Scope for cooperation in IT changing: Karnik (Interview)

NEW DELHI - The scope for cooperation is changing in the IT industry in new markets, according to former NASSCOM chairman and IT heavyweight Kiran Karnik.

“The focus in new markets is on innovation. Big companies will enter into partnerships with smaller companies that have niche expertise in particular areas either at home or abroad,” Karnik told IANS.

“The trend of giants’ partnership with giants is gradually making room for smaller tie-ups based on creativity and innovation,” he said.

Karnik, named one of the seven “Limca People of the Year” by Coca Cola Monday, said: “Eighty percent of the new business will come from the new countries - brick countries like India - and emerging continents.”

He was quoting a 2009 National Association of Software and Services Companies (NASSCOM) report.

The IT wizard has been featured in the Limca Book of Records 2010 for his contribution to the promotion of IT, new media and education.

“The two words that will matter in future are competition and cooperation in business terrains like South Asia that have unexplored geography and huge and growing markets,” Karnik said.

The former NASSCOM chairman said the IT sector “required a better innovation eco-system that allowed companies to think out-of-the box and more ’seed funding’ - capital for ideas at early stages”.

“A friend who sold washing machines in the 1970s said he could not sell his machines in Mumbai because the metropolis had no water. Calcutta had no power; but his machines sold well in rural Punjab because the ‘dhaba owners’ innovated on his machine to make “lassi” - 12 glasses at a time - to meet the growing demand,” Karnik said.

“In the villages, one often comes across a two-wheeler scooter modified to transport six people. How do you take all these innovative ideas together and channelise them?” Karnik said.

He said: “Total eco-system of financing, networking and innovation was moving to the next stage. And the eco-system of innovation must be complimented by a compatible regulation policy.

“We need a regulation policy that encourages entrepreneurs. The government can write off tax for people who are in venture funding (seed funding) and should initiate steps on patenting to ensure that what we invent today is not taken by another country tomorrow,” he said.

Karnik said companies should mull on recruiting chief creativity officers or innovation officers who can spur new ideas and make the most interesting things take place.

“They should also be able to converge the two - ideas and events,” he said.

Referring to the Satyam controversy, Karnik, a former member of the Mahindra Satyam Board, said: “Organisations should draw a policy that will allow someone to speak up when something goes wrong. Companies cannot do without a whistle-blowers’ policy any more. They should even have organisation audits, if possible, to prevent frauds.”

Karnik, who visited IIM-Ahmedabad, his alma mater, recently, said business schools had to restructure their study programmes to cater to the new business environment.

“Globalisation has given rise to new inter-cultural situations in the country. Gender was an important issue. But sensitivity to people’s culture, feelings and gender concerns were not being stressed in Indian management study,” he said.

Most contemporary managers are operating in new markets in developing regions like China and South America, which don’t speak English, Karnik said.

“Hence, knowledge of foreign languages is mandatory. Business schools should offer foreign languages as a study option to facilitate better understanding of global business,” Karnik said.

He said business schools should also evolve “culture study modules” to help students know “alien cultural environments and psyches of culturally sensitive nations”.

“When I go to the US, my American partners literally throw their business cards at me. It is a common practice. But if you throw your business card at a Japanese, he will either walk out or refuse to deal with you.

“You are expected to hand your biz-card in person to a Japanese, take his card in return and read his name aloud to show that you acknowledge. Such education is becoming imperative in modern management studies.”

Before joining NASSCOM in 2001, Karnik helped launch Discovery Channel in South Asia in 1995 and Animal Planet in 1999. He also worked in the Indian Space Research Organisation (ISRO) for 20 years.