company as an eco-system where the responsibility for innovation/strategy is distributed throughout and not only restricted to the top management. A good example of this was how Java was developed inside Sun. It was not top down, but developed like a maverick project. The third and final issue which I think is crucial in the future relates to globalisation. How do you build global presence and how do you transform global presence into global competitive advantage? As this involves dealing with the challenges of diversity and costs across countries, companies will increasingly need to work towards converting headaches into a source of advantage and innovating. Say, for instance, in India, where costs matter, honing the facilities to emerge as companies that specialise in cost competitiveness. Similarly, let locations where quality matters emerge as the quality hub of the company. Q: How do you visualise change in the venture capital world? A: The emerging trend is of meta-companies. A meta company is one whose primary business is to build a new company repeatedly. There are three crucial elements in any company. One, the entrepreneurial capital, venture capital (which is money, really) and third and most crucial is the domain capital, which unlike the earlier two, is not scalable and is restricted to those people who possess it. Therefore, for a successful company it is crucial that there is deep domain knowledge. This must be supported by an approach that is frantic about cutting time-to-market and on accelerating product development. Q: What is the focus of your book? A: It is on the quest for global dominance and building the global corporation of tomorrow. It calls for a sharp global mindset as the forerunner to developing global teams and the knowledge engine (global talent base). The thrust is on four essential tasks in which a company must lead its industry in order to emerge and stay as the globally-dominant player. One, executives must ensure that their company leads the industry in identifying market opportunities worldwide and in pursuing these opportunities by establishing the necessary presence in all key markets. Two, executives must work relentlessly to convert global presence into global competitive advantage. Three, executives must cultivate a global mindset and four, executives must constantly strive to reinvent the rules of the global games captured in the answers to three perennial questions: who are our target customers, what value do we want to deliver to these customers and how do we create this value? |
|
Issue Contents Write to us Subscriptions Syndication INDIA TODAY | INDIA TODAY PLUS | COMPUTERS TODAY © Living Media India Ltd |
