Debjani Ghosh took over as president of IT lobby NASSCOM in April this year. In the short span of six months, the former managing director for Intel in South Asia has engaged with a number of hot-button issues heralded by the new digital economy such as data privacy, localisation and security.
In an interaction with TechCircle on the sidelines of the NASSCOM Product Conclave in Bengaluru, Ghosh discussed her views on protectionism, the state of early-stage funding in India, and the future of emerging technologies.
Data protectionism has become important in the political discourse even as it is being branded as the new oil. What is your view?
Yes, that is the new norm. The digital world is going to be very different from the physical world we lived in. We are going to see new regulatory frameworks, not just in India but across the world. Data is not going to be about IT, but will define trade. So companies — countries rather — will have to figure out their data strategies.
But innovation is equally important. In order to fuel innovation, free trade of data is going to be very important. At the same time, you will need certain data of the country which is important for security — both national and citizen security.
We have to stop generalising data. There is no one data, and when we look at it, we need to see its classification. There is a certain set of data that causes risks to national security and it is important for the country to ensure that this data gets protected, whether it is stored here or in the safest place.
Then there is sensitive data like the financial data, that you are able to use to innovate and provide services to the consumer, while at the same time ensure that its security is taken care of. There will be regulatory framework to protect your security while you use this data to get services.
Then there is data that can be used for research, trade and innovation, where I think the government should not have any role.
How will this impact businesses?
Businesses have to adapt and understand where they operate and whether these are super-sensitive data that has implications for national security. It will be stringent and there will be checks and balances in place to ensure that data is not compromised at all.
If the businesses are working on sensitive data, where security is important, building that into your basic design principle is the way ahead as they build out the business, and cannot be seen as something to think about later. It is going to be fundamentally important.
We focus on the tactic rather than the end goal, and the focus needs to be on security. Businesses would not compromise on that.
We have seen a flat growth in early-stage investments and a decline in seed investments. But VCs are sitting on huge funds they have raised for India. Where do you see the gap?
I don't see a gap in early-stage funding. The startup report was 99% positive, still you picked up the one negative aspect. Let me focus on the positives. The fact that the Indian startup ecosystem is growing at 12-13% is a positive sign. The fact that we are now officially the third-largest ecosystem (in the world) and our advanced-tech startups are growing at 50% annually is positive. (The fact that) women entrepreneurs nearly doubled year-on-year is positive.
Overall, funding is growing and the pipeline is healthy. Seed-stage funding has been declining for the last two years. It happens everywhere in the evolution of startup lifecycle. Investors will focus on consolidation and want to see mature companies getting money.
In the case of an evolved startup ecosystem like ours, we need a structured approach to look at the seed stage. It is not about funding alone, which is a small part of it. This has to be about mentoring, about building the capabilities and capacities. It is a good signal indicating that we need to move fast to ensure that the pipeline does not dry up and there are enough early-stage startups because that is where innovations happen. It is an "and" story and not "either or".
Barring e2e Networks, which went public in NSE Emerge, not a lot of tech startups, especially in the business-to-business segments, are going for IPOs, where there are lesser restrictions now. Why do you think that is happening?
Whether you go for an IPO or not is a business reason. There has to be a need for that. Until there is a need, I don’t see why a startup should go for an IPO because it does not make sense for them.
We are at the stage where there is a lot of funding available to startups. Being private gives them the freedom to focus on growth, experimentation and innovation. I am not worried about that now.
Do you think the IT spend in India is too low? Is that the reason why we don't see a lot of large B2B companies emerging in India? Silicon Valley is full of such companies founded by Indian-origin entrepreneurs...
You have to stop applying the old lens to today's ecosystem. If we keep applying the old lens to measure success and failure in today's world, you will only see failure.
You have to look at what is going to be critical. If artificial intelligence is the new electricity of the world, what are some of the areas that are going to be absolutely critical for India. Data analytics, augmented reality/virtual reality, blockchain beyond fintech in agriculture and enterprise, and cybersecurity are absolutely important and have huge potential for India. The fact that we are seeing a positive and healthy growth in all these segments tells you we are on the right path.
NASSCOM has partnered with a lot of state governments to come up with centres of excellence in the emerging technologies sector. How is that going?
I think it is important to build the talent capabilities for new technologies and the jobs that will be created. That is job one for NASSCOM. We have the Future Skills initiative, which has a bold agenda to train over two million people in the next four to five years or reskill the IT sector employees.