South India needs to catch up with the world, and North must catch up with South

India stands at the cusp of an economic upswing, given the brand new global geo-political realities that are throwing up new possibilities in the wake of the American election results that have put Republican Donald Trump in the driver’s seat again in Washington.

India Inc, of which Ganapathi Ramachandran is a key member from the prosperous and progressive South India, having headed one of the country’s oldest and most prestigious chambers, the South India Chamber of Commerce and Industry, and also a key member of the IIT Madras Alumni’s start-up mentoring program, would like the view the emerging economic scenario as one that is a glass half full, and one with exciting possibilities that give India as much chance as any other country to succeed – globally, in the cutting edge deep technology arena, and as well as becoming the World Data Centre capital.

As we all know, data is the new oil.

In Ramachandran’s telescopic big picture view, for the present Europe is in the gutter, America is going to get into some sense of a protectionist mode, and China has excess capacity. So, unless India also adopts some sort of protectionism in terms of tariffs, we could be in a bit of a problem.  We must ensure that India does not become the world’s dumping ground.

China has its way of dumping, say by way of Mexico into the US, and Vietnam Thailand, and the Cambodia route, Ramachandran says in an exclusive interview with www.southonomix.com

As an entrepreneur whose IT services are exported worldwide and as a technology-first and tech-savvy person with eyes scanning the globe for opportunities, Ramachandran assesses and analyses global developments across sectors processes them from the Indian perspective, and devises strategies to maximize profits for his company and, by extension, for India.

The patriot in him does pass on ideas to those in the thick of things in New Delhi, and those who have the power to make a difference.

In his assessment, today is the time for political satus-quoism, which is important, but economic growth should be at the front and centre of everything.

Aggressive reforms are needed to make use of the global opportunities present. We cannot pretend to be a consumption country, we must focus on competitive exports, and there must be a tremendous focus on clean green energy. Because Europe and the US will stop accepting goods from you after 2030 if you don’t produce using green energy. Now, there is a need to focus on Solar energy, wind energy, and ocean energy. These are some of the things India needs to focus on, and India needs to urbanize much faster as Tamil Nadu has done.

The great success of Tamil Nadu has been its phenomenal urbanization. If you travel from Chennai to Chengalpet, Dindivanam, Vilupuram, and up to Trichy, each town looks like the other, almost the same. It is almost like traveling from Frankfurt to Stuttgart. Each city and town do not look different and has similar infrastructure, Ramachandran said.

“In my opinion, roads should create the nation’s wealth. A nation’s wealth should not create roads. We must go hammer and tongs with connectivity. Some tough decisions must be taken.

Citing an example, the Madras port has no business to be where it is. The entire Madras port should be integrated with Ennore port into a larger port to handle the goods. Madras port has no efficient road connectivity to move the goods. Locationally, the Madras port is right in front of the secretariat, it might have been relevant when Robert Clive came, but not so now when Stalin is trying to do his best. “These are some of the decisions we need to be brave enough to take,” he said adding that the Madras Port could be turned into an area for government offices, making Marina like a Singapore tourist attraction.

We need innovative thinking, which seems to be missing, for whatever reason. A good scheme will always find resources.

“If India has to grow, first the south needs to catch up with the world, the north needs to catch up with the south, and India has to catch up with the world.

I am seeing a change in growth in places like Uttar Pradesh, Madhya Pradesh, and Haryana. It is not as if they are lagging, but to cover a gap of 20-25 years, it is a marathon. The marathon is happening.

In India, we need to focus more on primary education, infrastructure in primary education, and quality education delivery in primary education. For this to happen you need to make it profitable for good people to come into education, into teaching. Pay the teachers the most, respect them.

In the case of the South, say Tamil Nadu in particular, the early decision that Kamaraj took, in introducing the noon meal scheme in a modest way in setting up village and panchayat schools upwards at block levels – both together have had a huge impact. Focus, today, tomorrow, and always must be on primary education, health care, focus on law and order, foreign relations, make it easy for people (investors) to come in and go.

“I heard this at a seminar at Harvard a few years ago, the difference between China and India: In China, it is easy to get in and difficult to get out and in India, it is difficult to get in and easy to get out. So take a pick,” he said and cited the example of Japanese CEOs he encountered in Chennai.

“See, global CEOs are happy to be in India, and some of the Japanese CEOs in Chennai are happy with golf courses in Chennai and the kind of help and support they get at home is something they don’t want to lose out on, to make their lives easy. They don’t want to leave India and go back to Tokyo,” Ramachandran said.

“Now, is the time for India to make it easy to come into India and easy to go out, because China is struggling. And China with its huge housing crisis, I think we are in a place where we need to capture quickly,” he said and added, “Most people speak of China plus one, But I would like to say China plus 2, we should start picking up investments from Europe also.

There are two areas we need to focus on – invest heavily to become the data centre capital of the world, we have the knowledge base, and language skills, investment needs are minimal and there is assured power and good bandwidth. The second is we need to create Rs 500 crore capital which can take a backstop on the RBI’s quick balance sheet and support academia investing in research and support lab-to-market initiatives in the area of deep tech.”

He then goes on to cite the example, Ather as India’s greatest success story, a lab-to-market initiative of IIT Madras. “If you see how Silicon Valley has grown, it has grown on the back of technology innovations, coming out of Stanford. How to take it to the market, how to globalize it, and how to make it a success, the key difference is the absence of risk capital. Take IIT Madras, the research park there has a staggering valuation of nearly $ 5 Billion. Show me one research park in the world with that kind of a valuation?” he asked.

Can we do something more?

“The answer is yes. How to do this is a matter of detail. We have to make risk capital available for successful entrepreneurs in academia, teachers, students, and professors. We need to focus a lot on lab-to-market initiatives. Failure in lab-to-market initiatives is around 89%.

The producers of technologies are not great sellers.

Telling is not selling. They need journey mentors – for young entrepreneurs. Kids develop technologies that find a place in the sun soon, but he should focus only on producing the technology and you need to help them with marketing and other things. There should be a framework in place for this,” Ramachandran said.

Is there a success model that can be replicated?

“Surely, not just in Tamil Nadu. In IIT Madras, we have done it. In IIT Madras there is an IIT Madras Entrepreneurs Forum, and I had the honor of leading it in the past,” Ramachandran said adding, “There should be greater volunteerism coming in from successful global entrepreneurs. And share their knowledge and spend some time with the start-ups, assessing their technologies, validating their ideas, and products and helping them all along their journey by connecting them with end clients and the like and making the products market relevant. We need to do more of these, investing in these activities, not just in IIT Madras but in many institutes, across India. There are many success stories like Planys Xyma Ather , etc.” he said.

What needs to be done?

“I think we need to have intensive discussions with the kids who produce these technologies so that their ideas do not end up in the labs after they are off the campuses. See back in 1977, when I was with IIT Madras, I had to do a project to complete my course – and it was an aerial camera, which later if somebody adopted it and innovated further, could have been the modern-day drone,” Ramachandran said by way of an example of the lost opportunity.

This is why we need to put a better framework in place to monitor all these things. But things are happening that give the confidence that we can make it.

“I am delighted to say that IIT Madras under Professor Kamakoti, is taking lab-to-market initiative to new levels of excellence. I don’t get excited by Unicorns, I don’t get excited with global Indian CEOs, but I think we should start having global companies here with Indian CEOs,” Ramachandran said.

A word of caution.

“But one thing must be kept in mind. The deep tech failure rate is 80 percent and India must be ready to experiment without fear. Because even a 5 percent success of deep tech will enable the country to recover all that was lost due to failures. So, we must not be afraid of failures and keep on at it. And we must empower and enable our institutes to do it,” Ramachandran said and added, “America’s growth has been on the basis of the first use of the frontier technologies it built. India too should assume such leadership role in developing deep technology.”