Connectivity, digital literacy key for IT boost: Experts

In a panel discussion, Transforming India into an IT Superpower, part of a series called India 3.0 Powered By Technology on CNBC-TV18, Sanket Akerkar, manging director of Microsoft Corporation India, Som Mittal, president of Nasscom, Amar Babu, managing director, Lenovo India, Debjani Ghosh, MD-South Asia Intel and V Balakrishnan, member of the board, Infosys and head- Infosys BPO Finacle explain and throw light on the various problems, probable solutions and hidden strengths of the Indian IT sector.

Below is an edited transcript of the discussion on CNBC-TV18. Q: Cognizant is just reduced guidance and Infosys has reported shrinking margins. Is the curtain coming down on the India IT sector? Mittal: No. Around the world technology is still the centerpiece of all transformation. Corporates are increasingly talking about incorporating mobile, cloud and technological transformation into business models to boost results. So, I think the Indian IT sector is intact. India is the only country that can scale to the levels that the world wants and address the shifts in demographics that are causing the huge shortage of technical resources.
Despite the economic downturn, the IT sector has been able to post double digit growth. So, I think growth will rise and the Indian IT sector's base will become much larger. Q: So there will be relatively smaller rates of growth but good growth in real terms? Mittal: Yes, I would think so and this is across not only the IT sector, but also in the IT BPO sector and engineering services. The IT-products sector is now picking up and that is going to be another other economic driver for the IT industry. Q: Infosys has reported shrinking margins and has reduced guidance. Is Infosys poised for more growth? Balakrishnan: In the larger picture of global spending on technology, India's share is still very small. Globally, most of the developed nations are facing tougher challenges. The economic growth is coming down, that doesn’t mean that the course of Indian IT is over because there are two large trends taking shape in IT spending- efficiency-related spending and innovation-related spending.
Due to the economic downturn, developed nations are increasingly placing a lot of focus on efficiency spending where India has proven excellence and will continue to lead in the future too. In innovation-spending, Indian companies are taking the next step. The Infosys 3.0 programme is an attempt to cater to this trend and plans to create an IT solutions platform which will enable the clients to grow faster and become much more competent in the global marketplace.
So, I think India has potential to make significant contribution in catering to both spending trends. The Indian IT sector has a large pool of talent and is perhaps the only country that can scale up in time to meet global IT requirements. So, I don’t agree with the statement that the growth in India's IT sector is over.
There might be some short-term challenges due to the global economic crises, over the medium- to long-term India has got a significant t role to play in global IT spends. Q: Do you agree that the IT and BPO sectors in India are not innovative? Akerkar: I think the statement is right though India has done a wonderful job in creating and offering efficiencies. However, in the last 12-18 months, there have been some great examples of true innovation not just around product development, but creating non-linear business models. There is also a lot more entrepreneurship, investment and companies are looking at different investments for small startups that are trying to figure out how to take advantage of the various trends triggered by the global economic slowdown. Q: One of the criticisms of the Indian IT sector is the lack of products. Do you agree? Ghosh: I think we need to step back a bit. Worldwide, the IT landscape is changing and that offers tremendous opportunities for the Indian IT sector to redefine its value proposition to the global IT industry. And in the process of redefining the value proposition, Indian IT has to place more focus on domestic adoption of IT. While Indian IT  has done very well in creating and outsourcing services, it lags behind in domestic adoption of IT. If the IT sector can boost domestic adoption of IT and make the population digitally literate, product innovation will come. Q: Why is the rate of digital literacy in India so low? Mittal: Digital literacy can be initiated only on increased and wider IT connectivity which has only begun to take effect only recently.  The government has a very definitive plan of connecting 250,000 panchayats via broadband in the next three years. Only when that happens, will digital literacy start making sense. Q: Why do none of the government's excellent IT initiatives fail to be implemented on the ground? Mittal: The mobile-technology initiative was implemented and is an example of the significant role that government can play in creating infrastructure because optic fibre is not going to be commercially viable in the first few years. But the IT industry has adopted and implemented a programme to provide literacy via fibre-optic. Three villages have been connected as part of the programme. So inclusivity will occur only if the people are digitally literate. Q: What is the kind of infrastructure that the IT industry expects from the government of India? Amar Babu: First and foremost is broadband infrastructure. The world over it has been proved that wherever broadband connectivity has improved it has resulted in higher adoption of IT that has translated into benefits for both the community and the country.
It is so critical that in many countries, broadband connectivity is offered as a utility like water and power. I think that it is important for the government to make it a part of the basic infrastructure it plans to create to boost growth, investment and efficiency for the whole country.
So, the Indian IT sector will have think beyond ITeS, automation or offering a few applications and discuss how it can enable or better the lives of citizens and improve the rate of economic growth in the country.