Need to make India a hub of innovation: Som Mittal

The National Association of Software and Services Companies (Nasscom) has chalked out a five-point agenda to drive the Indian information technology industry for several years.
While going beyond core markets such as the US and Europe for business tops the agenda, Nasscom will continue to project India as a “sustainable and trusted” destination for IT outsourcing among global customers, according to the association President, Mr Som Mittal.

Technology should play a larger role in the country's inclusive growth, he said. The critical issue of talent is not about quality and quantity but about specialisation. “We need to make India a hub of innovation,” he told newspersons of the Hindu group.
“We have gone far beyond labour arbitrage. Cost should be an important criteria. We should never give it up as we have a natural advantage there. But today people do not come only for cost, but for access to talent and time to market,” he said.
Double-digit growth
“Our growth would be 13-15 per cent in dollar terms. This is the first time that big companies' guidance was higher than us,” said Mr Mittal.
The growth rate will largely come from the US and Europe and existing customers and new sectors, he said. IT budgets may not have gone up tremendously but they are focussing on areas such as transformation. In the case of BPOs, the transaction volume is not going up but new businesses are coming. “That's what is keeping the industry moving,” he said.
“We do believe that for us the next 10 years are going to be very defining. Around 80 per cent of new opportunities come from sectors and areas we have not visited and from new geographies.”
A matter of concern
The issue around SEZs is not about tax incentive but Government's view on how to promote the industry.
Taiwan, Korea and China have set up SEZs with a lifespan of around 30 years. In India, the SEZ concept started only in 2006 and clients have hardly occupied the zones when they (the Government) have changed the rules.
“In our view, SEZ is not a profit-based centre because you have the minimum requirement of capital employed, investment to be made and minimum area to be taken,” he said.
Nearly 70 per cent of SEZs are in tier-I towns; 30 per cent of the sanctioned zones are in tier-II and III towns. They have not yet started functioning. “If you stop SEZs now, none of them are going to come up.”
People have huge land to put up integrated townships. “We wanted work to shift to tier-II and III towns but you have put the reverse incentives. Today, 95 per cent of work happens out of the top seven cities and the rest from tier-II and III towns,” he said.
India's monthly export is nearly $16 billion with the IT industry being the highest value-added exporting sector. India has around 55 per cent market share of global outsourcing. “Our assessment is that for the next 10 years we will not be constrained by demand,” he said.
Euro crisis
There is still a bit of uncertainty in the UK. A small percentage of business will be delayed though not cancelled, he said. With 13-15 per cent industry growth, attrition levels have gone up because of “thin and critical bench”.
This year the industry has hired a number of candidates from campuses and these people have to be trained. In three-six months things will ease up because inflow is getting into the mainstream. “We got 100 per cent success in the eighth semester hiring, which happened in December and January.”
“This year the offers made in campuses were about 1.5 lakh and hiring is still on. We will add around 2.5 lakh (net) this year,” he added.