Invest more in IT: Infosys chief
The Infosys chairman says India's IT spending must catch up with developed nations where it's 2.5-4% of the GDP.india Updated: Aug 18, 2006 18:59 IST
India needs to triple its investment in information technology spending if it has to accelerate its growth, IT bellwether Infosys Chairman and Chief Mentor NR Narayana Murthy has said.
Murthy, who would be retiring on August 20, said, "By all counts, the investment in IT in India, both in private and public sector, is a small fraction of that in developed countries, where the investment can be anywhere between 2.5 and 4 per cent of the gross domestic product (GDP). However, the domestic IT market in India is somewhere around $9 to $10 billion, which worked out to just 1.5 per cent of the GDP."
"We have to triple our investment in it if we want to accelerate our growth," he emphasised.
He said, "Indian companies have to become more and more competitive on a global scale. We must realise the importance of IT in gaining competitive advantage."
Companies should also realise the importance of doing fixed price projects, thereby allocating enough resources from their side. The onus was on the top management of corporations, he added.
Referring to IT exports from the country, he said the country had drawn the attention of the world as a customised software destination. Never before in the history of the country had any industry created such a large workforce as the IT sector had done.
However, the country was still in the nascent stage in software exports when compared to the huge global outsourcing market, he added.
On government spending in IT, Murthy said there was tremendous scope to improve administration through e-governance initiatives.
Complimenting the role of Union and state governments in the growth of IT sector, the IT icon said the focus on higher education, for which the foundation was laid by late Prime Minister Jawaharlal Nehru, and states giving prominence to the growth of engineering colleges in the private sector had played an important role in making available the required talent.
However, the industry had witnessed a major growth only after economic reforms were ushered in during 1991.
Expressing satisfaction over the growth rate of the industry, he said "to register a much faster growth rate, we need better infrastructure and increased availability of talent."
On the future role of governments, Murthy said, "They have to create some world class airports, decent road infrastructure, encourage setting up of five star hotels and enhance talent infrastructure by allowing more engineering colleges and computer science education institutions. A lot more English primary and secondary education institutions also need to be started."
Talking about the growth of Infosys, which just completed its 25th anniversary, he said that between 1982 and 1992, Infosys had grown from a low base of $130,000 to $1.3 mn. However, during the last 14 years, it had grown by 1,500 times.
"Infosys has done pretty well. It had grown 15,000 times in the last 25 years. The market cap, which was $250 in the beginning, has increased to $21 bn.
Murthy said, "Given the fact that we are a nation of a billion people and a large number of students come out of our secondary schools, I believe we can enroll a large number of students into computer science stream and parallelly enhance thoroughly the existing curriculum."
The Infosys experience
About his experience in Infosys, he said, "The journey in Infosys has been enjoyable. There have of course always been several challenges and sacrifices...But coming from a middle class background, sacrifices for me don't mean difficulties as long as I enjoy making these sacrifices worthwhile. Positive and enjoyable, we are all quite happy with the growth.
"At the end of the day we are still small by global standards. This $2.95 billion (the turnover forecast for 2006-07) will put us in the third or fourth position on a global scale."
On his unfinished agenda, Murthy said, "We still need to have more multi-cultural centres and be much better known in the markets we operate. We have to be the best employer, best managed company and have the best corporate governance."
"I don't believe in giving revenue figures or profit figures, I want us to be known as a company with a difference throughout the world, having people from different nationalities, religions, beliefs and gender working together in an environment of intense competition and utmost courtesy and dignity and add value to customers day after day."
On training facilities in Infosys, Murthy said, "In addition to operating our own Global Education Centre, we have also launched a programme called 'Campus Connect' through which we have networked 250 engineering colleges.
"We help the faculty members improve their quality of teaching, revise syllabi and thereby we make sure what is valuable to the industry. We also have instituted 26 scholarships for PhD in computer science in different institutes of higher learning in the country.
We have also created a global internship programme so that we are in touch with universities outside India.