INTELLECTUAL CAPITAL: IT or not to IT, that is not a question
There are things that got done in India that must be done sooner or later in Russia for its economy to become competitive and productive.
Oct 11, 2001
I worked hard to win acceptance to a top engineering college in India, competing with more than 2 million students nationwide for a mere 250 places. But, after being in the top 10 of a state with some 1.2 million peers, my grades began to fall to the equivalent of a C-minus within weeks of entering the college.
The reason for my academic slippage was a Russian mathematician, one by the name of Piskunov. Russian writers had been my childhood heroes. As a teenager, I had memorized Tolstoy, Sholokhov and Dostoyevsky. But now I had acquired a real Russian villain - Piskunov.
Eighth time a charm
His calculus book was part of courses at my engineering school. And even now, I still wake up in the middle of the night in a cold sweat dreaming about the exam I had to take on Piskunov's mathematics. I keep reminding myself that I really did pass that exam - after eight attempts.
During five years of rigorous engineering education - most of which passed me by like a cosmic event - I came across many books on science and technology written by Russians. Our engineering field trips took us to monstrous steel townships, the industrial heart and blood of India, created by Russians. My childhood was spent watching roaring Russian MiG fighters do dogfights overhead. I played games on Russian-built tanks lined-up next to our school. I was born the year our army, using Russian hardware, defeated a massive Pakistani invasion equipped with American hardware. Russian engineering and sciences built our country and saved our young free nation, even while Russian communists drove their own country into disastrous depths of economic destruction.
From a country that should be ashamed of its basic literacy rate (beside a thousand other things, I should add), ironically, Indians today make up well over 40 percent of global software programmers. There's a census under way in India that is likely to reconfirm that more than 60 percent of our people still cannot write their own names. Yet, the Indian software industry and IT business is a story Western and even Russian media never get tired of telling. When my own investments in the Indian IT sector doubled year after year, we ourselves marvelled over the irony of it all. We asked why India had done so well in the business of intellectuals despite being a country of peasants with engineering colleges like mine churning out graduates who would have trouble distinguishing a personal computer from a carburettor.
This, while fine Russian engineers, programmers, scientists, analysts and researchers - whose books and work we worshipped and feared - were living like Indian peasants. What did India do right that Russia did not is a question I am frequently asked. And what is it that Russia can do now to be a technology and software power? Like most other questions posed to me, I have no answers. I only have some simple, practical guidelines based on my Indian & US experiences.
India, as a country and a political system, did nothing to bring us where we are on the global technology scene. In fact, most Indians ended up at the MITs and Harvards of America trying to escape their doomed destiny in a country strangled by bureaucrats who could give corrupt Russian chinovniki a run for their money. Just as massive brain drain robbed Russia of some of its finest scientists and professionals, India's best also emigrated to the west for decades. With some belated but simple steps, Indian techno-preneurs were able to turn the intellectual emigration to their own benefit.
Waking up
The Indian government finally woke up to the tremendous economic possibility offered by our educated types. And a reformist finance minister, Manmohan Singh, some 10 years ago changed the course of Indian history. Thankfully, the current rightwing, liberal BJP government is the first one that seems to be doing all the right things for the Indian economy, despite the fact that the party's president was caught taking bribes on tape.
That just goes to show that sectoral growth like in the IT sector, and reform, can take place despite massive corruption, through the cohesive commitment of some entrepreneurs, politicians and even bureaucrats. The Indian federal cabinet of ministers takes IT as a top national priority and the prime minister gave the portfolio of IT to his closest confidante, perhaps the most capable of all his ministers.
Get out of the way
But that does not stop our entrepreneurs and engineers from doing the right thing. The best thing a government can do in India and Russia is to get out of the way. God forbid if government directly decides to help!
There are things that got done in India that must be done sooner or later in Russia for its economy to become competitive and productive. I will go one step further. Such is my faith in the IT sector and the potential of Russian engineers that I think Russia could be a major economic and technological power if it were to focus on its intellectual capital and manpower development rather than oil, gas and minerals.
Here is what I think could be the first steps in that direction:
These are only the first few steps. To many readers they will seem too liberal and perhaps impractical. But I can assure you, the Russian government will eventually have to do this - in 5 years or more - when there will be no other choices. So why not do it today? The proud political power President Vladimir Putin holds today - and which would be the envy of India's parliamentary, 28-party coalition government - can change Russia's fate by these decisive actions and measures. This could be the greatest investment Russia could make in its own economy - and in the future of its people. This is one chance, one break that could change the look and shape of Russia's economic future. It would jerk the country out of oil-dependent stagnation and turn it into a functioning economic system.
The reason for my academic slippage was a Russian mathematician, one by the name of Piskunov. Russian writers had been my childhood heroes. As a teenager, I had memorized Tolstoy, Sholokhov and Dostoyevsky. But now I had acquired a real Russian villain - Piskunov.
Eighth time a charm
His calculus book was part of courses at my engineering school. And even now, I still wake up in the middle of the night in a cold sweat dreaming about the exam I had to take on Piskunov's mathematics. I keep reminding myself that I really did pass that exam - after eight attempts.
During five years of rigorous engineering education - most of which passed me by like a cosmic event - I came across many books on science and technology written by Russians. Our engineering field trips took us to monstrous steel townships, the industrial heart and blood of India, created by Russians. My childhood was spent watching roaring Russian MiG fighters do dogfights overhead. I played games on Russian-built tanks lined-up next to our school. I was born the year our army, using Russian hardware, defeated a massive Pakistani invasion equipped with American hardware. Russian engineering and sciences built our country and saved our young free nation, even while Russian communists drove their own country into disastrous depths of economic destruction.
From a country that should be ashamed of its basic literacy rate (beside a thousand other things, I should add), ironically, Indians today make up well over 40 percent of global software programmers. There's a census under way in India that is likely to reconfirm that more than 60 percent of our people still cannot write their own names. Yet, the Indian software industry and IT business is a story Western and even Russian media never get tired of telling. When my own investments in the Indian IT sector doubled year after year, we ourselves marvelled over the irony of it all. We asked why India had done so well in the business of intellectuals despite being a country of peasants with engineering colleges like mine churning out graduates who would have trouble distinguishing a personal computer from a carburettor.
This, while fine Russian engineers, programmers, scientists, analysts and researchers - whose books and work we worshipped and feared - were living like Indian peasants. What did India do right that Russia did not is a question I am frequently asked. And what is it that Russia can do now to be a technology and software power? Like most other questions posed to me, I have no answers. I only have some simple, practical guidelines based on my Indian & US experiences.
India, as a country and a political system, did nothing to bring us where we are on the global technology scene. In fact, most Indians ended up at the MITs and Harvards of America trying to escape their doomed destiny in a country strangled by bureaucrats who could give corrupt Russian chinovniki a run for their money. Just as massive brain drain robbed Russia of some of its finest scientists and professionals, India's best also emigrated to the west for decades. With some belated but simple steps, Indian techno-preneurs were able to turn the intellectual emigration to their own benefit.
Waking up
The Indian government finally woke up to the tremendous economic possibility offered by our educated types. And a reformist finance minister, Manmohan Singh, some 10 years ago changed the course of Indian history. Thankfully, the current rightwing, liberal BJP government is the first one that seems to be doing all the right things for the Indian economy, despite the fact that the party's president was caught taking bribes on tape.
That just goes to show that sectoral growth like in the IT sector, and reform, can take place despite massive corruption, through the cohesive commitment of some entrepreneurs, politicians and even bureaucrats. The Indian federal cabinet of ministers takes IT as a top national priority and the prime minister gave the portfolio of IT to his closest confidante, perhaps the most capable of all his ministers.
Get out of the way
But that does not stop our entrepreneurs and engineers from doing the right thing. The best thing a government can do in India and Russia is to get out of the way. God forbid if government directly decides to help!
There are things that got done in India that must be done sooner or later in Russia for its economy to become competitive and productive. I will go one step further. Such is my faith in the IT sector and the potential of Russian engineers that I think Russia could be a major economic and technological power if it were to focus on its intellectual capital and manpower development rather than oil, gas and minerals.
Here is what I think could be the first steps in that direction:
- Russia should immediately start to focus on special software and intellectual-property laws - perhaps as a higher priority than land laws themselves - because the results of these regulations I suggest below will be more tangible and productive, within a shorter period of time.
- A 10-year full tax holiday on all individuals and companies in the software-development business.
- The creation of a single-window department for clearance for all (and I do mean all) government-related work for the software industry.
- Give special foreign-exchange breaks to software and high-tech firms to allow them to have overseas offices, buy foreign companies and make overseas joint ventures.
- Give special immigration permission to software firms to employ and contract foreign managers and workers at will, without government approval for salaries in foreign exchange. (That would give them a chance to employ and consult Russian emigres as well. Like the Indian diaspora, that is one of the biggest untapped assets Russia should turn to.)
- Convert existing technology institutes, research institutes and even declassified military industries and institutes into "software/technology parks" with nominal rentals and zero-bureaucracy business creation. People should be able to take a desk, a computer and be in business in minutes - while the "park" deals with all bureaucratic issues. Build Chinese walls between software businesses and bureaucracy.
- Create one or more "techno parks" in every Russian city with a school of higher education and give individuals and companies working in it exemptions on import and excise duties and on social taxes.
These are only the first few steps. To many readers they will seem too liberal and perhaps impractical. But I can assure you, the Russian government will eventually have to do this - in 5 years or more - when there will be no other choices. So why not do it today? The proud political power President Vladimir Putin holds today - and which would be the envy of India's parliamentary, 28-party coalition government - can change Russia's fate by these decisive actions and measures. This could be the greatest investment Russia could make in its own economy - and in the future of its people. This is one chance, one break that could change the look and shape of Russia's economic future. It would jerk the country out of oil-dependent stagnation and turn it into a functioning economic system.