A $100 million investment planned in India by the New York-based software giant Computer Associates (CA) will kick-start one of its most ambitious technology development programmes.
The programme would see a string of start-ups by local entrepreneurs and the development of value-added information technology (IT) products, Sanjay Kumar, CA president and chief operating officer, said.
On top of Kumar's agenda is to create a new image for the Indian software sector which has been hitherto considered only as a source of low-cost programming talent.
The $4 billion company has received permission from the Foreign Investment Promotion Board (FIPB) to set up a 100 per cent subsidiary in India.
"In north America India is primarily viewed as a supplier of programming talent," Kumar told IANS. "Any IT company would say India has good programmers. In hardware, they would say India has a lot of good engineers and good mathematicians. Lately the view of India has changed a little bit for the better," he said.
Like the US, India should foster partnership between industry and educational institutions, he felt. "In America a greater value is being placed on practical experience while people go to school. This is not happening here," he noted.
"We have to get people to work as they study and study as they work. That is very, very important," he said. Kumar wants to see Indian educational institutions partnering aggressively with businesses.
"I would like to establish a programme in India with a couple of universities. When the students finish school they will be a lot more smarter and they have a lot more of practical experience. You have to combine some sort of business skills of the real world while they are being educated. This is a great way to spawn entrepreneurship," Kumar added.
CA has already chalked up its development programme in different phases including the setting up of a technology development park in Calcutta and a software incubator to help Indian developers with access to state-of-the-art facilities.
The $100 million programme would include setting up of its first Asian technology centre, start-up funding and collaborative research and development work with local institutions over the next five years.
For the first time, Kumar said, the north American IT industry views India as a market to sell products into. "We believe that this is going to be a growing marketplace.
In the past we never thought of selling software here. We thought of only producing products by hiring talents here. And I think the change in perception is a very good thing," he added.
Because of the stupendous development in global communications, programming talent can be accessed anywhere. But when the market develops, companies also think of investing in product development in such markets. Increasingly companies are looking at India as a place to do business and sell products.
"This, I think, is a fundamental shift in perception about India. There is also shift away from thinking of India as a bodyshop," Kumar said.
Confining to bodyshopping has constricted the revenue stream, Kumar argued saying that as Indian entrepreneurs take more risks they would get greater rewards. "But India is not in this league. You have creative talents here. In the next few years India has to become entrepreneurial," he said.
Today no country has a monopoly on creative people and they are available everywhere. "What is important is how many of these markets are willing to foster entrepreneurial spirit like the United States. I believe you have to set up a system where you take a portion of the creative talent and help them get started. This is the role of venture capital," he said.
Kumar said CA wants to be the first in "igniting some entrepreneurship" and show some success in India. "The way I want to do that is a little different from the traditional venture capital," he said. This is the reason why CA is setting up the software incubator in India, he explained.
CA aims to encourage Indian software entrepreneurs move up the value chain. "I think, this would help the Indian software industry become robust."
If it does not move up the value chain India will be "simply stuck up as a low-cost supplier that is competing on price. I think there is a recognition on the part of the industry here that it has to do so," Kumar said.
