MUMBAI, India—Indian President Dr. APJ Abdul Kalam called on the Indian IT services industry to out-do its already spectacular success, achieving a size of $200 billion by the year 2010. With $28.4 billion in revenue in 2005, the goal is extremely ambitious. According to a McKinsey study commissioned by Nasscom, healthy growth ought to take the Indian IT industry to $60 billion in annual sales in 2010.
Kalams remarks came at the Nasscom conference here. Although some attendees considered the presidents goals somewhat far-fetched, they welcomed the spirit of optimism and encouragement they embodied. Nasscom is a trade association of Indias IT companies and its members comprise the leaders of the Indian IT industry.
Kalam is a scientist who has been active in the Indian space, missile and nuclear programs. As president of India, he is the highest-ranking government official, placing him above the countrys prime minister in the nations constitutional hierarchy. The position is not a political one, however; the presidents duties are somewhat analogous to those of the English monarch in calling and dissolving parliaments and otherwise acting as head of state.
Indian software and services companies are acutely aware of their status as leaders of the Indian economy. Kalam spoke to this awareness, calling on the IT industry to help bridge the Indian urban-rural digital divide. While Indias poor urban and rural populations—260 million by some estimates—subsist on $1 per day in many cases, Indias IT sector has been bringing wealth into the country at a rate never before seen on the subcontinent.
In another presentation at the conference, M. S. Swaminathan, president of the Swaminathan Research Foundation, described a crisis in rural India among farmers, 40 percent of whom, he said, would like to give up farming. There is also a sharp increase in farmer suicides, he said.
As a concrete measure, Kalam outlined what he called the "World knowledge platform," a broadband, Internet 2-based network connecting India, the Philippines, Singapore and Korea. Calling the network a "knowledge grid," he said it should enable socially beneficial efforts, such as agricultural productivity, water treatment, energy production, drug delivery and genetic science.
Another government initiative designed to spread Indias increasing wealth is the development of 63 "Tier 2"cities. By offering lower costs than Indias big cities, the cities can prove attractive sites for business to locate. He also favors moves to foster the development of the business process outsourcing industry in these cities.
Kalam also called for the production of a cost-effective tablet PC with multilingual capability. Some 18 languages are spoken in different regions of India and although English is spoken in many of those regions, less than 10 percent of the total population is able to speak it. The PC should have wireless Internet access, use open-source software and cost less than $150 to produce. It could be used for tele-education, tele-medicine and entertainment, the president said.
One initiative that is well under way is the creation of so-called village knowledge centers. These centers consist of a PC with basic software and Internet access. Many Indian IT companies have adopted villages and underwritten the cost of the villages knowledge centers. Village knowledge centers have grown from 12 in 1997 to 240,000 in 2007, according to Swaminathan.
"Most of the companies I know are doing something," said Harish Mehta, chairman and managing director of Onward Technologies. Satyam Computer Services has adopted a number of villages, encompassing 850,000 people, said Ramalinga Raju, vice chairman of Nasscom and chairman of Satyam Computer Services. Outsourcing company Cognizant has adopted five villages. In one region, six villages share a WiMax network. "We can change the face of India," he said.
The economic development of India could give Indian IT firms new markets in which to sell. Currently, almost all of their business is outside of India. "There are more benefits to consuming IT than producing IT. Deployment of IT is now possible because of the telecom footprint that has been achieved, said S. Ramadorai, chairman of Nasscom and CEO of Tata Consultancy Services. "Its a need, its a must, we have to wake up," said Ramadorai. TCS has created a computer-based functional literacy program that is used in the knowledge centers.
Viraf Mehta, chief executive of Partners in Change, a non-governmental organization pursuing social change, said that philanthropy is not enough, but that societal improvement should be integrated into a companys business plan. "Activities must be in the corporate interest and must be sustainable," he said. "The poor can be an opportunity."
He went further, calling for Indian companies to step up to the international stage: "No Indian company has exported social responsibility overseas. We will be truly competitive when Indian IT companies can demonstrate global leadership in social and environmental responsibility."
Check out eWEEK.coms for the latest news, views and analysis on outsourcing.