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It is good to know that Mr Arun Jain, the chairman of Polaris who had to go through a harrowing time recently has now been elected Chairman of CII-Tamil Nadu Committee. While this provides a much needed psychological boost after the depressing moments, it is also a time for Mr Jain to emerge as a leader for the entire industrial sector including the non IT sector in this region.
During the last decade of industrial development in India when the country focussed on "Globalization", the Indian manufacturing sector had to take shocks that they were not designed to take. During this period International competition in the Indian markets has increased making the policy of Globalization work only to the advantage of foreign companies wanting to do exploit India rather than Indian Companies harnessing the global markets.
The infrastructure cost of Power and Fuel has gone up, Subsidies have vanished, Bank finance has become more difficult to get and the Capital Markets have ceased to be sources of industrial Capital. All in all, it is a time when Entrepreneurship is no longer a positive virtue.
The worst affected in this man made catastrophe are the "Small and Tiny Sector Industries" which were once thought to be the backbone of the Indian economic structure.
For some time during the Globalization drive, Indian IT industry was able to grow. The growth was however mainly due to the cheap IT manpower that India could provide. After the 9/11 adverse turn around, the IT industries have also been facing a market down trend and have tasted the darker side of industrial management. Many units have closed and almost all Companies had to cut down on their manpower.
Under this background, it is necessary for industrial organizations such as CII to think of the long term interests of the Indian economy and take strategic steps necessary to ensure that fundamental building blocks of the economy are nurtured.
In this direction, I would call upon the CII to focus on the following.
1. Ensure that Entrepreneurial Spirit in the local people does not die.
This requires a framework where SSI s or the SME s (as we love to call them now) can thrive.
The Strategy should cover the grooming of the 75000 Engineering graduates coming out every year from different colleges in Tamil Nadu and turning at least a few of them into successful industrial entrepreneurs.
2. Manufacturing Sector should be nursed.
The importance of the manufacturing industry in creating "Wealth" for the country should not be under estimated. If we continue to think that "Chinese Goods" are "Value for Money" and let the local industries die, we will soon reach a situation that the country will be mortgaged to the commercial interests of the foreign companies and a new East India Company will invade India.
If India has special IT skills, it is time to ensure that these IT skills are focussed to increase productivity in the Indian manufacturing sector so that they become competitive in the days to come.
3. IT Industry has to change its market Focus
In the initial days of the Indian IT industry making inroads to the International markets, it was the right penetration strategy to focus on Y-2K kind of routine manpower intensive development work. The need of the hour now is to increase the share of "Value Added Software Solutions" to be delivered to the International community.
In order to firmly establish itself in the "Value Added Software Solutions Market", Indian IT industry has to focus more on "Branded Products" with IPR. The current trend of looking for contract work to build the IPR of an MNC master should give way to development of " Reusable Components" which can be offered as "plug ins" for customized solutions that the International clients may require.
Perhaps this requires a new marketing strategy for all IT Companies focussed on IPR based products to be branded and sold for assembly into larger products and solutions.
It is through such IPR based products that the Indian IT industry can add long term Virtual wealth to the Country.
I hope that the new CII-TN Committee chairman would give the necessary leadership to make the Tamil Nadu Southern Region a role model within the CII structure in the country. With Karnataka, TN and Andhra in its fold, this region perhaps represents 75 % of the Indian IT industry and seems to have the critical strength necessary to bring about the required policy changes.
Naavi
March 22,2003
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