Interview: Harish Mehta, author, The Maverick Effect – “Technology is like bottled lightening”

One of India’s earliest tech entrepreneurs talks about the contribution of NASSCOM, the impact of the IT Revolution, and the influence of Jain teaching

What made you write this book?

India’s economy has ballooned in the last few decades, and the seminal role played by the IT industry, which contributes almost 10% of the country’s GDP, has not been properly acknowledged. Noted professionals, industrialists and even bureaucrats have written books but none mentioned its contribution, or the contribution made by NASSCOM in fuelling this growth. Even seasoned economists only credit the economic reforms of 1991, unable to explain how these reforms arrested the downward spiral our economy.

The reforms did help to make the business environment more conducive, and almost all sectors grew – but no other industry matched IT. It was a technology-led revolution, and this success was an outcome of what we did at NASSCOM – some of which were getting the government to understand how IT would transform the world and the opportunities it would give India, working with IT companies to embrace global practices, and building brand India at various levels. It was a structured series of monumental tasks.

Someone had to play the role of the historian and set the record straight!

What has been the social and cultural impact of the IT revolution?

The Indian IT industry employs 5.3 million engineers, and earns foreign exchange of around $160B. In some countries, growth and riches are divided amongst the king’s family or a few large companies. But in an IT company, about 70% of expenses are employee-related. These jobs give a high disposable income which allows employees to expand their imaginations and wings. The second-order effect has been humongous. It’s the IT jobs that gave the real estate sector its biggest boost. Our airports needed to be expanded because of the global reach of our business. Our campuses and infrastructure gave a boost to many businesses.

In the past, to get a job you needed to know someone. In IT, if you get through the standard recruitment test, you get the job. This seeded a meritocratic revolution as India Inc started following our standards.

It’s not just meritocracy we introduced but also a new era of gender equality. Today the IT industry has 37% women employees: almost two million women delivering great outcomes and earning a good income, enjoying freedom at work and freedom at home. Imagine the cultural change as these women bring up their families and inspire the next generation.

Industry players also set world-class standards of corporate governance and transparency standards in financial reporting – these built trust in India Inc and opened the gates for FDI money.

As for my friends who run MSME/SMEs, most lament about the government regulations crippling their growth. The only way to do business was by bending the rules. Subsequent generations who inherited this environment assumed it was the only way. However, the changes around them have encouraged young entrepreneurs and smaller companies to start doing things differently.

Do you have a message for the new generation, the start-up people who are building the unicorns?

I admire this generation – they are fearless, imaginative, and confident. And they have the potential to change India faster than any of us can imagine. Technology is like bottled lightning, and they have the capacity to bring it out and use it to create solutions.

They are also lucky to inherit an environment that can enable them to solve the problems that have been plaguing us as a society!

Of course, I’d like to caution them. I see many young ones chase valuation and not values. They should chase both and never focus on one at the cost of the other.

I also feel that they are too hyper-focussed on their respective businesses. At NASSCOM we saw success differently. Each of us spent 10% of our time working for the ecosystem – contributing to the industry, or to India. I believe this allowed us to deliver a CAGR of 30% over the last 30 years. We knew that if the size of the industry pie grew, our slices would get bigger too, and that’s the way it turned out. When you think like that, your approach to solving problems is markedly different.

People in today’s start-up space have to understand that building trust with competitors, as well as among stakeholders, from employees to government, will help accelerate growth.

Respect for intellectual property and an anti-piracy feeling comes out strongly in your book. Is that an Indian tradition?

In India, we believe in sharing knowledge freely. Our epics like the Ramayana and Mahabharata are free. Everybody uses our ‘zero’ without paying royalty. IP is a western concept, one that the IT industry had to buy into.

In our early days at Hinditron, when we travelled abroad to try and sell our services, our prospects would look at us as if we were thieves. They would not give us business because they suspected we would sell out to their competitor for a higher price.

We knew that unless India respected copyright, the world would not recognize us as a business-friendly nation. NASSCOM lobbied hard to amend the Copyright Act 1957 to include software with some tough conditions. When the modified act (even stricter than the UK laws) did not prove as effective as we had expected, we recommended that software piracy be treated as a criminal act. The new Copyright Act of 1999 carried a seven-day jail term. These actions sent out a powerful message across the world: India was serious about the software business and IP. We became a trusted nation to do business with. And this stance has been one of the advantages we have over China.

You’ve written about the influence of Jain teachings such as Anekantvad on your life and work, can you give an example not mentioned in your book?

I’ll tell you about an incident that took place at a customer site in the 1990s. My company, Onward, produced ALPM (Account Ledger Processing Machine), a single desktop which did simple data processing. We had shipped a large number of ALPMs to the Bank of Baroda and many other banks. BOB was now ready to step up to the next stage of automation, but there was resistance from the labour union. The negotiations continued for some months. One day CIO K Kannan – later MD and Chairman of BOB – asked if I would be willing to attend the next meeting to present industry’s views. He told me that the demands were simple: automation should not result in layoffs or loss of increment, plus a few minor points, all of which the management agreed to. However, they were still refusing to sign.

I remember that meeting vividly – a huge table with thirty or thirty-five people on either side, with management sitting across from the union members. They talked and argued, and I sat quietly and listened. There was no unresolved issue, but the aggression was tangible. After some time, I got up and went around the table and sat next to the union leader. He looked at me suspiciously and asked curt questions. “What do you want? Why are you here? But you represent the management!” I explained that I represented customers of the bank, and those were essential to both management and union. That broke the ice, a relaxed discussion followed, and the agreement was signed. This is an example of something I was trained in at an early age – the Jain philosophy of Anekantvad which encourages you to take a non-egoistical view of things, to look at the other person’s point of view, and when in doubt to choose the higher common good, because there is no such thing as absolute truth.

I have also benefited from other concepts of Jainism. Aparigraha is the law of detachment. When I had to give up my place as MD of Onward, my son was selected by the board to replace me. He was still in his mid-thirties, and I was criticised by many and warned of sombre consequences! But it was the right time for the younger leaders to take over, and I found it easy to give it up. Similarly, Sweekar – acceptance – has helped me through the tragedies of my life.

In an interview about the autobiographical aspect of this book, you said it was like taking the risk of walking naked on the streets. How did that turn out?

I’m enjoying being an author. Many from the industry, some critics, and quite a few strangers, have written to me praising the book. Seeing your book at the bookstores gives you another high. Traditionally, we Indians have never really valued writers, and I would like to contribute as a change driver in that transformation too!

The other day my daughter-in-law’s friend came to talk to us about the book. While we were chatting her phone rang, and she stepped aside to take the call. We heard her say, “I can’t talk to you now, I’m having wine with an author!”

That felt good.

Saaz Aggarwal is an independent journalist. She lives in Pune.

One of India’s earliest tech entrepreneurs talks about the contribution of NASSCOM, the impact of the IT Revolution, and the influence of Jain teaching

What made you write this book?

India’s economy has ballooned in the last few decades, and the seminal role played by the IT industry, which contributes almost 10% of the country’s GDP, has not been properly acknowledged. Noted professionals, industrialists and even bureaucrats have written books but none mentioned its contribution, or the contribution made by NASSCOM in fuelling this growth. Even seasoned economists only credit the economic reforms of 1991, unable to explain how these reforms arrested the downward spiral our economy.

The reforms did help to make the business environment more conducive, and almost all sectors grew – but no other industry matched IT. It was a technology-led revolution, and this success was an outcome of what we did at NASSCOM – some of which were getting the government to understand how IT would transform the world and the opportunities it would give India, working with IT companies to embrace global practices, and building brand India at various levels. It was a structured series of monumental tasks.

Someone had to play the role of the historian and set the record straight!

What has been the social and cultural impact of the IT revolution?

The Indian IT industry employs 5.3 million engineers, and earns foreign exchange of around $160B. In some countries, growth and riches are divided amongst the king’s family or a few large companies. But in an IT company, about 70% of expenses are employee-related. These jobs give a high disposable income which allows employees to expand their imaginations and wings. The second-order effect has been humongous. It’s the IT jobs that gave the real estate sector its biggest boost. Our airports needed to be expanded because of the global reach of our business. Our campuses and infrastructure gave a boost to many businesses.

In the past, to get a job you needed to know someone. In IT, if you get through the standard recruitment test, you get the job. This seeded a meritocratic revolution as India Inc started following our standards.

It’s not just meritocracy we introduced but also a new era of gender equality. Today the IT industry has 37% women employees: almost two million women delivering great outcomes and earning a good income, enjoying freedom at work and freedom at home. Imagine the cultural change as these women bring up their families and inspire the next generation.

Industry players also set world-class standards of corporate governance and transparency standards in financial reporting – these built trust in India Inc and opened the gates for FDI money.

As for my friends who run MSME/SMEs, most lament about the government regulations crippling their growth. The only way to do business was by bending the rules. Subsequent generations who inherited this environment assumed it was the only way. However, the changes around them have encouraged young entrepreneurs and smaller companies to start doing things differently.

Do you have a message for the new generation, the start-up people who are building the unicorns?

I admire this generation – they are fearless, imaginative, and confident. And they have the potential to change India faster than any of us can imagine. Technology is like bottled lightning, and they have the capacity to bring it out and use it to create solutions.

They are also lucky to inherit an environment that can enable them to solve the problems that have been plaguing us as a society!

Of course, I’d like to caution them. I see many young ones chase valuation and not values. They should chase both and never focus on one at the cost of the other.

I also feel that they are too hyper-focussed on their respective businesses. At NASSCOM we saw success differently. Each of us spent 10% of our time working for the ecosystem – contributing to the industry, or to India. I believe this allowed us to deliver a CAGR of 30% over the last 30 years. We knew that if the size of the industry pie grew, our slices would get bigger too, and that’s the way it turned out. When you think like that, your approach to solving problems is markedly different.

People in today’s start-up space have to understand that building trust with competitors, as well as among stakeholders, from employees to government, will help accelerate growth.

Respect for intellectual property and an anti-piracy feeling comes out strongly in your book. Is that an Indian tradition?

In India, we believe in sharing knowledge freely. Our epics like the Ramayana and Mahabharata are free. Everybody uses our ‘zero’ without paying royalty. IP is a western concept, one that the IT industry had to buy into.

In our early days at Hinditron, when we travelled abroad to try and sell our services, our prospects would look at us as if we were thieves. They would not give us business because they suspected we would sell out to their competitor for a higher price.

We knew that unless India respected copyright, the world would not recognize us as a business-friendly nation. NASSCOM lobbied hard to amend the Copyright Act 1957 to include software with some tough conditions. When the modified act (even stricter than the UK laws) did not prove as effective as we had expected, we recommended that software piracy be treated as a criminal act. The new Copyright Act of 1999 carried a seven-day jail term. These actions sent out a powerful message across the world: India was serious about the software business and IP. We became a trusted nation to do business with. And this stance has been one of the advantages we have over China.

You’ve written about the influence of Jain teachings such as Anekantvad on your life and work, can you give an example not mentioned in your book?

I’ll tell you about an incident that took place at a customer site in the 1990s. My company, Onward, produced ALPM (Account Ledger Processing Machine), a single desktop which did simple data processing. We had shipped a large number of ALPMs to the Bank of Baroda and many other banks. BOB was now ready to step up to the next stage of automation, but there was resistance from the labour union. The negotiations continued for some months. One day CIO K Kannan – later MD and Chairman of BOB – asked if I would be willing to attend the next meeting to present industry’s views. He told me that the demands were simple: automation should not result in layoffs or loss of increment, plus a few minor points, all of which the management agreed to. However, they were still refusing to sign.

I remember that meeting vividly – a huge table with thirty or thirty-five people on either side, with management sitting across from the union members. They talked and argued, and I sat quietly and listened. There was no unresolved issue, but the aggression was tangible. After some time, I got up and went around the table and sat next to the union leader. He looked at me suspiciously and asked curt questions. “What do you want? Why are you here? But you represent the management!” I explained that I represented customers of the bank, and those were essential to both management and union. That broke the ice, a relaxed discussion followed, and the agreement was signed. This is an example of something I was trained in at an early age – the Jain philosophy of Anekantvad which encourages you to take a non-egoistical view of things, to look at the other person’s point of view, and when in doubt to choose the higher common good, because there is no such thing as absolute truth.

I have also benefited from other concepts of Jainism. Aparigraha is the law of detachment. When I had to give up my place as MD of Onward, my son was selected by the board to replace me. He was still in his mid-thirties, and I was criticised by many and warned of sombre consequences! But it was the right time for the younger leaders to take over, and I found it easy to give it up. Similarly, Sweekar – acceptance – has helped me through the tragedies of my life.

In an interview about the autobiographical aspect of this book, you said it was like taking the risk of walking naked on the streets. How did that turn out?

I’m enjoying being an author. Many from the industry, some critics, and quite a few strangers, have written to me praising the book. Seeing your book at the bookstores gives you another high. Traditionally, we Indians have never really valued writers, and I would like to contribute as a change driver in that transformation too!

The other day my daughter-in-law’s friend came to talk to us about the book. While we were chatting her phone rang, and she stepped aside to take the call. We heard her say, “I can’t talk to you now, I’m having wine with an author!”

That felt good.

Saaz Aggarwal is an independent journalist. She lives in Pune.