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NRI Hi-Tech Entrepreneurs Are Compassionate Capitalists
Friday, November 21, 2008

When I look at Silicon Valley Indians, I do so with great pride and satisfaction. The “Silicon Warriors,” as I like to call them, have done yeoman service to the nation. When somebody talks of India, particularly in the United States, they do with a great deal more respect now than ten years ago. This is because the Silicon Warriors have enhanced the image of India immeasurably.
I have always said that a certain percentage of smart Indians will have to go out of the country and do well in diverse fields, diverse societies and different countries. This was, to my mind, the best way to “brand” India. In the case of technology, at least, this is exactly what has been achieved by the many Indians, most of them in Silicon Valley but a lot many in other parts of the United States too.

Many people have asked me why I did not choose to come to the US or to Silicon Valley to start a company. To be honest, it is a thought that never crossed my mind. I worked in France in the early 1970s and then hitchhiked my way back to India. When I joined hands with some friends to start Infosys Technologies, every one of us was of the opinion that we should create an enterprise that will provide opportunities to Indians in India. We never considered anything else.

We, of course, borrowed some features that Silicon Valley firms employed in creating the Infosys of the ’90s. Any visitor to our office, especially those from the US, thinks it is very much like a Silicon Valley firm. Actually, I believe it resembles more an American campus; we have a gymnasium, basketball courts, an amphitheater and a variety of other facilities that are common in technology companies in the US.

We also adopted as our stated goal world-class technology and reward our employees in line with global standards. Infosys was the first Indian company to award stock options to its employees. In fact, we did it with a difference, customizing it to the Indian environment in a manner that benefited our employees the most.

The Indian stock market was not a well-developed one and nor was the concept of stock options. Most employees did not even know how it worked. Therefore, we offered the options at substantial discount to market prices, unlike in the US. For example, the first lot of options we offered was at $2.35 per Infosys share when the market price was about $15. With our system, our employees gained the most, and they deserve the most, too, because they fashioned the success of the company. Our staff works long hours, just as they do in Silicon Valley firms. We work hard and play hard.

Right from the start, we believed in two principles:

1. If we place public good ahead of private good, the private good will prevail over the long run.

2. In any civilized society, duties come before rights.

Our staff recognizes, understands and appreciates these principles. Consequently, the work ethic at Infosys has been exceptional.

Of course, this success was not achieved overnight. It took a few years. As founders, we determined that we would lead by example and make the necessary sacrifices. We realized that among white-collar workers and professionals, this works well only if we walk the talk. Until recently, before I handed over the day-to-day operations to Nandan (Nilekani, the managing director), I would be the first in the office at 6:20 a.m. and wouldn’t leave until around 8:30 or 9 p.m.

The experience with Infosys has convinced me that that the only way to solve the national problem of poverty is by creating wealth and jobs. This requires a few leaders who themselves need adequate incentives to create wealth. If the government can create an environment that facilitates creation of wealth, it will have done a great job of addressing the poverty problem.

In my younger years, I was sympathetic to socialism but I am now a true believer in capitalism. Having said that, capitalism needs to be customized to the Indian scenario. The Indian masses have long been fed by silly ideas and utopian socialism. If we now want them to subscribe to capitalism, the initial leaders of capitalism, those who espouse capitalism, will have to practice what I call compassionate capitalism. These leaders must identify with the masses by leading simple lives, not display wealth in a vulgar manner and also give back to society a major portion of what they earn. That is how capitalism can gain acceptance in Indian society.

I am so glad that successful Silicon Valley Indians are doing just this. Despite enormous wealth, they still lead simple lives and contribute generously to social causes. To name only a few that I myself have closely interacted with Kanwal Rekhi (private investor), Desh Deshpande (chairman, Sycamore Networks), Suhas Patil (private investor) and Rakesh Gangwal (CEO, US Airways), Deepak Bhagat (Director, SUN), Prof. Arakere Vasudev and Prof. M. A. Pai. They have been extremely affectionate toward their motherland. Besides donating their money to several causes, they spend their valuable time to raise money. Whenever we visit the US, these people give their quality time to us and help us in many different ways. In recent years, they have started TiE (The Indus Entrepreneurs) chapters in India. By all accounts, the high-tech entrepreneurs in the US have been extremely generous and philanthropic.

To quickly build on the contributions from abroad, India should also produce several successful companies in the next few years and spread the wealth all across the country. We already see several promising companies on the horizon, and I would hope, for the sake of the country, that several hundreds more would come up, and surpass Infosys in terms of success and achievement.

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