A growing ecosystem of early stage funding, incubation and peer learning is creating innovative start-ups building technology solutions...
A growing ecosystem of early stage funding, incubation and peer learning is creating innovative start-ups building technology solutions and products for India and the global market, says BVR Mohan Reddy, chairman, National Association of Software and Services Companies (Nasscom) and founder and executive chairman, Cyient. In order to transform India technologically, Nasscom will actively work with the government for projects like Make in India, Digital India, Smart Cities and Skill Development. He tells BV Mahalakshmi that the IT industry is well placed to align with the objectives of Make in India, as it has the experience of embedded systems and applications software.
What is Nasscom’s perception about net neutrality?
Nasscom proposes a synergistic model for Internet platforms, applications and telecom service providers while strongly advocating net neutrality. Net neutrality creates an open and level-playing field that facilitates innovation, adoption and inclusion. It is important for telecom operators to grow infrastructure to help get inclusive growth within India. However, any stiff regulation restricting access to Internet or Internet platforms and services would be counterproductive and will suppress the growth of Internet-based industries. Net neutrality has become like a democratic right in this digital age. It is of high importance and will give a level-playing field to all the users. It will have a high impact on the ecosystem of the start-ups and innovations. There is a strong need to have clear policies and regulations in this space.
How do you perceive the growth of the IT-BPM industry in terms of revenues and exports?
The IT-BPM industry stands at $132 billion revenue during FY15 which is a growth of 11% compared to FY14 revenue of $119 billion. For FY16, we are expecting a growth of 11-13%. The IT-BPM domestic revenue is expected to grow by 15-17% to about $39.5 billion and the IT-BPM export revenues are expected to be $110-112 billion by growing 12-14%. There is a good potential for growth as we move into the digital age where automation will be at the core of every activity. Few industries driving growth in near future should be aviation, financial services and automotive.
Latest technologies like Internet of Things, Big Data, cloud, and software defined world will bring disruptions and will change the way we live, work and entertain. However, there is a strong role to be played by government, corporates, associations, academia to develop digital infrastructure and ecosystem. The government would need to improve the ease of doing business, stimulate sector economics by tax reforms, promote start-ups, and incentivise service exports.
How do you see the opportunities and demand for entrepreneurship in the country?
Entrepreneurship presents a big hope and potential to a country like India which has more than 50% population below the age of 25. If we want sufficient jobs to be created for everyone, entrepreneurship is the way to go. Industry bodies like Nasscom have understood this well and have initiated the Nasscom 10,000 Start-ups programme to provide the necessary environment, funding, knowledge, mentorship for young minds to innovate and create start-ups. There is a need for at least 50,000 start-ups every year, which could stimulate 5,000 mid-size firms after five years, and 50 large ones after 10 years. This kind of firm creation and growth is a minimal condition for generating 100 million new jobs. A number of incubators have been started by institutions like, IIIT Hyderabad, IITs, ISB, and now government is actively participating. Recently, the Telangana government announced creating an incubator of incubators called T-Hub.
Which are the newer areas of growth for improving the delivery model?
The future looks very interesting as the world will gradually sink into a city with one corner communicating flawlessly with other. In such a world, a product or a service will have a global delivery model, which will have no boundaries. For a single product, there will be a value add done by many countries and regions based on their expertise and economics, and will be delivered across the globe. So, China and India might just manufacture few components of a product, while it might have been designed in Germany, and after market services being provided from Indonesia, the Philippines and marketing and sales happening through US.
Technologies like Industry 4.0 will bring customisation within assembly lines, so now products will be made as per customer’s need and requirements. The supply chain and delivery channels will be highly connected with each other by IoT and technologies like Big Data will help predict the demands for products as well as alert any upcoming maintenance requirements. So, from demand generation to delivery; it will be an all automated and integrated world.
What are your expectations for the industry in near future and what will be your key agenda at Nasscom?
Industries in India have huge growth opportunities ahead of them. The governments have been progressive and the sentiment is positive. Moreover, the sector has also matured over the last two-and-half decades. The industry started with a services-led participation in the global market with cost arbitrage, capacity building, etc. But today the industry is beginning to participate in transformative agendas. Technology disruption being cloud or mobile has aided the industry to move to the next level. With these factors combined, the Indian IT industry is looking at a success story provided we use the opportunities that are available. There has not been any major impact apart from the volatile currency challenges.
The industry has a very strong pipeline which can boost the growth for the coming months. One of my top goals will also be to increase the inclusiveness of the industry body. About 1,600 of our members are small businesses with
R2-5 crores in revenue but there was little participation from them in the councils. We will work on changing this and increase their involvement in the council at various levels.