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By Brian Carvalho & Ashutosh Sinha
A. We are at the end of the first stage of internet era, and beginning to look at wireless devices and electronic goods, which will offer a variety of broadband services. There are problems in getting fibre optics into the home. The difficulty is in offering broadband services on wireless networks and providing fixed wireless in cities for corporations. These are serious networking problems. This is where the Indian Institute of Technology (IIT) engineers (electrical and computer science) step in. I think Indians underestimate how rare it is to find people who can understand both software and hardware. The Chinese are good at designing semi-conductors and manufacturing. The Americans are good at designing software. There are niche areas where Indians can succeed.
The tragedy is that when I visit corporate houses in the US, I find Indian CEOs and engineers all over. The question is: why can't these companies be in India? Why can't there be domestic Junipers? Why can't there be native born Sycamores? I do have a few ideas, but India needs to move on to the next stage in its software career. Why do you think software services would not have a long-term advantage? On my first day in India, I read in one of the pink dailies that both Wipro and Infosys---the two best known Indian companies---had decided to outsource their software services to China. That would mean that India is becoming a kind of a middleman. And when a company becomes a middleman, we know what happens to them on the internet. The ground moves beneath their feet? Exactly. You are disintermediated. The point about software services is that you are competing on price, and when you are doing so, there is always someone who can afford to lower their price and offer cheaper services. This is good news for India as it means that India is becoming a developed nation. But India has to move beyond that and try out innovative strategies. That is what countries like Israel and Finland have done. Singapore and Hong Kong once competed on cheap labour, but now they have their own branded companies. India should follow suit. India has not made any progress in developing new technologies. Where are we going wrong? I have two theories on that. One is that
they don't need to. And the second is that if you think the kind of work
that India did as a software centre--it was some thing that no one else
wanted to do, I'm afraid. Yes. It was like India maintaining America's legacy systems. That did not help them become innovative. They worked on languages like Corba and maintained IBM miniframes like AS400. If India did have innovative entrepreneurs, you shipped them out. But on the flip side, companies like Texas Instruments came to India (1985), and the India development centre is an important part of their global strategy, and a lot of their work has been patented. India has a lot of talent. You won't find better engineers anywhere else. They are great entrepreneurs, highly creative, and they excellent solutants of expensive and difficult problems. But when it comes to sales and marketing, Indians lag behind. American look at the market, conduct research, talk to potential customers, and only then do they create a product. Indians tend to accept someone else's definition of the problem. Indians regard the sales and marketing aspect as something you do only after you have a product. Americans conduct their sales and marketing research before they have their product in hand. It is very customer focused. Q. Is biotechnology an option? Yes, biotech is an interesting option for India. One of the things that Indians do well is process data. The second thing is what in the US we call the distributed computing, where you can distribute the processing over many personal computers. It means that Indian biotech companies don't have to rent time on an expensive supercomputer to go and solve biotech issues. Instead, distributed computing can get all the power of a supercomputer and solve the issues themselves. The third reason why biotech might be great for India is that you don't have to get that extraordinary FDA in the US. It takes seven years in the US for companies to get FDA approval and India does not have the same government regulation on drug discovery. So, biotech might be an extremely attractive area for Indians to focus on. Q. How do we approach biotech at a higher level on the value chain so that we don't make the same mistakes that we made in the infotech sector? Biotech companies have very few buyers.
Their buyers are the big pharmaceutical companies. Go to these companies.
Look at the problems that they are trying to solve. Look at the drugs they
are working on, and then identify one thing and focus on it. Don't try and
be someone's information processing company. Developing countries like India should
first invest in their basic infrastructure like education, roads, and
telecom. The Indian government's failure to invest in telecom
infrastructure was a major drawback. Infotech for the masses is India's
challenge. We don't. We lose money online. This year we are hoping to break even. To do so, we had to do make very radical changes. We don't think the online edition can make much money. But certainly every publishing company needs to run an online division. The only way to manage is to fully integrate it. At some stage, the online editions will have to evolve. When I look at Indian sites I find that they are still being run as a basic news feed. Online publishing can help personalise the information and offer a great deal of in-depth research that you can't do in print. I think you have to run them both very differently. You think people will pay for such customised content? People will be willing to pay for premium products such as customised content. The premium content for us would probably be wireless feed, interactive television, interviews with CEOs, or databases of companies. It can be either metric information or original research. I think those kinds of products for publishing companies have a premium value. Is that the direction in which Red Herring is moving? For the website, yes. We have kind of abandoned the site as a pure news site since we don't think people want to use us for that. I think archives can also be a premium product. We will probably start charging for our archives shortly. |
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Q. The internet is now morphing from a
vanilla text information provider to a more interactive medium. What kind
of an internet will people access in a few years from now? 