Every nation experiences a seminal event that brings revolutionary changes in its economic life. Vanover Bush's proposal that US universities should focus on research to fuel US economic growth was in effect a critical reason for the extraordinary strides that the US has made in hi-tech.
The success of the auto industry in Japan propelled that nation to be the second most powerful economic power in the world. Similarly, the emergence of the software industry in India heralded a new confidence, a new mindset and a new paradigm in the Indian business.
For the first time in the history of this country in 300 years, the country felt that it had arrived on the international business scene. Let me talk about a few major contributions of this industry to the nation.
It is generally agreed that this industry has raised the international image of the country like no other sector. Wherever you go in the developed world, there is a new-found respect for India, thanks to the software industry.
India has gained reputation as the software development centre of the world, much like China's reputation as the factory of the world. Many influential authors have told me that our industry is an important reason for India being bracketed with the enormously successful China.
Most of the top companies in this industry have followed the finest principles of corporate governance, run their companies with transparency and accountability, are listed on international exchanges like NASDAQ and NYSE, and embraced the changes on these exchanges as front runners and brought recognition to India.
Infosys has been a pioneer in advancing the state-of-the art corporate governance practices in India. Infosys is also the first company on NASDAQ to provide the balance sheet and income statement according the GAAPs (the Generally Accepted Accounting Principles) of eight countries - India, US, Canada, UK, France, Germany, Japan and Australia.
During the nineties, a popular saying among the industry leaders was, "If you see a Mercedes Benz car in front of a house, you can be sure it belongs to the CEO of a failed traditional sector company; If you see a ramshackle ambassador in front of house, you can be sure it belongs to the CEO of a hugely successful software company". This sentence says a lot about the majority of the leaders in our industry.
The software industry has replaced the public sector as the largest creator of jobs. Today, TCS, Infosys and Wipro add more high quality, high disposable income jobs a year than any other company has done in the last hundred years. Such jobs have stimulated the economy in a significant manner.
Our youngsters buy vehicles, buy homes, go on vacation, shop in supermarkets and go to restaurants. When the industry is in top gear, which it has been for most of the last 15 years, there is joy on the main street, an air of confidence among shop owners, and a sense of pride among the families of the professionals. In other words, this industry has been the creator of a positive spiral in our economy.
As I have often said, this industry has been the shining example of all the good that came out of liberalisation and the economic reforms since 1991. As against just 8 percent of the Indian engineering industry output going to exports during the nineties, the contribution to exports from this industry has been between 80 percent and 90 percent of revenues.
What is even more important is that the net foreign exchange percentage is one of the highest at 50 percent in this industry. Thanks to the invisibles from this industry, the country is in a strong balance of payment position in spite of soaring oil prices.
Major import-intensive sectors of our economy like automobiles, consumer durables, travel, computer hardware and many other sectors have been sustained, thanks to the head start given by the software sector. The top four companies in this industry have practised compassionate capitalism and have spent much time in addressing the social equity issues.
Tata's laudatory record in philanthropy, Azeem Premji Foundation's focus on primary education, Infosys Foundation's work in addressing the basic needs of the poorest of the poor, and Satyam Foundation's work in enabling the rural folks are good examples of focus of these companies in matters of social equity.
The leaders of these companies have often taken firm and bold stand on various issues of governance and social equity. Companies like Infosys have been pioneers in democratisation of wealth by distributing a significant portion of financial equity to employees. Infosys has brought the benefit of spread of wealth to a large number of employees from janitors and clerks to professionals. This industry has been the first from India to focus on world-class excellence in every aspect of operation - HRD, finance, sales and marketing, software development, physical infrastructure and technology. This has given confidence to other Indian companies to compete confidently in the global market based on global level of excellence. It has given them a new mindset, courage and confidence.
I can go on and on. The message is clear. That is, the software industry has added tremendous value to the country, the Indian business and the Indian people.
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