Indian IT firms urged to focus on domestic market

Thursday, 06 November 2003, 20:30 IST
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BANGALORE: India's export-oriented software industry must focus on the technology needs of the vast domestic market with a view to creating new business opportunities, says management guru C.K. Prahalad. "We need to ask ourselves what fundamental difference we can make to create new opportunities. If Y2K glitch had put India on the global IT map, tackling Indian problems will create new opportunities globally," said Prahalad. "We need to first solve our problems at home before embarking outside as the world's present-day problems create a global opportunity for us," the University of Michigan Business School professor told an IT seminar here late Wednesday. The majority of Indian IT companies derive the chunk of their revenues by writing cheap software codes and taking care of back-office processing requirements of global corporations. Indian revenues account for less than two percent for the export-focused Infosys Technologies, India's largest listed software exporter. The company earns nearly 74 percent from the vast U.S. market. Urging Indian tech industry leaders not to worry too much about poor infrastructure and intermediate problems in the domestic market, Prahalad said wealth could be created through creativity and imagination. "Entrepreneurs should not sit and complain. They should strive ahead in spite of constraints by leveraging resources to innovate global products and services." Lauding the Indian tech sector for the great strides it has been making on the global front over the years, he told the IT industry leaders to address the concerns of about 800 million poor people in India and five billion worldwide. "With developed markets in a state of saturation, the world's poor offer an excellent opportunity for innovative technological and business solutions that will fundamentally alter the established economic patterns," he said. On the need to change the "genetic code more than the software code," Prahalad said innovation offered the best way to approach the opportunity presented by the poor and the new ideas would have to span technology and business models. "It is unfortunate that we consider that the poor are an intractable problem and that their welfare is not the concern of the industry, but of the state. "The moment we change this mind set and admit that we can make a consumer market out of the poor, they become an opportunity for business and profit," said the management expert. He said the modern tech entrepreneurs should have the imagination to juxtapose low-cost with high quality, sustainability and profitability in their business models. "If you can solve the problems of 800 million Indians, you have a market for five billion people waiting at the bottom of the pyramid as the latter too face similar problems, including poor infrastructure and inadequate health care. "Once we target the bottom of the pyramid, we not only improve the living standards of millions of poor, but also facilitate them to move up the value chain to create greater business opportunities in terms of utilities, products and services." Prahalad said the Indian IT industry needed imagination to marry the most advanced technology with the local requirements to create niche products and solutions.
Source: IANS
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