India should insist that global companies transfer technology for hi-tech purchases and build local Intellectual Property, said Arogyaswami Paulraj, professor emeritus in the Department of Electrical Engineering at Stanford University and the inventor of MIMO, a technology that revolutionised high-speed wireless networks globally.
The country should also enable policies that encourage venture capital investments in high technology areas, Paulraj told ET’s Raghu Krishnan on the sidelines of the Synergia Conclave recently. A former Indian Navy officer, he is also actively involved with policy makers to strengthen the country’s technology base.
Paulraj, who established three research labs in India before moving to Stanford, has so far built and sold three technology companies and advises both the US and Chinese governments on technology policies. Edited excerpts:
What are our capabilities in emerging technologies such as 5G?
India has a vast technology workforce working for multinationals such as Qualcomm and Huawei. There is fantastic amount of talent. I built and sold three companies, all of them had backend centres in India. The best wireless chips are built out of India, because there is incredible amount of math that go in there. You can build anything in the world, but if the company is not headquartered here, then you have zero control. Any country gets influence, presence and strength if the company is headquartered there. On that count, in the Information and Communications Technology (ICT) area, India virtually has zero market share.
Is it capital or government policy that is not helping India?
Clearly, the technology talent is here. The one thing that is missing in Bengaluru and Hyderabad is that it also needs skills such as marketing and product management. Those kind of skills, technically, are sitting in the headquarters (of global companies) and India units are only the tech shop.
Why are we at near-zero? There is no effective government policy. Technology is here, not because of IITs. In fact, most of the talented engineers come from often unknown engineering colleges.
One thing missing in India is venture capital. In this high risk business, 80% of companies fail, whether it is in China or in the United States. Technology companies fail because the market is so competitive. One out of ten companies succeeds and makes a whole lot of money; that is how the VC sustains. Making VC money available has not happened and the government has failed with its policies.
What else has India missed in shaping policy?
China never bought technology in general without demanding transfer of technology. It would say — I will buy this jet engine from you Mr Rolls Royce, the next generation of jet engine should have 5% of Chinese headquartered IP. You can start the company, fund it completely, but it is in our jurisdiction. That IP is part of the system, if not I will buy engines from GE. And, they would play one company against the other. All these companies, in order to get market share, would be ready. We have created no (such) mechanism in India. In the last 25 years, we would have bought maybe close to $800 billion worth of high technology stuff, but we have got no transfer of technology. We need to do this properly and we need to hire the best talent to do it for us. We have technology knowledge, but lack marketing knowledge. China today invites people…to work in the country. We should also do that. We should create a city like Shenzhen where hi-tech companies can thrive and learn from an ecosystem.
What about the large Indian IT companies?
Indian IT firms have made enormous money through services. The hi-tech road is very risky. It will hurt their business model as they have to compete with their clients. It is not advisable for them to build products.
How about industry-university collaboration in India? Do you see that happening?
I worked with Professor Anurag Kumar, Director of Indian Institute of Science on the 5G committee for India. Kumar was talking to IIT directors on how to move the needle, as not one idea (in 5G) technology has come from India. The professors told him that what is missing is entrepreneurial zeal. Starting a company is very hard. These people are very comfortable, the government gives the money. In Stanford, I have to fight for every dollar to fund my students. Writing papers is easy, building prototypes and working with hardware is messy and difficult work. Frankly, not much is expected. Ultimately, if the systems are working, people are making money; they (Indian professors) would take risks. Today, the barriers are too high for them to take risks.