As the new Nasscom president, he had filled the very large shoes of Dewang Mehta in 2001. He has exceeded expectations. Under Kiran Karnik, the high-energy startup turned into a corporate institution, an industry body probably unrivaled in India in achievement and influence. He was the Dataquest Person of the Year 2005, and was awarded the Padma Shri in 2007.

As part of the institutionalization of Nasscom, the retirement age for the president was set at 60, and he followed his own rules and stepped down on January 31.

The Dataquest Awards Panel had noted that Karnik led from the front while fighting the outsourcing backlash, giving the software industry a fresh lease of liferelentlessly championing Indias cause in the debate with his hallmark sincerity, candor and conviction. With the same candor, in his last interview as president, Nasscom, Kiran Karnik tells Dataquest about the highs and lows of his six-year stint, the evolution of Nasscom, and the challenges up ahead for the industry.

Unlike Dewang Mehta and now Som Mittal, you came from a background where you had little association with the IT industry before joining the association. What prompted you to take up the job?
Yes, I had almost no association with the IT industry. I did not even know anyone personally, except for some brief interaction with Narayana Murthy when he was doing some research work at IIM and I was a studentbut that was just some acquaintance. When the committee that was looking up for a candidate for the post (of president, Nasscom) approached me, I was not much interested initially.

After leaving Discovery, I wanted to do a little more reading, writing and spending time with my family. I discussed with them (the committee members) some ideas that they could look at, such as associating development with the industry growth, looking at domestic industry growth, and they said: Why dont you come and do it yourself. To that extent, they were open and accommodative and I thought this industry was really looking at things beyond the immediate needs. That made me accept the job.

As the industry is poised for more growth in a much more holistic way, with new sets of challenges, why have you decided to move on?
As I told you earlier, I want to do a little more reading and writing (smiles). No, the actual reason is that I am turning 60. When I came to Nasscom, the initial momentum had been built. Dewang had done a great job. What I wanted to do was a little institutionalization of the association (corporatization as some say). That time we put together some HR rules and one of the things there was a retirement age of 60. So I thought I would retire when I am 60. A few industry leaders did tell me that today hardly anyone retires at 60; even in government departments they are increasing the retirement age. But, I thought if they would like to change the rules, it should be after my retirement!

Also, what I feel is that any organization will benefit if it changes its way of working, implement new ideas every five/six years. Now that can come when a new person comes in. Som comes from this industry. He understands its issues, challenges, and opportunities. While most of the work that we have undertaken will continue, he will bring in his own set of new things that he is passionate about. I think change is good.

Nasscom has taken up tasks from manpower development to security. Most industry associations that we see usually do lobbying and a bit of branding for the industry. Nasscom also began that way. What promoted you to take this new approach?
One thing that I saw in this industry is that its leaders think beyond the here, now and immediatebeyond the QSQT (Quarter Se Quarter Tak). Whether it is issues like WTO negotiationsfew of us knew what were mode 1, mode 2 servicesor development of infrastructure, working with the government to create right law and order and legal framework, this industry has always taken up issues that are important for long-term growth of the industry. I can tell you it is not always only altruistic. It is important for the growth of the industry, and the growth of our economy in the long run.

\Take the development of new townships. We are not directly involved. But, we have interacted with the government to sell them the idea of facilitating creation of new satellite townships around all major locations. And these are coming up as great bases for the industry.

Or, as you said, manpower development. That is the most critical challenge before the industry. And we have taken both short-term and long-term measures to meet those challenges. In the very short term, we have looked at help create finishing schools; in the medium term, we have strengthened industry-academia interactions to prepare students better for the industry; and in the long term, we have worked with the government to conceptualize and set up new institutions such as the IIITs. And when I say we or Nasscom, I am talking about the IT industry.

But, we have gone beyond that too. Understanding that in the very long-term, India, with its huge base of surplus manpower in the working age, can be a global base for human resources, we have looked at strengthening what is the foundation for all this: primary education. For example, we do understand that mathematics education is extremely critical. Mathematics is the basis of computer science. We have created funds and provided funding for initiatives that popularize mathematics education. I personally am very passionate about school education.

Many say Nasscomor the IT industrycould afford to do all this fairly successfully because the large members thought they were not playing a zero sum game against each other. The growth was happening anyway; so there was no need for this bitter fight that we see in some other associations

I will put it the other way. It is because of not fighting over small issues that we have managed to grow this industry. While business is all about competition, forums like this exist to grow the pie and create a conducive environment for companies to grow; remove any stumbling blocks on the way. We do not help individual companies to compete.

Also, growth was not always there. This whole model of offshoring was very much invented by India. It is not that global outsourcing existed and we just got and diverted it to India. No, we invented it; removed all the barriers on the way; and managed to grow it.

At one time, the question before us was: whether to allow non-Indian companies into Nasscom? The industry leaders at that time took the decision to allow them. The motive was not idealistic. It was to grow the pie: that is our driving spirit. Today, IBM has 73,000 people in India; but TCS, Infosys, and Wipro have also grown far bigger. Indian companies are now counted as serious global players. It looks so natural today. But it was not always so.

When you took over, you concentrated on strengthening each of the pillars on which the foundation of the industry is based. What is the challenge before Som Mittal? The rise of the rupee?
No. As we see from the results, that (the rise of the rupee) is manageable by increasing efficiency and hedging currency. A bigger challenge is the withdrawal of STPI. STPI was a very good model that encouraged entrepreneurs. Now, by replacing STPI with SEZs, what we are doing isand I say it publiclywe are helping builders and large companies. As you see, most SEZs have gone to just three states. Today, if an entrepreneur wants to start something, what you are effectively saying to him is buy thirty acres of land, apply for an SEZ, and then we will see. Now, if someone wants to start a business in Bihar, will he come to Haryana and bring five of his friends who would be working with him on a start-up to be in an SEZ?

So what impact will the withdrawal of STPI have on the industry?
Not much in the next two-three years. But, you cannot take that short term a view. It will discourage entrepreneurship. It will be much easier for a bright guy to take up a job in an IBM or an Infosys than try his hand at starting something new. The big growth that we are talking about will not happen that way. You do not always measure what impact a policy change will have on the existing players immediately, but what impact it will have on the growth of the industry in this country. I think that is a far bigger challenge.

As you go, what do you feel most satisfied about and what are the things that you have felt badly about?
Personally, working with this world-class industry is a great satisfaction. But if you are referring to definite things that have happened in these years, I will mention two things. First, the move toward tier-2 and 3 cities and that journey still continues to smaller towns and even villages. And the second is the way we managed to overcome the challenges in 2002-03. The Y2K had got over; we had an economic recession; there was 9/11. And then the campaign against outsourcing that became such a big political issue. We did manage to come out of it and become stronger.

on the negative side?
There is just one thing I can saylast years budget. It took an accountants view of the industry. It seemed to suggest that now that the industry has grown, and so we must extract out of it. May be the government thinks we have arrived. The reality is: we have just begun.

What do you think will happen this year?
I am an eternal optimist. There are many sympathizers of our causes in the government: the commerce ministry, the IT ministry, five/six state chief ministers have also supported us in writing. But, we will have to watch and see.

Going forward, what is the big task for Indian IT?
It is extending its reach. People ask me what are the next destinations for IT. I say the next destination for Indian IT is Bharat: to reach out to all corners of the country. Many have started this. Satyam, particularly, has taken it to rural areas by creating strong processes. And, it is not just altruistic. Raju tells me that in nine months, his attrition was one person in 200 people who left fo doing MBA. It is a win-win situation for all.

Very often, we talk about moving up the value chain. But, as a nation, I think, a better way to look at the whole thing is like a pyramid. We have to grow the pyramid. Yes, we have to make it taller. But we have to widen the base too. This is a country of a billion people.

Ibrahim Ahmad & Shyamanuja Das
ibrahima@cybermedia.co.in

Page(s)   1