24 Jan 2018 15:28 IST

Zillions of opportunities for start-ups today, says Narayana Murthy

Focus on everyday problems that affect the consumer directly, he tells students of Manipal Academy

Manipal Academy of Higher Education (MAHE), which was granted a deemed-to-be university status in 1993, is 25 years old. Started with five institutions in Manipal and Mangaluru with around 5,500 students, MAHE is now present in three countries with 32,000 students.

To mark the beginning of its silver jubilee celebrations, the institute conducted an interactive session with NR Narayana Murthy, founder of Infosys. Murthy discussed issues related to entrepreneurship and higher education, among others, in the session moderated by Gayathri Prabhu, Associate Professor of Manipal Centre for Philosophy and Humanities. Excerpts from the interaction:

Infosys was started three decades ago with a focus on IT services. What would be your suggestions to young Indian entrepreneurs in the current environment?

When we founded Infosys, I assembled six younger colleagues of mine in my home in Mumbai. They were about 11 years younger than me. Some suggested that we do this product or that product. Finally, I suggested that the best thing to do would be to be a service company. I used several pieces of logic.

The Indian environment — definitely then, and to some extent even today — is not very competitive. Indian corporations don’t believe in buying technology to gain competitive advantage. We decided the best thing would be to go to the export market. In the export market, for us to design a product from India and sell it abroad was very tough. Because we were far behind the leading edge in terms of markets, ideas, technology, all of that. Therefore, we decided to go into services.

Second, I said even if two corporations — C1 and C2 — were to compete in the marketplace, the only way one can take a bigger market share is if it creates a differentiated business value proposition.

You create a differentiated business value proposition, by and large, through your product, value for money and so on. At the same time, you need systems to provide a better customer experience, employee experience and investor experience. Therefore, even if these two corporations were to install the same package — say, SAP — they would still have to build a layer of customisation on top of that.

We realised that when SAP became very popular in 2000. For every dollar of licence revenue that was sold, there were two to three dollars of customisation revenue. Therefore, I said in 1981 that the market opportunity for services will continue to grow. That is how we decided to be in services.

I think, even today, I have not come across any nation, other than the US, that has succeeded in creating software products. Neither Japan nor Australia nor the UK have produced any successful software product. It is only the US.

So it is a little far-fetched to think that we in India can produce something that will become a household name in the developed world. That is where the money is. That is the reason why I believe that our youngsters should focus on problems that we come across every day in India.

There are zillions of problems. So there are zillions of opportunities for our youngsters to find ideas that will open up opportunities for them in India. But these opportunities will only work if they addresses the consumer directly.

Working with governments here poses a little bit of a problem for various reasons. I think we are evolving now, and lots of good things are happening. But still, depending on the government for your market is something you may not want to do now.

In today’s world, every second millennial either has a start-up or works for one. How easy or difficult was it for you to get a business like yours off the ground?

The challenges today are different from the ones we faced. In my opinion, the challenges of today are even more difficult.

Our challenges were that we did not have current account convertibility; nobody would give us a loan, getting a telephone connection required seven to eight years, travelling abroad, even for a day, required applying to the RBI and waiting for days. By and large, our problems were with the Indian government and the Indian environment.

Today, you have a bigger challenge — of convincing the market that your idea, your product is better than all the others, many of them from the most advanced countries. So when you compete here in India, you are competing not only with the Indian competitor but also with the global competition. I would think that the youngsters of today face much bigger challenges than we did.

Many of us are amazed at the speed at which technological advancements are evolving, and how they are impacting the workforce. How does one prepare students for this?

The reality of the pace of technological change today is that it is very difficult for anybody, not just the non-technologists but for anybody, to predict beyond, perhaps, five to 10 years. At the same time, your education system has to continue — that is, you have somewhere around 12 years of school education and then three years of college education.

We don’t know what will happen 10 years from now. But we have to start preparing our children. That is our big challenge. Given the rapid growth of automation, artificial intelligence, machine learning, and big data analytics, among others, there will be a considerable impact on job opportunities. A lot of jobs will be done by automation, so there will be quite a big change in job profiles.

Now, nobody can predict what will happen. However, there is a solution. That is where universities are extremely important. I hope our regulators in the education system appreciate this and encourage more universities to think about these problems and find solutions.

We would want our young men and women to become more curious, to think independently, and find more solutions to the problems around us. In other words, the ability to learn new things, or what I term ‘learnability’, is all that you can teach youngsters. The ability to do independent thinking and unravel the mysteries of nature will follow.

It is difficult to say what jobs will exist about 15 years from now. The only thing we can do is orient our youngsters towards independent thinking, problem solving, and so on.

What are one or two things that Indian universities have to do, to enable conditions for original thinking?

There is an urgent need in India to encourage universities like MAHE, for a very important reason. I don’t know any nation which has made the life of its citizens better without original, deep thinking or without a commitment to research.

For example: the oldest university in the world — Nalanda — which is supposed to have existed from 500-1200 AD, that was the time when India was at the top, that was the time of Aryabhatta, Bhaskaracharya, Leelavati, Madhava and Hemachandra. What we call Pascal’s triangle is actually Hemachandra’s triangle. Hemachandra did it probably 400 years before. Those were the days when India’s academic story was at its peak.

The first university in the US that focused on research is not Harvard, it is Johns Hopkins. In fact, the focus on combining research and higher education was the prerogative of Johns Hopkins. Harvard and Columbia came later.

While science is about unravelling the secrets of nature, engineering and technology are all about using the power of science to overcome the limitations imposed by nature. Therefore, what we need to do in our country is teach our children, starting from primary school, the importance of the STEM (science, technology, engineering and mathematics) areas. If our children are curious about nature, if we can make youngsters first understand nature around them, and then create examinations that help them think originally, Indian children will be second to none.

So the first thing is to bring about open-book examinations in the universities. Especially in mathematics, science and engineering, it is certainly feasible.

Second, we have to ensure that teachers do not douse the curiosity of bright students. Because the task of a teacher in a college or a university is to address the average student, there is always the possibility that the brighter student will lose interest in class.

Now, some US universities have come out with a different model. What they do is that for the top 10 per cent of the students, which you can actually do in MAHE for the top 10 or 5 per cent, they create specialised courses called honours courses. You have an honours version of algorithm, physics, operating system, and other subjects.

In the honours version, anywhere between 50 per cent to 200 per cent syllabus of the normal version from the course is covered. The examination is two-three times tougher, but the honours students don’t get any special degree. All they get is a course with honours written in bracket. What they have achieved with this is that they have not let down the average and below-average students. At the same time, they have kept the really bright students’ enthusiasm and curiosity intact.

The reason I suggest this is because, as somebody said, only those who win the semi-finals get to play the final, which is a tougher game with a tougher opponent.

Therefore, because you are already at the height of rankings of most universities in India, here is an opportunity for you to extend the frontiers of the methodology of education, and extend the frontiers of children’s curiosity.