Leadership and Indian IT industry

Dr. Bob Hoekstra,

CEO, Philips Innovation Campus

"The opportunity in India is endless, only limited by imagination," says Dr. Bob Hoekstra, CEO, Philips Innovation Campus

By all norms of growth of

Indian industries, the growth achieved by the IT industry is an incredible

success. This is because we still have to get used to real success - Success on

a world scale. We have made a great start. In fact, when looking at my R&D

operation in Bangalore, I would judge it an incredible success. I have never

seen a brand new R&D center come up so fast and so successful. And we are

not alone as many companies did the same. It means we have some incredible

capabilities, but it also means that the ground was fertile. Talent was short in

the developed countries and our customers did not have a choice. Our cost was

low, and immediate economic benefits were realized.

With all of that, we now

have less than two percent market share of the global software market. China has

more, it has 2.5%, mainly because it has such a large domestic market. And I

have over 25% in my company. It shows what is possible.

India should also target 25%

as a reasonable market share. Anything less will leave room for other countries

to grab share. To name one: China.






Leadership has been a key issue for the success
of the IT industry, however small it may still be. A momentum has been created,

which is hard to reverse. And the key? Professionalism - the dedication to serve

demanding customers and the values of the majority of the companies.

Fuelled by local talent as

well as returning talent from abroad, the pace has been unprecedented. And this

will continue. Maybe we will find that the business models need revision. Big is

not necessarily beautiful, and cooperation in the ecosystem may be the way to

go. I am confident that the leadership capabilities, the visionary capabilities

and the professionalism of the major players are such that the industry will

make the adjustments, as necessary.






Over time, the creativity and entrepreneurship
needs to increase. Driven by leading industries (such as mine), and driven by

innovative educational institutes. Educational institutes should again don a

leadership role by reforming themselves into world-class institutes, with top

class, path-breaking faculty. A good model could be private ownership of

institutes, driving for larger scale, entrepreneurship and accepting global

faculty. The USA will retain thought leadership as it is able to attract

world-class faculty from India and the rest of the world. Misplaced

nationalistic attitudes and pride need to be put aside to realize real

progression of India to the world stage. Back office work will come, in some

domains we may be leading, fine, but a role on the central stage? We need to

consider breaking through this barrier as well.




 


General education is another important issue. How
can a country claim leadership in the knowledge economy if large sections of its

population are left behind? It cannot. A key point on the nation's agenda

would be to make sure that there is full participation in education. And

government should take up its role seriously. Many private institutions seem to

be pulling the cart. Maybe an example of a new model? I am not sure as a

fundamental change seems to be required. The amount of NGO activity is great,

but it also points to dis-functional government systems.







This statement on government issues goes deeper.
Economic liberalization has released tremendous energy in the Indian system.

Witness the IT industry, and witness the airline and telecom industries

after those were liberalized. But has the rest of the country been able to

release its powers? Have the rural areas had the impulse and the means to take

charge of their own future? Have the mind powers of people been liberalized and

made available for progression? I see many great things happening at the grass

roots level, such as Self Help Groups, which seem to have an unstoppable

momentum. I see the increasing professionalism of NGO's. But for further

progression, we need to improve the professionalism of the governance system and

its organizations.







This seems to become a real bottleneck for the
country. The slowing of liberalization is a serious concern. The serious

deterioration of many urban areas is shocking. My hometown, Bangalore, is just

one example.  The city just does not seem to be able to deal with the

tremendous wealth creation, and its further potential. There seems to be no

great ambition to move things forward and leverage the tremendous opportunities

to keep the momentum going. Maybe we should learn from the rural areas, and have

self help groups of women ruling the urban areas. It seems to be a fundamental

issue of leadership.







The IT industry has only realized a small part of
its potential, it is probably at only ten or twenty percent. And government is

starting to punish it with medieval taxes, such as Fringe Benefit tax. I see it

as a total cultural misfit between an industry moving ahead and a government

wondering what is happening to them, and responding with distrust.  For

example, travel of knowledge people to the West attracts subsidy in many

countries, as it helps grow the country, in India it is taxed as a frivolous

event.







Any distrust leads unfortunately to friction.
Friction leads to losses and wasted energy. In a country, which scores high on

the list of corruption, it is a serious threat as it also creates gains for

those who cause the friction.







The opportunity in India is endless, only limited
by imagination. The studies of macro-economic trends clearly show India on the

march, having the fundamentals to progress. But in practice, it may be limited

by leadership across the Nation.