[Reader-list] Nandan Nilekani: Exporting Indian innovation-143

[Taha Mehmood]

http://www.ciol.com/News/Interviews/Nandan-Nilekani-Exporting-Indian-innovation/9709122087/0/

Nandan Nilekani: Exporting Indian innovation
Nandan Nilekani has been recently inducted into the government by the
Prime Minister of India, Manmohan Singh. To head the Unique
Identification Authority of India, a new agency set up by the
government to issue national biometric identity cards across the
country.

Nilekani is former co-chairman of Infosys. Lately he has been on the
global talk circuit discussing his book, Imagining India: The Idea of
a Renewed Nation, which describes the ideas that guided India's
development and the challenges to cementing India's future as a global
power. He spoke with David Talbot, Technology Review's chief
correspondent, about the use of technology to revitalize Indian
society and the potential for exporting Indian innovation.

The text of the interview appears in the July 2009 issue of the
Technology Review, the first ever English edition of the 109-year old
journal from MIT brought to India by technology publisher CyberMedia.

David Talbot, Technology Review: If you were the Prime Minister of
India, how would you use technology to address growth and solve
problems?

Nandan Nilekani: I think there are many roles for technology,
particularly information technology, in the Indian context. First, we
can use it for better delivery of public services – whether it is
government, health care, education, or whatever. Second, we can use
technology for identifying beneficiaries, especially the poor, so the
correct people get entitlements from government.

There is the whole issue of using technology for land records so that
we can have much smoother land transfers and reduce litigation. You
can use IT for improving national security.

You can use it for tax collection. There is a proposal in India to
implement the goods and services (GST) tax, which can only be
implemented using IT. Throughout government, technology can play a
very big role.

DT: Can India become an important supplier of new technologies,
delivering innovation to the rest of the world?

NN: Already, it is. Many Indian companies have created innovative
business models that are fundamentally disruptive, for example, ICICI
Bank and Bharti, which are now getting exported globally. ICICI Bank
offers services in the UK and Canada and Bharti is seriously looking
at servicing international markets.

DT: What telecom innovations are you referring to?

NN: Telecom companies have been able to create very profitable
operations and at the same time dramatically reduce the price of phone
calls as well as the value of each recharge. They have been able to
create high volume, very low cost, high quality solutions. And as they
go and offer these abroad as a service, they will be competing
aggressively with local providers.

They have managed to come up with ways of sharing infrastructure, for
example, making investments in technology on a variable basis. Instead
of spending a lot of money buying capital equipment, they pay their
technology partners on the basis of the usage of the equipment – the
partners are paid for each minute that is spoken. So they are able to
transfer a capital cost into an operating cost. This has created a
whole new business model that is very elegant and disruptive. And this
came out of necessity – everybody couldn't afford to invest capital in
rural areas.

DT: What about innovations in banking and health care?

NN: ICICI Bank is able to offer banking transactions at much lower
cost than any existing banks. So when they offer their transactions in
a foreign country, they are very competitive on phone banking and
Internet banking, because everything they have done efficiently
leverages technology. In electronic banking and mobile banking, the
number of innovations is very high and can be transferred.

In health care, many of the Indian hospitals, such as Narayana
Hrudayalaya, have come out with the ability to do a high volume of
operations, including heart surgery, at a very reasonable price.

DT: Beyond exporting efficient business models, can India become a
major exporter of new technologies?

NN: Yes, many people are developing products in health care and
communications that could be exported. Some estimates hold that 750
million Indians will own mobile phones in the next few years.

DT: What impact can or might these numbers have on India?

NN: Mobile phones are already having a huge impact in India. When you
look around you see people from all walks of life using them. Ninety
percent of mobile phones in India are prepaid and 40 percent have
recharge of less than 10 rupees. I think this is empowering people in
many ways. It is enabling them to get employment; enabling them to
find prices for things they are selling, so they can get the best
possible prices; enabling them to get information on weather and
farming.

DT: One of the great visions is that phones will allow even the
poorest – or almost the poorest – Indians to secure bank accounts and
loans on fair terms.

NN: Yes, it can provide financial inclusion by giving everybody access
to banking services, to get a loan. It can provide for ways to get
cash transfers from the government to the poor. The mobile phone
applications are limited only by our ability to conceive of things
that can be done. Yet many of the efforts in this direction are still
just pilot projects.

DT: What has to happen to implement them at large scale?

NN: The reason we have so many pilots is that every pilot is being
done by different institutions with different technologies. Very much
like the U.S. health care system today – there is no common way for
hospitals to exchange medical records. Similarly, if you really want
to do financial services on a mass scale, you need standardization of
financial records, standardization of citizen identification, rules
for interoperability of data, and so on. Since those are lacking, you
end up with a lot of fragmented applications but nothing which is
scaled up.

The reasons for such challenges are often not technical – they are
either political or economic. In government departments there is a
normal tendency not to share data. We fundamentally need to get out of
that mindset. Where businesses are involved, there is commercial
interest in not wanting to share the data. Governments have a huge
role to define the sandbox in which you will play. They need to define
the framework with common data formats, interoperability, and formal
technical standards. Within that, of course, businesses can innovate
and develop solutions. The key is aligning multiple stakeholders in
different segments to come together and bring about standards.

DT: Let's talk about Infosys specifically. What challenges need to be
overcome to make Infosys the largest IT services company in the world?

NN: I think Infosys is fundamentally extremely well positioned to
become the trusted partner of choice for business transformation for
companies around the world. We want to keep accelerating change in our
business model because the world is developing fast. We need to offer
software-as-a-service and more platform-based services. One of the
solutions we now offer is procurement.

Instead of just providing the IT for procurement, we tell customers we
will take over the procurement function and share in any savings they
are able to get.

DT: Infosys caught the IT services wave. Is there a new technology
opportunity for the young companies in India today?

NN: The IT services industry is going through a fair amount of
metamorphosis. We are seeing the rise of things such as cloud
computing, software as a service, mobility-based solutions, and
sensor-based transaction tracking where sensors monitor goods and the
movements of things. Indian IT services firms often claim they
have tons of innovative new technology – but that they can't talk
about it very much, because what they build is the property of their
clients.

DT: Could you talk, at least generally, about some of the emerging
technologies Infosys has built for clients?

NN: Many of our applications, especially our newer applications, are
based on mobility – using mobile phones, synchronizing mobile phones.
We are doing a lot with social commerce using the context of social
computing to give businesses far more intimate contact with their
customers.

We are also building an application where we are essentially making
retail stores more intelligent by putting sensors on goods so we can
see what customers are buying. Based on people's choices we can point
out for them, on the mobile phone, special offers in the aisles they
are in at the moment.

DT: Infosys has sometimes suggested that its real value to clients is
in the new business processes they've helped develop. Could you give
us a specific example?

NN: We are working with Alstom, which is a French power company. We
are working with Cisco on things such as order processing, and we've
been able to bring in process transformation there.