As India’s IT industry matures, it must leverage the birthing of its defence industry to create millions of jobs
India has two advantages: the changing character of warfare and its software ecosystem. Photo: Bloomberg
The schadenfreude (German for joy in other people’s misery) about the Indian IT industry peaked with the last quarterly results of the major players; a particularly dim article in the foreign media was titled “Indian Software Died Today”. Only a fool would deny that the India’s IT services industry is moving from the hormonal exuberance of adolescence to the cruising speed of adulthood but predictions of its demise or peaking at three million jobs are premature given the many horizons that are emerging: all hardware now needs a software layer; India’s clustering, critical mass and externalities in software rivals China’s in manufacturing; India produces more engineers than China and the US combined, so captive software centres beyond the FANG (Facebook, Amazon, Netflix, Google) like Uber, Airbnb, Expedia, KPMG, J.P. Morgan, etc., are exploding as companies decide technology is a core competence.
We make the case for another opportunity: combining the middle-age of India’s IT services industry with the birthing of the India’s private defence industry. Upsides include jobs, defence self-sufficiency, and an innovation ecosystem.
The technology-defence virtuous cycle is epitomized by the US. Global positioning systems were conceived for missile guidance systems. The Internet, sensor technology, drones, 3D printing, driverless cars, and Apple’s voice-recognition technology—all have roots in department of defence funds. The defence innovation fund mandated with funding high-risk and high-payoff technology counts Google’s Eric Schmidt and LinkedIn’s Reid Hoffman as board members. At the height of the Cold War, the US government accounted for nearly 50% of every research dollar globally; even now, the $72 billion it invests in R&D is more than double of what Apple, Intel and Google spent last year combined. Israel’s lead in cybersecurity was midwifed by its army and now the world’s largest supercomputer resides at China’s National Military University.
Late to the party, India has two advantages: the changing character of warfare and its software ecosystem. The first is obvious. What matters in war is not large forces or heavy firepower but information dominance. This needs a network of networks which acquires enormous amounts of information about the battle space and the adversary, mines it real-time, and enhances capability of the men behind the machines by translating information into effective military action.
Some of this network of networks—drones, big data, database administration—already exists but the frontiers of human machine interface need to be pushed by advancing bio-robotics, machine learning, and accelerating human cognition (both for soldiers on the front lines and intelligence analysts in the rear).
This needs blurring the boundaries of hardware and software. We want to fence the Line of Control (LoC) but what we need is a state-of-the-art information system, overlaid on the area from the LoC to the hinterlands, that will act as a force multiplier and lower brute manpower numbers. Similar intelligence, surveillance and reconnaissance efforts fused with massive data collection and data-mining operations will be critical in urban area operations of the kinds we saw in Kashmir.
The Prime Minister’s identification of defence as one of the pillars of Make In India sets up things for convergence; the IT industry is a willing partner but defence research, funding, procurement, and human capital needs policy and institutional change. Currently defence R&D is concentrated in the Defence Research and Development Organization’s (DRDO’s) labs—which are not ready for information-driven warfare.
For funding, we need an organization modelled on the US Defense Advanced Research Projects Agency that will identify and fund frontier defence technology research—the polar opposite of the current DRDO model. This agency will take early-stage bets in dual-use technologies and identify 10 universities and 10 private-sector entities to partner with.
In procurement, we need public-private partnerships; our huge spends can catalyze the industry.
The worries about a close relationship between defence spending and the private sector creating crony capitalism on steroids are valid but tactical; think of the fall in wholesale corruption in coal and telecom spectrum. There will be accidents as we put in place a new model synergizing defence and technology, but these will not be birth defects.
Finally, human capital: we need to create the board proposed in the 2002 Group of Ministers report with representatives from government, academia and private industry. We also need lateral entry into government as the state’s ability to look ahead at the new frontiers of warfare, technology and military organization needs specialization.
People will correctly worry about government directed private defence funding being industrial policy; we’ve seen that movie before and know how it ends. But if there was ever an area ripe for “The Entrepreneurial State” advocated by Mariana Mazzucato, it is defence.
It’s not clear whether the hacking of US Democratic Party emails happened or Indian ATM cards came from Russia or Pakistan, but it is clear they originated overseas and represent one future of warfare. General George S. Patton reminded us that wars are fought with weapons but won by men; India has a unique chance to reboot both.
Srinath Raghavan and Manish Sabharwal are, respectively, with the Centre for Policy Research and Teamlease.
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