CONFEDERATION OF INDIAN INDUSTRY CONFERENCE
NEW DELHI, INDIA
APRIL 25, 2001
"CROSSING TECHNOLOGICAL DIVIDES"
© Copyright 2001 Hewlett-Packard Development Company, L.P
Thank you for such a generous introduction.
All rights reserved. Do not use without written permission from HP.
This is my last day on what has been a truly magnificent trip to India. I have enjoyed my meetings immensely and look forward to the time when I can return to your country to learn more about your unique society, culture and history. I assure you that HP will continue to invest here and that I will return often.
I am particularly honored to address this important group. The Confederation of Indian Industry is well known throughout the world as the preeminent business and economic organization in India.
And India, as we all know, has become one of the countries across which the debate is being waged over the digital and developmental divides. What you think, what you say - above all, what you do - will go a long way to determining how other developing countries and emerging market economies use information and communications technology to grow their economies and alleviate poverty.
THE INFORMATION REVOLUTION
Let me start by providing some perspective on recent events in the United States where the economy is dominating the headlines; it certainly has been a great source of discussion in India as well.
As we all know too well, information technology companies in the United States and around the globe have experienced what is at best described as a year of unsettling economic conditions. The dot-com bubble burst last April. The U.S. economy took a steep and sudden nosedive in November and December. And, since January, we've seen stock prices tumble, earnings drop and economic growth continue to slide.
Recent European market data suggest that the European slowdown is beginning to mirror the pattern we saw in America. And Japan's continuing economic flu has infected Asia.
Despite all of this bad news, if we step back and take a broader perspective, it's clear that we are living through a true Information Revolution - one that has fundamentally altered not just business practices but also the way of life for billions of people across the globe.
In recent months, we have seen the IT industry weather a rough storm that is ongoing. But it would be foolish for any of us - as individuals, as heads of corporations, as public-spirited leaders - to underestimate the potential long-term implications of the Information Revolution.
THE INFORMATION OPPORTUNITY
Clearly, you and the other leaders of India understand this and are working hard to transform India into a global economic superpower.
You understand the need to make the economic reforms that are preconditions to healthy growth: a budget that rationalizes taxes and can stimulate the domestic economy; continuing privatization; and trade liberalization that continues to strengthen competition, promote deregulation and lower cost structures.
Obviously, a lot of hard work remains, and politics everywhere always has the potential to thwart reform. But the path you've chosen is the right one.
It's even more obvious that Indian corporations and companies have made the right choice. By your deeds and words, you're choosing to compete - regionally, nationally and globally. And that will only make India's economy and its people more vibrant and powerful in the decades ahead.
Above all, it's clear to me as the CEO of an IT company that you understand deeply the potential of the Internet and its role in accelerating the Information Revolution.
Take Moore's Law or Metcalfe's Law. Take whichever information technology "law," and the message is the same: This is a revolution that's not ending any time soon. The scope of change is wide. The pace of change relentless. And change is altering not just our companies but our communities and countries as well.
It's clear that technological change can develop a momentum of its own - widening not only the digital divide but the social or economic divide as well. But it's equally clear that technology can help communities and countries "leapfrog" aspects of development. Wireless communications can obviate the need to lay thousands of miles of copper wire. A village can reach deeper, richer markets for its goods through mobile links to the Web. Cooperatives can band together electronically to increase their purchasing power.
But while debates over the digital divide are important, you, perhaps, like me, have found some of them divorced from the day-to-day realities of running your business. So let me discuss what we're doing at HP to develop a new program that both helps bridge the digital divide and presents opportunities for new business.
WORLD E-INCLUSION PRINCIPLES
Last October, we announced World e-Inclusion. This is HP's initiative to target the 4 billion people who are seldom, if ever, served by traditional information technology companies.
Around the world, HP is known as a company that has been built to last. That means we stay true to our values of trust, respect, integrity, teamwork, collaboration and contribution to customers and communities. Especially in tough economic times it is important to stay true to these values. It's not enough just to cut costs. Growing profitable revenues is even more important. And we understand the need to redouble our efforts to find new revenues one, three, five and 10 years down the line. World e-Inclusion is part of that long-term effort.
Since our company was started by Bill Hewlett and David Packard in 1938, we have always believed that we can both do well economically and do good socially at the same time - in other words, inventing for the common good. We believe World e-Inclusion is a great example.
We assume that in a business and economic environment characterized by increasing globalization and growing interdependence, it would be foolhardy not to explore business opportunities in regions that comprise the majority - two-thirds - of the world's population.
Of course, as you know, economic growth rates for the developing countries over the next three years are forecast by the World Bank to be anywhere from 1.5 to 2 times that of the OECD countries. And, as of last year, spending on information technology in emerging market economies was growing at twice the rate of spending in the industrialized world, although it started from a lower base.
We consider World e-Inclusion to be a long-term strategic investment in advancing HP's global competitiveness. Yes, it's about doing well, but it's also about doing good. At HP, we're constantly asking ourselves, Where will ideas come from? Where will talent come from? And where will markets come from? And the answer is, from far beyond Silicon Valley.
From our dialogue with leaders and thinkers in developing countries, we realize that business opportunities will not resemble those we pursue in our traditional markets. Consequently, World e-Inclusion is as much about testing and refining a business development program as it is about anything else, and we are growing it sensibly and systematically for the long haul.
This program focuses on those populations in emerging market economies that historically have had little access to information technology. In these economies - what in most cases could just as easily be called the excluded market economies - our World e-Inclusion program is guided by three principles.
IT'S ABOUT PEOPLE, NOT TECHNOLOGY
First, World e-Inclusion is fundamentally about the needs and wants, desires and aspirations of people - not technology.
Today, many people see technology as the problem behind the so-called digital divide. Others see it as the solution. Our view is that technology is neither. Technology must operate in conjunction with business, economic, political and social systems. If the "fit" is wrong and systems don't mesh properly - and this is true whether you are in Silicon Valley or in the most remote village in India - then it doesn't matter how advanced the technology is. It simply won't work.
That's why we're emphasizing the people side of the equation - the need to get close to these new potential customers, partners and, I might add, employees and inventors. A former American congressional leader, the well-known Tip O'Neill, always said, "All politics is local." Well, for information technology today, all solutions are local. Technology simply must be appropriate and relevant to the unique needs of these populations.
That's why we realize the requirement to work with local partners, peoples and communities to determine which technologies make sense. In other words, we need to do in this context what we do worldwide: focus on total customer experience.
In Central America, HP has entered into a strategic cooperation agreement with the Foundation for Sustainable Development of Costa Rica - led by former President Jose Maria Figueres Olsen - to develop and implement telecenters for villages in remote areas without traditional infrastructure. Housed in recycled shipping containers, these telecenters - called Little Intelligent Communities (LINCOS) - are satellite-operated, solar-powered and equipped with HP hardware and high-speed Internet connections. We are exploring opportunities to bring telecenters to other parts of the world, including India.
WORKING WITH LOCAL PARTNERS
The partnership imperative is the second principle of World e-Inclusion. HP has always worked with local partners when operating globally. We know we cannot do it alone - that others can bring knowledge, experience and skills that are critical to discovering new business approaches, cultivating markets and growing profitable revenue streams for the long term.
Our vision includes a rich ecosystem of partners - some global, most local; some public sector, most private - all driven by an interest in harnessing technology for economic growth in new markets. These partners will include global corporations, local companies, national and local governments, international development agencies, grassroots organizations and NGOs, and individuals.
For example, in Senegal we are partnering with Joko Inc. to develop community technology centers in low-income urban and rural areas that will sell an array of e-services. Rather than coming in with a predefined set of services, we asked the communities to identify their needs, whether for computer training, e-mail and word processing, or for other business services like access to credit, information about crops and pricing, or help selling handicrafts online. We also asked them to help us develop the sustainability model.
In Bangladesh, we are partnering with Professor Mohammed Yunus' Grameen Bank and with communities across the country. The Grameen project is developing village telecenters with an initial focus on telemedicine and the efficient transfer of funds, especially for individuals and small businesses.
THE SUSTAINABILITY FACTOR
Finally, our third principle is sustainability. We have to ask, If the money leaves, will the project remain? Will economic value be created into the future?
World e-Inclusion does not make economic sense if it is built around one-shot sales of "boxes" or PC hand-me-downs to developing countries. It will only make business sense if we can devise appropriate information solutions that work reliably over long time frames.
With a market measured in grossest terms at 4 billion people, each source of revenue can, through the law of large numbers, produce a significant stream for HP and our partners, most of whom we expect to be regional companies and local entrepreneurs.
Just as importantly, we know that over the long term, creativity, invention, innovation, intellectual capacity and economic capability are not limited by national borders. Opportunities in the digital economy can exist wherever people exist.
Sustainability, however, has more than a business and economic dimension. Sustainable solutions and models will need to respect social and cultural mores and regional and local idiosyncrasies. They will need to draw power from diversity and affirm openness and freedom.
The technologies we develop with our partners will look, work and feel radically different. But we know that these technologies must be appropriate and relevant to the needs of these underserved populations. They will also have to be reliable and rugged, as many of them will be used in harsh conditions where any hands-on customer service may be days away. Energy efficiency may well become the linchpin for deciding which technologies truly work for the needs of the populations we're targeting.
We also expect payoffs to our traditional businesses. Our hope is that the inventions and innovations that are energy efficient and environmentally sound that emerge from our labs in India can also be transferred to our more established markets.
HP's World e-Inclusion program is focusing on the major challenges that face countries trying to fully integrate into the Information Age: the requirement for physical connectivity to all their citizens and the demand for information solutions. Also, each country needs to develop a national information and communications technology infrastructure and policy to transform its institutions and to take advantage of its unique internal strengths, talents and human capital as well as its global position.
No country - whether in the developing or developed world - can neglect these requirements. Indeed, addressing them simultaneously creates synergies that can accelerate a country's shift into the Information Age.
At HP, we are specifically working on three broad categories as information solutions: social, commercial and consumer. We believe that we can build businesses and make a difference in each.
In the first category, we are targeting health care, education and training, and e-government.
We're examining health-care solutions because an individual's good health is an obvious prerequisite to moving out of poverty and becoming an economically productive member of any society.
In India, for example, we're pursuing a telemedicine project in Siliguri in West Bengal. Siliguri is a remote town in the foothills of the eastern Himalayas. It has limited access to medical facilities and no access to specialists like cardiologists or cardiothoracic surgeons. Patients are required to travel overnight to Calcutta to see a specialist, and even then appointments are not certain.
The government is outfitting a hospital in Siliguri with X-ray and ultrasound equipment, ECG machines, and catheterization labs. The Asia Heart Foundation is training medical technicians. They will run tests on patients in Siliguri on these new machines. The data will be transmitted via the Internet and read by specialists in Calcutta. With more than 60 percent of India's population living in villages, this approach will provide better medical care in an economically efficient manner.
HP will help initially by providing expertise around deploying technologies for optical image compression without loss of image integrity. This leverages work being done currently in the area of streaming media. We are also working to develop optimal data-capture devices. We plan to catalyze the broader growth of telemedicine by adding value through technological invention and innovation.
We are also focusing on education and training - distance learning should revolutionize education worldwide, both in the developed and developing world.
We have already undertaken e-government work in Europe and Latin America and now realize how critical it can be for World e-Inclusion. Governments manage a disproportionate share of the economy and wealth in the developing world, and assistance from multilateral institutions and overseas governments also plays a critical role.
Economic and political reforms remain as essential as ever. But governments in the developing world need to use the Web, Internet and new technologies to reinvent their public sector systems systematically, particularly in terms of delivering services to the underserved. This clearly requires local initiative, both public sector and private, and we plan to be an active partner in finding solutions.
In the category of digitally based commercial applications, we're emphasizing e-jobs, market access and financial services.
First, we're interested in projects that will develop jobs that telecommute "globally," for example, allowing a worker in Chennai to collaborate with someone in Tel Aviv for a company in Mexico City.
This aspect of the Web - enabling the best minds to work on high-value projects across the globe while maintaining their family, social and cultural ties at home - begins to fulfill theoretical economic principles of pure, friction-free labor mobility. For example, we are partnering with a local company in Mumbai to provide e-mail support for our customers in North America. We are looking to expand these e-jobs opportunities in India and around the globe to people outside the traditional category of urban, middle-class citizens.
E-jobs are closely related to another commercial focus: enabling access to the broadest markets possible. One of the greatest advantages of the Web is that it is truly global and can give the smallest, most remote business access to vast markets, whether it's for products such as handicrafts or for services it provides.
Here in India, we're working with the TENET group of the Indian Institute of Technology, Madras, to expand Internet connectivity in rural villages in Tamil Nadu.
Financial services is the final applications area that our World e-Inclusion team is pursuing in the commercial business sector. We are especially interested in microcredit applications, remittances and insurance.
In consumer applications, HP is focusing broadly on communications, namely e-mail, voice mail and short-messaging services. In addition, we will be pursuing entertainment and digital culture applications. For example, solutions that would allow local artists and artisans, musicians and storytellers to find broader audiences for their work.
HP's initial efforts with World e-Inclusion have shown us both the difficulty and magnitude of putting these ideas into practice. Yet, far more importantly, we've been energized by the passion and commitment of many partner companies, local organizations and our own employees.
Nowhere is this more true than here in India: We've found energy and enthusiasm wherever we've gone.
WORLD E-INCLUSION AND HP LABS INDIA
We are now expanding our industry-leading worldwide research laboratories with our new HP Labs India to support our World e-Inclusion initiative. The mission of HP Labs India is to generate innovations targeted at the world's emerging economies by deeply understanding the confluence of relevant social, cultural, economic and technological drivers.
The labs will focus on economically and culturally appropriate access devices, language localization and connectivity solutions in India with an intent to broaden their reach.
India is an ideal place for HP to establish this new lab for a number of reasons, including HP's strong existing presence, the large number of talented Indian computer scientists, the enormous cultural and geographic diversity, and the dramatic economic changes of the last decade.
We are setting up HP labs in three locations. In Bangalore, we will set up an e-Inclusion Lab at our software operations facility. We will also serve as an industry partner on the campus of the Indian Institute of Science at the end of the year. In Chennai, we will sponsor a joint lab in the Electrical Engineering Department of the Indian Institute of Technology, Madras, that will open this summer.
Colocating our labs on the campuses of leading Indian academic institutions allows HP to partner with a wide variety of researchers. They are already working on indigenous technologies that can be applied to meeting the needs of India's growing middle class and its rural, primarily agrarian-based population.
To ensure that the solutions we invent are economically and culturally sustainable, our labs will employ sociologists and economists in addition to computer scientists.
There is a great deal of work that is currently being done in this country by the government, nongovernment organizations, developmental aid agencies, and private and public sector enterprises, as well as by individuals. We are in the process of building alliances with several of these players, partnering with them to deploy pilots in the country in order to test some hypotheses around using information and communication technologies as key levers for sustainable development, rapid learning and appropriate scalability.
LEADERSHIP IS THE DIFFERENCE
This brings me to leadership. For without leadership, no progress is possible. Without leadership, we will cross no technological divides. We will overcome no developmental barriers. And no program - however well-conceived - will leave any kind of worthwhile legacy.
Leadership is no longer about command and control. It's not about hierarchy or title or status. It's not about finding blame. Leadership is about making a difference, creating positive change. It's about getting things done and getting rid of everything else that doesn't contribute. It's about encouraging, enabling and empowering every employee, every worker. It's about reinforcing core values, articulating a vision and then setting people free.
Leadership is about trust. It's about giving authority back to where it belongs. In the case of HP, leadership is giving authority to the inventors who understand the technology, to the team members whose personal relationships build the business partnerships and to the salespeople who know the customers. And in the case of World e-Inclusion, it is about giving authority back to the communities who know their problems and their aspirations.
We are entering an era in which every man and every woman is born with the potential to lead. Leadership is about working with others to create a world where peoples' minds and hearts can be inventive and brave, human and strong; where people can aspire to do useful and significant things; and where people can actually change the world.
It's a world where ordinary men and women can ignite a never-ending revolution.
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