Thiru Dayanidhi Maran's inaugural speech at Nasscom 2007

Thiru Dayanidhi Maran, Hon’ble Union Minister of Communications and Information Technology delivered the following speect at Nasscom’s India Leadership Forum at Hotel Grand Hyatt, Mumbai on 7th February, 2007

Thiru. B. Ramalinga Raju, Chairman, NASSCOM,
Thiru. Laxmi Narayanan, Vice Chairman, NASSCOM,
Thiru. Kiran Karnik, President, NASSCOM,
Distinguished Guests,
Members of the Media,
Ladies and Gentlemen,

It is my pleasure to be here with you today and speaking at a forum that has become a major global conference, drawing participants from across the world.

Each time I have attended the event, it has appeared bigger, with a broader agenda and more to deliberate on, and debate. Clearly, this is a sign of the growing size and stature of the Indian IT-BPO industry, which has become a major talking point within the country and even, drawn attention globally.

As a policy maker and member of the Government, this scenario fills me with a sense of satisfaction and pride. Obviously, both the industry and policy makers are making the right moves and taking the right steps to ensure that our flagship IT-BPO sector maintains its momentum and sustains its leadership in the overseas markets.

A number of forces have come together to make the Indian IT-BPO industry, the spearhead of the country’s global ambitions. A liberal regulatory environment, robust policies, a gradually improving telecom and physical infrastructure and an amazing year-on-year performance by all the players in the market—have resulted in a win-win combination and helped engineer this laudable success story.

Signs of this success, in fact, are everywhere. From the galloping 30 percent plus growth of the IT-BPO industry over the last five years, to the swell of foreign investments flowing into India in IT-BPO, to the rapid proliferation of the PC and Internet population, to the rampant expansion of the mobile segment, to the significant ramp up of activity in the Indian domestic environment—an air of euphoria surrounds the market.

Interestingly, the heady evolution of the IT-BPO industry in India is also having a spillover effect in other areas. Take for instance, the IT hardware market in the country, which has traditionally remained very low key and inactive. The segment seems to have received a tremendous boost, especially with the mobile movement sweeping the country.

There is a buzz now related to India emerging as a hardware hub, a center for semiconductor design and manufacture. The country currently has over 100 chips design houses operating on its shores and the expectation is that the electronics hardware market alone could grow into a US $ 363 billion market by 2015, from US $ 28 billion in 2005. The rapidly proliferating base of mobile phones, has created opportunities in the areas of device and component manufacture and embedded software and applications for all this hardware.

Linked to this electronic revolution is the resurgence being experienced by India’s manufacturing sector. We are seeing activity build up in almost all markets, from telecom to automobiles to IT—where India is now being viewed as an option for outsourced offshore manufacturing.

I may inform you that the Union Cabinet has given, in-principle, approval to the Special Incentive Package prepared by the Department of Information Technology for semiconductor manufacturing and other high tech industries. The parameters of this package are proposed to be announced shortly.

All this positive growth is a result in large part of the industry’s growing focus and orientation towards innovation. Recognizing that leadership in the knowledge society will rest largely on innovative products, services, processes and business models, Indian IT-BPO companies, are gearing up to make creativity a given within their set ups.

As our President, Dr. Abdul Kalam has always said, India has to “innovate to differentiate,” and create an impact in the global markets. This is already happening. We are beginning to see a lot of action around the development of unique and out-of-the-box products. From general purpose operating systems, to embedded operating systems for mission critical applications, to VSLI and engineering design, to RDBMS, to digital security systems, to language independent software—Indian IT companies have gone into overdrive with their innovation efforts.

Looking ahead, the Government, industry and academia have to join hands to develop and market IP that will give us leverage in the US $ 240 billion software products market which is set to boom in the future.

I am glad to see a special event, the NASSCOM Innovation Awards—that will recognize the country’s key innovators—line the conference roster. By championing the innovation cause and recognizing the companies that are pushing creativity to its limits for commercial advancement, the Indian IT-BPO industry is contributing actively to the proliferation of innovation across both large and emerging organizations.

And innovation must be pushed, because it has other ramifications as well. Increasingly, innovation is being harnessed to “integrate” India’s people and obliterate the rural-urban, gender, geographic and digital divides. Inclusive growth—which takes the benefits of IT to all segments of Indian society—is getting inextricably linked with innovation and emerging as a national goal for us.

In order to ensure that growth, through the innovative use of technology, touches ordinary lives and transforms them, the Government, industry and academia have to work closely together. Together they have to identify the innovations that the country needs. They have to work on the policy framework and other catalysts that have to be in place to create the ecosystem of innovation. Finally, they have to ensure that relevant skill sets and manpower resources exist to convert the unique ideas into real products and services.

Innovation will not only enable India to develop a competitive edge in the global markets and fulfill the vision of inclusion, it would also lead to sustainable economic and social development—another major target for the country going forward.

Innovation must become an intrinsic part of the enhanced value proposition that we offer customers in the overseas realms and within our own domestic market. It must drive our IT-BPO industry’s move up the value chain and lend strength to our efforts to build an edge over rival nations.

We have been talking at length about Vision 2020—where we want India to rank among the development countries of the world. To do so, we must ensure that we reach out to the global markets with highly innovative and competitive products and services, that offer an unmatched proposition in terms of quality, cost-effectiveness and just-in-time delivery.

The role of the Indian IT-BPO industry in enabling the country to fulfill its 2020 vision cannot be underestimated. Tomorrow’s economic leaders will be countries that have also donned the mantle of technology leadership. As we move into the knowledge era, it will be the nations with knowledge power that will stay ahead. The 21st century, which is being talked about as the century of the mind, will belong to countries that are leveraging their intellectual and knowledge capital and making it a core competency to create wealth for themselves and the rest of the world.

All these are, of course, our big plans and part of our broad framework for achieving excellence and global success. At the same time, significant challenges stand before us, especially is the area of infrastructure and human resource development. While at the one level, changes are taking place on the telecom front, and many milestones have been crossed in the area of telephony, bandwidth, wireless mobility and the Internet, much more needs to be done.

Making bandwidth available to every Indian has to remain a priority, as it holds the key to bridging the digital divide. Work is already underway in this direction. The fiber infrastructure is prepared up to the block level, last mile wireless technologies are being deployed and the VSAT solutions for the unconnected have been implemented in the form of EDUSAT and other satellite services.

Infrastructure, in terms of better and more airports—particularly in the country’s Tier II and Tier III locations and special Modern Greenfield Integrated Townships, need to become a part of our future roadmap. Already, such hubs are being envisioned by the country’s policy makers. A recent note of recommendations from the PMO suggests that integrated modern townships for sunrise industries such as IT-BPO, are an imperative.

NASSCOM, the Department of Information Technology and the Ministry of Urban Development have been brainstorming on how infrastructure for IT-BPO can be created and expanded in a phased way in Tier II cities of India such as Ahmedabad, Bhubaneshwar, Bhopal, Chandigarh-Mohali, Coimbatore, Dehradun, Jaipur, Kochi, Lucknow-Kanpur, Panaji, Mangalore, Mysore, Nagpur, Thiruvananthpuram, Vishakhapatnam, Agra, Guwahati, Indore, Patna, Siliguri-Jalpaiguri, Shimla and other State capitals and major cities.

The creation of such Integrated Townships will not only take the pressure off the large cities that are unable to cope with growing infrastructure demands for supporting developmental needs, it will also help in decentralizing economic activities and spur the evolution of these cities.

In addition to building support for the export markets, such Townships will also address the growing domestic market. In fact, India’s domestic market opportunity is becoming huge, as IT deployment across industries gets underway, as organizations and individuals become sophisticated users of technology and as Government projects, that take IT to the masses, achieve fruition.

Going forward, it is these issues, related to our burgeoning domestic market, that must occupy our agenda. As President Kalam said at a recent NASSCOM forum, India has a national e-governance plan with twenty seven mission mode projects. State wide area networks are being established to extend data connectivity of 2 Mega bits per second up to the block level in the country. The Government has also approved a scheme, as part of NeGP, to establish 1,00,000 broadband enabled internet Common Services Centres (CSCs) in rural areas of the country to connect the citizens of rural India to the World Wide Web. Computerization of over nearly 13,500 district and subordinate courts have to be completed.

The Government is also taking a fresh look at the technology driven law i.e. Information Technology Act 2000. The Information Technology Amendment Bill was introduced in the Parliament on 15 December 2006 and has been referred to the Parliamentary Standing Committee.

The Government alone cannot achieve these goals over the next two to three years. It has to work in tandem with the IT industry, especially the software sector, which has to develop the applications and solutions that help proliferate the use of technology and make our vision of “IT for all,” a reality.

The Indian software sector must also involve itself in a host of other activities, including the establishment of Village Knowledge Centers, education and healthcare facilities for remote rural areas. Public-private Partnership will be the way to go in the future and together we have to realize our long-term national targets.

Beyond our boundaries, our IT-BPO industry must continue to maintain close relationships with developed countries, which remain major markets for us. We must learn from their achievements and successes and try and improve their global competitiveness, as they have done. At the same time, we must also increase our proximity with emerging IT-BPO markets such as China, the Philippines, Korea and other countries in Eastern Asia and Europe, where the necessary infrastructure is available and the cost of operations is low. Partnering with them for certain entry-level IT-BPO activities will help us service a larger number of customers in a more cost effective way. It will also ensure that Indian IT-BPO organizations begin gravitating towards the high-value end of the services spectrum.

Of course, the matter of relevant, employable manpower also has to be tackled head-on. We simply cannot get complacent about our skill set advantage, which has to be sustained. Our pool of expertise has to be constantly fed and replenished. Already we are talking about a looming demand-supply gap in the area of IT-BPO, with demand far outstripping supply.

In order to create special IT-BPO professionals, not only must we put in place stringent quality norms for selecting and training them, we must also look at some major restructuring at the grassroot level—at primary and secondary education, which needs a relook.

Aligning our education framework to 21st century knowledge needs is the only way we can build a globally relevant workforce—one that will continue to be a differentiator for us in the years ahead.

I would like to sum up by saying that having come so far in our IT-BPO journey, we now need to up the ante. There may be a need for us to revisit our export and domestic market goals and create a case for escalated numbers and higher global market share in the segments where we function. This requires a close and coordinated approach by all the stakeholders to ensure that India makes a bigger global impact in the IT sector.

I am happy to inaugurate the India Leadership Forum and wish it all success.

Thank you.