Macro Interview

Trump, Brexit? Not a problem

Fears of the outsourcing industry’s decline are greatly exaggerated, B.V.R. Mohan Reddy, founder of engineering outsourcing firm Cyient and recent Padma Shri recipient, tells Viraj Nair. The real challenge will come from technology.

News of a potential change to U.S. immigration rules sparked a panic attack in the $150 billion (Rs 9.5 lakh crore) Indian IT industry in late January. Outsourcing companies are highly dependent on the H-1B temporary work visa programme in the U.S., which is currently in President Donald Trump’s crosshairs. IT industry veteran B.V.R. Mohan Reddy reckons there are bigger challenges elsewhere. Edited excerpts:

 Congratulations on your Padma Shri.
I feel very honoured. The Padma Shri is a big recognition. More interestingly, it has been given to only one industry person this year. That makes it much sweeter. It is recognition for a first-generation entrepreneur. Over 25 years, I’ve built a brand called Engineered in India. It was a fairly disruptive idea because nobody ever outsourced engineering, and I set the company [Cyient, formerly Infotech Enterprises] on a path that very few people had taken in the past. A reflection of our success is that we now have 14,000 people of 36 different nationalities in 28 countries around the world. At least 30 Fortune 100 companies are our customers. This proves to the younger entrepreneurial world that if you have an idea, if you have a solution to your problem, a focus, a scaling strategy, and persist with the idea, you’ll always make a success of it.

With Trump in the White House and Brexit, are you worried about the future of outsourcing?
One thing everyone has to accept is that globalisation is an irreversible process. What happened in globalisation is that people opened up the whole world and said, ‘Wherever it is best, we’ll do business there.’ Yesterday before an event, I was reflecting on what I need to say on globalisation. I looked at my hand and I had an iPhone, designed in the U.S., made in China; then when I wanted to know the time, I had a Swiss watch; when I wanted to write something, I had a French pen; I was driving a German Mercedes car. In a situation like this, how can you say things will change or reverse?

Things do go backwards sometimes, the Greeks invented democracy but it fell out of fashion for a millennium.
If you look at it dispassionately, what is going wrong at this point of time? What has gone wrong is that the fruits of globalisation have not reached certain segments of society. Take Brexit for instance. Seventy of the 100 British dollar billionaires are in London, so the benefits of globalisation have reached them. If you look at the voting patterns, Londoners voted to remain, whereas people outside London were swayed by the exit campaign.

If you can make sure fruits of globalisation trickle down to most sections of society, you’ll find support for it. Otherwise what happens is a politician comes along who stokes the emotions of the people, and when those emotions are brought out, there is a high probability people will vote for such motions. I think more corrections will happen, but globalisation is not a reversible process.

Moreover, U.S. companies have benefited tremendously from outsourcing. That it was cheaper was just a small part of it. Most important, their time-to-market came down dramatically, the ability to move ahead of competition. Firms that outsourced went ahead of others.

Even so, do you think the next few years will be rocky given the political scenario?
I don’t think the next few years will be that challenging. There are challenges, for sure. Not from the global political scenario, but mainly from other areas. They are much deeper challenges. The technology shifts that are currently occurring put tremendous pressure on us in terms of skills.

The skills of the past are not the skills of the future. For instance, people like me belong to a generation that coded in a language called Autocoder. Have you even heard about it? Then programming was all about COBOL. After that you had Fortran and C++. If I mention Python today, people think I’m talking about an animal somewhere. So things are changing quite dramatically.

The biggest challenge won’t be Trump and Brexit; it will come from technology. The most important one is automation. You have to keep pace with it.

You have spoken about promoting entrepreneurship, incubators, and angel investments. Could you elaborate on those plans?
The future of this nation lies in entrepreneurship and startups. The environment is extremely conducive for startups for a number of reasons. Firstly, technology is at its best. More often than not in history, technology has driven change.

The technology shift you see now is far different from what it was in the past because the acceleration of this change is the fastest. If you look at the scenario today: Costs have come down, amount of computing power has become massive, and people have got connected.

The government is also providing a very friendly environment and ecosystem. The market space is huge. You have technology, an ecosystem, and a market. It gives a tremendous amount of opportunity for entrepreneurs.

What do you like to do in your spare time?
Where is the spare time in life? One can always criticise me saying I don’t have a proper work-life balance, but that’s okay with me. I always had a singular mission. I needed to succeed in building a company which would create jobs and wealth.