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Interview with Nandan Nilekani, President, Infosys Technologies Ltd, on a more closely integrated Asia
 The World Economic Forum on East Asia is focusing on ‘Creating a New Agenda for Asian Integration’. What are the implications of this integration for your industry?
Closer Asian integration would open a new world of opportunities for businesses, societies and individuals. We would learn more about each other’s cultures, become aware and take advantage of business opportunities among each other. This would be beneficial in lifting the standards of living throughout the whole of Asia.
Specifically, for my industry, integration would enable the generation of more innovations. The information technology industry needs to constantly churn out new ideas, products and services to keep itself relevant as well as to serve its customers. I foresee that if we achieve closer integration and work together, we will develop better products and services. India’s strengths in IT services are complemented by China’s in hardware manufacturing as well as Japan’s long-term innovative technological leadership.
You should also take a long term view of this integration. The fact of the matter is, if you go back to the 1830s, India and China were 50 percent of the world's G.D.P., and then they missed the entire revolution of industry. Japan began to industrialize after the Meiji Restoration to catch up with the West and then rebuilt itself after 1945. When you take such a long-term view of this history, you realize that it's just part of the process. Now, since the 1980s, while China has benefited from its manufacturing revolution, the services revolution of India has been significant in stimulating overall growth.
Given the importance of innovation to your industry, where do you think the future regional hubs of innovation will be?
I think innovation hubs will spring up where open societies flourish with the free flow of thoughts and ideas. India, with its history of democracy and tolerance, is already emerging as a hub for MNCs to set up research establishments. For instance, you can already see that Microsoft, Google and Oracle, among many other companies have set up research labs in India. These hubs will also be enhanced by the vast and young talent pool available in India as well as the burning ambitions of young entrepreneurs to fulfill their ambitions. Thus, I am confident that India has created the ecosystem to emerge as the next hub for innovation.
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"We need to make sure that we set up a conducive environment for commercializing property rights, enact more flexible labor laws and create a robust infrastructure to enable innovation. "
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However, while we are positioned for lift-off as a global hub for innovation, we need to make sure that we set up a more conducive environment for commercializing international property rights, enact more flexible labor laws and create a robust infrastructure to enable innovation.
How much in your view still needs to be done by way of new reforms -- and in what areas – to sustain India’s growth?
India is now firmly placed on the fast trajectory to growth. We, in India, whether in business or government have a huge responsibility to ensure that we don’t let this opportunity pass us by.
To sustain growth, and in fact, propel it further, we need to focus on the following reforms:
- Open up the retail sector to foreign investment as this would significantly drive costs down for consumers. India needs consumption-led growth and increased competition would result in greater efficiencies, which would finally translate into benefits for the consumer.
- Continue spending on infrastructure and make sure that these changes are reflected at the ground level. We need better roads, bridges, ports, airports, power plants etc. Specifically, we need to create a bank of investable projects by opening infrastructure development up for bidding from the private sector. This will increase investments and reduce the risk associated with infrastructure. In this context, the privatization of Delhi and Mumbai airports are steps in the right direction.
- The majority of our population continues to live in rural areas. Hence, the agriculture sector needs continued focus. We need to generate more value-add processes in the rural areas. These include investing in cold chains to prevent early spoilage as well as boost the food processing industry to convert our agricultural products to more value-added items of consumption.
- We need to ensure that today’s rapid urbanization is accompanied by the proper availability of civic infrastructure. This will ease the daily lives of urban dwellers and with renewed focus, we can focus on building world-class cities in India.
- Create a globally competitive financial sector to improve capital allocation and productivity. This measure would go a long way in creating positive ripple effects throughout the economy.
- Streamline laws and taxes to create one single Indian common market. By easing the trade and movement of goods and services between the states, we will encourage more entrepreneurs to actively pursue their goals.
- As the playing field gets leveled further, we need to ensure that our workforce is flexible enough to adapt to the changing needs of the global economy. We need to make our labor laws more flexible so that both employers and employees benefit. Although India has a large pool of human resources, competition has increased globally for jobs and significant investment is required to ensure high quality supply for the knowledge economy. Availability of global talent is emerging as the single most important factor for the long term sustainability of organizations and our inability to create a large pool of trained talent to meet the demand will impede our growth.
- Tourism is another sector that we should focus on, as it creates a positive impact on the world community. The Government should aim at creating tourism circuits and inviting private participation for maintaining and running national monuments.
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