Forum: India's IT promise waiting to be tapped

India is like the promised land for inexpensive call centers. But this outsourcing outpost holds promise on higher levels of IT. At a recent forum, IT execs discussed how India is a manufacturing and development source just waiting to be tapped.

India, known best in the world of technology as the land of low-cost call centers, is poised to move up in the hierarchy of global economic powers. That is -- if the next generation of South Asian leaders in Silicon Valley and overseas can meet the personal challenges.

That's the consensus of the Indian executives and entrepreneurs, part of a group of about 300, who met last week at the Stanford Graduate School of Business for the inaugural South Asian Economic Forum. The day-long event, spurred by keynote speakers Gururaj "Desh" Deshpande, founder of Sycamore Networks, and author and lecturer Deepak Chopra, explored ways to tap India's potential for global leadership. The forum was sponsored by the School's South Asian Students Association.

"We're strong believers in what India has to offer the world," said Shujaat Khan, managing director of equity investment firm Chrys Capital. With offices in Palo Alto, Calif., and New Delhi, the firm has invested in 13 companies in India since 1999 and saw positive return in the first year. It focuses on institutional and private investments in business outsourcing startups.

Khan spoke on a panel with Vinod K. Dham, co-founder of New Path Ventures, an Indo-U.S. business incubator, and Raj S. Judge, a partner with the law firm of Wilson Sonsini Goodrich & Rosati. All have extensive experience doing business in India, and all believe the region is ready to exploit its strengths on a higher level of economic competition as it expands beyond its well-established service sector into product development and manufacturing.

India's well-educated, English-speaking talent pool gives the region a competitive advantage over China and other Asian competitors, Khan said. "I know China has a way of getting things done," he said. "But when you talk about education and a talent base, that takes much longer to create."

Dham, whose New Path Ventures exclusively funds companies that do their research and development work in India, believes the country must focus on products rather than the service sector in order to truly compete in the global marketplace. The greatest opportunities lie in semiconductor chip development, biotechnology and medical research, he told the audience.

"People are looking at the bottom line and that means cutting expenses," Dham said. "One way to cut R&D expenses is to go to places like India."

Roadblocks

With all that India has to recommend it to budding entrepreneurs, there are still significant obstacles to overcome. Panel moderator Romain Wacziarg, associate professor of economics at Stanford Business School, shared highlights from his latest research, "India in the World Trading System." 

India has a little more than half of China's trade volume, he said, and its GDP growth is much lower. The potential for growth is staggering, according to Wacziarg, but much has to be done to integrate India into the world trading system. He cited burdensome business licensing systems, tariffs, quotas, and so-called "sanitary measures" that keep imports locked up in customs for long periods.

Others talked about the need for improved infrastructure so goods can easily move about the country and the importance of emphasizing marketing and business development.

Leadership and vision at the top is lacking, said Dham, so the increase in market share has to come from the bottom up. That's where the need for South Asian leaders comes in.

Future leaders

With an emphasis on motivating the next generation of South Asian leaders, a lineup of Silicon Valley heavyweights shared their experiences of moving into the ranks of upper management and leadership. In his opening keynote address, computer networking pioneer Deshpande promised the audience members they would see enormous opportunity over the next 10 years. To develop into an innovative leader, he said, you must surround yourself with good people.

"When you graduate from Stanford and are looking for a job, don't worry about bonuses and salary," he said. "Worry about the people you'll work with."

The second panel discussion of the day focused on how South Asians can move into leadership roles. A lineup of Silicon Valley successes shared their stories: Sridar Iyengar, president of The Indus Entrepreneurs Silicon Valley; Lata Krishnan, president of the American India Foundation; Vasant Prabhu, executive vice president and CFO of Safeway Inc.; and Kanwal Rekhi, CEO of Web hosting software company Ensim Corp. All emphasized the need for determination and passion and giving back to the community.

When Rekhi moved to the United States in 1967 to study electrical engineering, there were no mentors or role models for young South Asians. When he told one of his bosses that he wanted to be a manager, he was told he might have trouble managing white people. "When I first got here people thought Indians were beggars and snake charmers," he said.

Rekhi, recognized today as one of the first South Asians to establish himself in Silicon Valley, founded Excelan, a computer networking company that later merged with Novell. He also founded The Indus Entrepreneurs (TiE), a global nonprofit organization that mentors startup businesses. Today South Asians have a positive image in the business world, Rekhi said, and can achieve those leadership roles.

"I don't think it matters who you are or where you're from," said Safeway executive Prabhu in praising American meritocracy. "People will like you for what you can do."

by Donna Hemmila


To read more articles like this one, visit StanfordKnowledgebase, an online source for business news, analysis information and research. E-mail StanfordKnowledgbase directly at StanfordKnowledgebase@gsb.stanford.edu

This article is Copyright © 2003 Stanford University Graduate School of Business.

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