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Software success attributed to “compete, but cooperate” mantra

Kiran Karnik

Kiran Karnik  

Priscilla Jebaraj

CHENNAI: One of Kiran Karnik’s favourite memories of his just-completed tenure as the president of India’s apex software body, Nasscom, comes from a meeting with a Chinese competitor.

“I sat down with this senior Chinese official and he had a 10-point list, which they had worked on very carefully,” relates Mr. Karnik. The list evaluated China’s potential for IT success, with the Chinese official insisting that his country could match India on almost every factor, be it talented engineers, an involved diaspora, infrastructure and funding mechanisms, and was even catching up on English skills.

“And then he told me: ‘What we don’t have is a Nasscom.’ That really made me feel good, that we are making an impact…Then he wanted us to help them set up something similar. So they sent two people to come and observe our working,” says a satisfied Mr. Karnik.

If imitation is the best form of flattery, Mr. Karnik and his team have a wide range of admirers. From South Africa to Brazil to Eastern Europe, IT industries have been modelling their industry associations on the Nasscom example.

As he hands over the baton to Hewlett Packard’s Som Mittal this month, Mr. Karnik feels that several other Indian industries would do well to learn from the IT association as well. Speaking to The Hindu at a farewell event organised by Nasscom’s Chennai members, Mr. Karnik attributed much of India’s software success to his association’s mantra of “compete, but cooperate.” The lesson goes beyond IT, he says, pointing to acrimonious competition in other industry sectors, especially in telecom. “The focus should be on growing the pie, not fighting over it,” he says.

The government can play an important role in propelling the growth of that pie to the next level by ensuring a positive policy environment. “It was fine till last year. Then the budget targeted IT industry growth,” he rued, warning that measures such as the fringe benefit tax on employee stock options and the service tax on leased accommodation would have long-term negative impacts on the industry.

However, Mr. Karnik feels he is leaving the industry in good shape, despite worries over a possible U.S. recession, rising rupee and talent shortages. “I am confident we have learned to cope with anything,” he says, pointing to the recession of 2001-02 as a valuable learning experience.

“We weathered that storm and that is the sign of true maturity,” he says.

Speaking to a group of entrepreneurs earlier in the evening, Mr. Karnik said innovation is the key to the future.

“First, we did things cheaper, then better, then quicker, then all three. But that is not enough. Our competitive advantage is decreasing…We have got to move ahead by taking the high ground to innovate,” he said, pointing out that with the twin factors of diversity and adversity, India is a fertile ground for innovation.

Since Mr. Karnik took over the leadership of Nasscom in 2001, the industry has placed itself firmly on the global map, growing almost six-fold over the last six years.

The man who helped coordinate the growth story plans to take a break for at least a month. In the next phase of life, he expects to spend time reading, writing and doing development-related work with NGOs. Any link with IT? He laughs it off: “Only as a dotted line with lots of gaps,” he promises.

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