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May - 2004 - issue > Leadership
JERRY RAO
Arun Veembur
Friday, April 30, 2004
When Gregory Mankiw, George Bush’s top economic adivsor remarked that outsourcing was the “latest manifestation of free trade,” he found few takers—even the president distanced himself from the statement. Kerry has also been hawkish on jobs “lost” to India, as has been just about anyone else in the political arena.

Acts are being passed one after the other: there was Tom Daschle with his Jobs for America Act, and Senator Christopher Dodd with his Worker Protection Act. And the trouble is not only at the federal level. It is estimated that 24 states are considering as many as 47 laws on different aspects of outsourcing.

Jerry Rao, CEO of mphasis and the newly elected Chairman of India’s IT industry alliance—the National Association of Software and Services Companies, Nasscom, doesn’t exactly like it, and he is concerned, but he’s not going to lose any sleep over any of that.

“It’s election time in the U.S., there has been an economic slowdown. Jobs were not being created, but this was due to other reasons too. But attacking a foreigner never hurts in any political situation. So we don’t want to react with a panic attack, but would rather wait and respond in a sober manner.”

He points out that a lot of people who matter have taken up the position that free trade is good for the economy. There’s the New York Times, Alan Greenspan, various academics and company bosses and think tanks. After all, while outsourcing creates a win-win situation for both economies, and companies on both sides, it is not going to make that big an impact on the United States job market.

Consider, for one, the fact that last month as many as 300,000 jobs were created in the U.S. The total strength of the IT workforce is not more than half a million, and that of the BPO sector not too much more than a million. So it is obvious, he says, that given the scale of the U.S. economy and the economic cycle, that outsourcing and offshoring cannot really make a serious dent on unemployment rates here.

The present trend that he takes heart from is that all the fuss is slowly moving from the front to the back pages of newspapers.

Rao dares. Quite.
In Jerry Rao’s favorite poem, 'The love song of J Alfred Prufrock' by T.S. Eliot, there is a line that goes: And indeed there will be time To wonder “Do I dare?” and “Do I dare?”
The time has certainly come for Rao to ask himself that question. For, it looks like NASSCOM has been rather silent of late. What has it been doing? In the face of increasing American ire, the apex body has hired a PR agency to speak to—get this—senators. This is to clarify to these law lobbyists that outsourcing is good for the U.S. and for India. This will leave every senator answerable to his or her constituancy, where funds are shrinking even as tech jobs are being lost. Is the NASSCOM planning to promote any community returns, quite like how the Japanese did in the Seventies when they took away auto jobs?

Rao contests this hotly. “India is a small country,” he says. “Why, the size of the entire Indian IT industry is less than the Accenture topline, forget the Microsofts. So it would be patently ridiculous to try something like fund scholarships in the U.S. As for Hill and Knowlton, like any other association, NASSCOM has a PR agency too, which helps them talk to their constituency.”

What NASSCOM is trying to do is communicate through the PR agency. It provides the data that explains the situation better—to show that India is a place that is not only cheap, but also robust and reliable, with high quality standards. It explains all this to various audiences like the U.S. Chamber of Commerce, the Information Technology Association of America and various companies. It is up to these, says Rao, to make the case to the public. “I don’t think we can do it ourselves. We are too small, we are too unimportant to do it.”

The low profile notwithstanding, there have been some changes in the thrust. For a long time, the selling point of India as an outsourcing destination has been the cost factor. Now NASSCOM is stressing on the effect on productivity of the U.S. companies, resources that will be freed up, jobs that will be created. “Everyone knows the issues about cost. Over the last 2-3 years we have been talking about quality, and reliability.”

Inland Initiatives
Back home, NASSCOM is taking two major initiatives. One, as chalked out by Som Mittal, the previous chairman of the association, is the encouragement of Small and Medium Enterprises (SMEs). Out of the 800-odd companies, just over half-a-dozen have billion dollar toplines.

Among the rest, proclaims Rao, there is a lot of creativity and energy. What was lacking, however, is communication, a problem NASSCOM is trying to remedy, with some success, by setting up an SME forum. This forum will assist (“diligently”, as he puts it) in setting up SME networks, helping them secure financing, present their ideas and market their products. The forum has already seen success in that some of the members have come up with solutions that were of great use to others, a fact that Rao put down to the results of greater communication.

The other initiative is in the field of security. Rao plans to market security just the way cost was, and quality is, being marketed. It encompasses security in planning, development and operations. The message will be that India is one with the world on this issue, and eager to encourage and develop the best practices. Already the body has started a forum for security. This October, it has planned a meeting with the Information Technology Association of America in New Delhi.

Besides, it has helped the police set up cyber crime cells, which the members have funded, and trained the police personnel.

India might, as Rao puts it, still be a pygmy and not a giant, but it has what it takes.
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