Information Systems: Debates, Applications and Impacts 2018055904, 9781138061941, 9780429202933

Table of contents :
Cover
Half Title
Series
Title
Copyright
Contents
List of figures
List of tables
Foreword
Preface
Contributors
1 Information systems in India: dare to cross
Part 1 Technology in action: an Indian perspective
2 Automation and computers: hasten slowly
3 Information and communication technologies in India: outweighing negatives in development
4 Information and Communication Technology (ICT) in India: a reality check
Part 2 Adoption of technology: issues and challenges
5 E-Government in India
6 Internet based distribution systems: a framework for adoption
7 Trust and its determinants in internet banking: a study of private sector banks in India
8 Structuring IT function: imperative for the new millennium
Part 3 Behavioural issues in the IT industry
9 Collaborative tools and virtual team effectiveness: an inductive approach in India’s software sector
10 Turnover intentions amongst women BPO professionals: role of organizational and personal factors
Part 4 Systems theory-based methodologies
11 The system dynamics paradigm
12 System dynamics: applications in management and policy
13 Option trading in a fuzzy framework
Part 5 The challenges of electronic globalization
14 Borderless bits: electronic globalization in a volatile global world
15 The classical continuity of electronic globalization
16 Preparing for electronic globalization

Citation preview

Information Systems

This book captures a range of important developments that have occurred in Information Systems over the last forty years, with a particular focus on India and the developing world. Over this time, Information and Communications Technology (ICT) and Information Systems (IS) have come to play a critical role in supporting, complementing and automating managerial decisions, shaping and transforming industries, and contributing to deep societal and economic change. This volume examines a range of topics for those interested in the adoption and use of these technologies across varied situations. It combines empirical studies on the application and impact of IS with commentaries, debates and insights on the transformative role that IT and the IT industry have played, and continue to play, within India as well as globally. The book draws attention to issues and challenges that organizations grapple with in tech-enabled environments, and provides insights on the role of automation and computational techniques. It explores the global impact of the technology revolution on economic growth and development, electronic globalization, and the wider opportunities and challenges of a hi-tech world. The chapters cover various themes such as e-government in India, internet-based distribution systems, internet banking, and use of collaborative IT tools and functions to support virtual teams in the software industry and the business process outsourcing industry. Other chapters focus on methodological advances, such as systems thinking which finds applications in organizational decision-making, and the use of fuzzy logic. This volume will interest professionals and scholars of information technology and information systems, computer studies, IT systems, economics, and business and management studies.

Priya Seetharaman is Associate Professor of Management Information Systems at the Indian Institute of Management, Calcutta, India. Her primary research areas include Information Technology (IT) governance; IS/IT strategy; healthcare IT; adoption, use, evolution and impact of IT on organizations and society. Her papers have appeared in several journals including the Journal of Management Information Systems, Information & Management, Computers in Human Behaviour, Online Information Review, and Technological Forecasting and Social Change as well as in Information Systems conference proceedings. At IIM Calcutta, she has been handling postgraduate and doctoral courses on IS planning, IT governance and business process management. Jocelyn Cranefield is Senior Lecturer at Victoria University of Wellington, New Zealand. Her research focuses on knowledge management, online communities in change settings, the sharing economy, smart sustainable cities, and the ethical management of IT. She has published in journals including the Journal of the Association for Information Systems, Communications of the Association for Information Systems, Online Information Review and Journal of Knowledge and Process Management apart from conference proceedings. She is co-editor of the book Social Knowledge Management in Action: Applications and Challenges (2017). She has led the development and delivery of a master’s programme for IT managers, and teaches courses including IT and the new organization, strategic information systems management, knowledge management and information policy.

Advances in Management Research General Editors: R. Rajesh Babu,

Indian Institute of Management Calcutta and

Manisha Chakrabarty,

Indian Institute of Management Calcutta

The Advances in Management Research cluster, a joint initiative of the Indian Institute of Management (IIM) Calcutta and Routledge, brings select issues and developments in management research and practice into the public domain. Thematically arranged volumes in this cluster will further insights on innovative research and cover crucial aspects ranging across management disciplines. The books will be of great interest to management students and researchers of international business and management studies, organisational learning, operational management, technology adoption, financial integration and other related fields. Researching Marketing Decisions The Indian Context Edited by Ritu Mehta Information Systems Debates, Applications and Impacts Edited by Priya Seetharaman and Jocelyn Cranefield

Information Systems Debates, Applications and Impacts Edited by Priya Seetharaman and Jocelyn Cranefield

First published 2019 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 52 Vanderbilt Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2019 selection and editorial matter, Indian Institute of Management Calcutta; individual chapters, the contributors The right of Priya Seetharaman and Jocelyn Cranefield to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Seetharaman, Priya, editor. | Cranefield, Jocelyn, editor. Title: Information systems : debates, applications and impacts / edited by Priya Seetharaman and Jocelyn Cranefield. Description: Abingdon, Oxon ; New York, NY : Routledge, 2019. | Includes bibliographical references. Identifiers: LCCN 2018055904 | ISBN 9781138061941 (hardback : alk. paper) | ISBN 9780429202933 (e-book) Subjects: LCSH: Information technology—Economic aspects. Classification: LCC HC79.I55 I5369 2019 | DDC 338.9/26—dc23 LC record available at https://lccn.loc.gov/2018055904 ISBN: 978-1-138-06194-1 (hbk) ISBN: 978-0-429-20293-3 (ebk) Typeset in Sabon by Apex CoVantage, LLC

Contents

List of figuresx List of tablesxi Foreword by Suprateek Sarkerxiii Prefacexv Contributorsxxvi   1 Information systems in India: dare to cross

1

PRIYA SEETHARAMAN AND JOCELYN CRANEFIELD

PART 1

Technology in action: an Indian perspective31   2 Automation and computers: hasten slowly

33

RAMACHANDRAN NATARAJAN

  3 Information and communication technologies in India: outweighing negatives in development

61

P. VIGNESWARA ILAVARASAN

  4 Information and Communication Technology (ICT) in India: a reality check

71

PARTHA RAY

PART 2

Adoption of technology: issues and challenges85   5 E-Government in India RAHUL DÉ

87

viii  Contents   6 Internet based distribution systems: a framework for adoption

109

DURGESH K. AGRAWAL, DEV P. AGRAWAL AND DEEPALI SINGH

  7 Trust and its determinants in internet banking: a study of private sector banks in India

141

RAJEEV KUMRA, R. K. MITTAL AND LAXMI GUNUPUDI

  8 Structuring IT function: imperative for the new millennium

159

MOHD. NISHAT FAISAL

PART 3

Behavioural issues in the IT industry181   9 Collaborative tools and virtual team effectiveness: an inductive approach in India’s software sector

183

NIHARIKA GAAN

10 Turnover intentions amongst women BPO professionals: role of organizational and personal factors

210

DEEPAK CHAWLA AND NEENA SONDHI

PART 4

Systems theory-based methodologies245 11 The system dynamics paradigm

247

PRATAP K. J. MOHAPATRA AND PURNENDU MANDAL

12 System dynamics: applications in management and policy

273

RAHUL ROY

13 Option trading in a fuzzy framework SRIDEV RAMASWAMY AND RAMASUBRAMANIAN SUNDARARAJAN

287

Contents ix PART 5

The challenges of electronic globalization311 14 Borderless bits: electronic globalization in a volatile global world

313

NIKHILESH DHOLAKIA

15 The classical continuity of electronic globalization

336

ANINDYA CHAUDHURI

16 Preparing for electronic globalization BIJU PAUL ABRAHAM



352

Figures

6.1 Distribution systems in the e-environment 111 6.2 Product characteristics grid and Internet based distribution systems 125 6.3 Consumer sensitivity grid for adoption of Internet based distribution systems 127 6.4 Role of intermediaries grid for adoption of Internet based distribution systems 129 6.5 Distribution profile grid for adoption of Internet based distribution systems 130 6.6 Consumer purchase value maximization and Internet based distribution system 139 7.1 Antecedents and outcomes of trust 145 9.1 Virtual team effectiveness model 202 10.1 The model 224 11.1 Feedback loop 258 11.2 Goal-oriented structure 259 13.1 Trapezoidal fuzzy set 292 13.2 Moving average with lag and differencing 298 13.3 Fuzzy numbers used in Case 1b 302 15.1 Eastern Telegraph Co. system and its general connections343 15.2 Internet undersea cable map 344

Tables

4.1 A typology of IT services and IT-enabled services (ITES) 73 4.2 Falling costs of computing (US$) 74 4.3 Software services exports from India with components (Rs. billion) 75 4.4 India’s current account of balance of payments (USD million) 2015–16 76 4.5 Ten major exporters and importers of telecommunications, computer and information services 77 4.6 Trends in GDP of computer-related services 78 5.1 Selected e-government projects from India 93 5.2 Summary of issues for analysis of cases 99 6.1 Importance of various dimensions of consumer purchase decision 119 6.2 Role of intermediaries in various industrial sectors 121 6.3 Distribution profile of enterprises of various product categories124 6.4 Consumer sensitivity attributes 126 6.5 Role of intermediaries and value addition attributes 128 6.6 Strategic framework for adoption of Internet based distribution systems 132 7.1 Reliability and validity results 149 7.2 Intercorrelation results of trust and its determinants 152 7.3 Regression results 153 8.1 Classification scheme for IT function structure 163 8.2 Types of cloud architecture 169 9.1 Key conceptual categories 190 9.2 Perceptions on demographic dissimilarity 193 9.3 Demographic dissimilarity – influence on virtual team effectiveness 195 9.4 Perceptions on collaborative tool selection 196

xii  Tables 9.5 Criteria for selection of collaborative tools 198 9.6 Criteria for selection of collaborative tools – influence on virtual team effectiveness 199 9.7 Perceptions on standardization, process orientation, and swift trust 201 10.1 Classificatory ability of logit model for BPO executives 230 11.1 Problem solving stages and the associated viewpoints 270 13.1 Vanilla call option 300 13.2 Fuzzy stock and strike prices in the Black-Scholes formula301 13.3 Impact of implied volatility on crisp and fuzzy option prices 304 13.4 Impact of time to expiry on crisp and fuzzy option prices 307

Foreword

India’s contribution to the Information and Communication Technology (ICT) revolution is globally acknowledged. Yet, the Indian scholarly perspectives on the growth of ICTs in business and society, on the bright and dark side of such growth, on its economic and social impacts and on the challenges of harnessing the opportunities afforded by the ICTs in an equitable manner are largely unknown to the global Information Systems (IS) research community (also referred to as the IS discipline). This anthology, with articles drawn from contributions published between 1989 and 2012 in Decision, the ‘flagship journal of the Indian Institute of Management Calcutta’, and suitably revised, represents an important contribution in capturing some of the key themes in the discourse on ICTs in Indian academic literature. It provides a window into the thinking of Indian scholars who were in a great position to observe and reflect on the changes in the industry, educational systems, society and the nature of e-globalization that was unfolding during this period. As the co-editors of this anthology discuss in their opening chapter, the articles in the book can be related to five broad themes: automation and computers, application of ICTs in diverse contexts, ICTs and human behaviour, alternate paradigms and approaches applicable to ICT research and problem solving, and electronic globalization. While I leave it to the readers to learn about the specific arguments and findings presented in each of the articles, I would like to make three general observations for readers to consider: (1) the collection highlights the immense diversity of work discussing ICT-related phenomena, in terms of research paradigms, theoretical perspectives, methodologies, levels of analysis, instrumental versus humanistic focus and the disciplines contributing to discourse in this area, apart from the technological fads and novel topics that appear with unfailing frequency; (2) such diversity poses both an opportunity and a challenge of the

xiv  Foreword Information Systems discipline: the opportunity to learn from and adapt lessons from many disciplines and traditions and to contribute back to them, and the challenge of articulating what precisely constitutes the discipline’s core, its key characteristics and its boundaries, and maintaining a coherent body of knowledge which bears the signature and distinctiveness of the community of Information Systems scholars; (3) as mentioned by most authors who were asked to update their work for this book, a good proportion of their original arguments and propositions about ICT phenomena appeared to hold for today’s context, with modest changes needed. This suggests the importance of abstraction of knowledge about ICT phenomena – not just focusing on technological trends but on more abstract enduring patterns that transcend specific technologies or innovations – and the need to learn from the past rather than to assume that each wave of disruptive technology represents a complete disruption in knowledge thereby presenting the need to develop knowledge about new ICTbased phenomena from scratch. To conclude, I congratulate the co-editors Dr. Priya Seetharaman and Dr. Jocelyn Cranefield, two thoughtful scholars, who I presume have brought ‘insider’ and ‘outsider’ perspectives respectively to this project, on their successful collaboration. I have no doubt that Ph.D. students, reflective practitioners and researchers around the globe with interest in ICT-related phenomena will appreciate the edited collection. Happy reading! Suprateek Sarker Rolls-Royce Commonwealth Professor, McIntire School of Commerce, University of Virginia, USA

Preface

शqूषा वणं चैव हणं धारणां तथा । ऊहापोहोऽथ िवाानं ताानं च धीगुणाः ॥ Willing to listen; to actually listen; to understand what we are listening to; to be able to remember what we have listened to; to be able to deduce and argue; to formalise and conclusively put forth thought; possess knowledge; and understand the philosophy – these are the eight facets of wisdom.

In a foreword to a recent book, legendary Information Systems academician Warren McFarlan fast forwarded through sixty years of information systems (IS) in the management discipline. While outlining examples of organizations which have been transformed through their use of information technology, he pointed out that some of the best practices related to information technology in organizations are an ‘amalgam’ of the old and the new lessons (McFarlan, 2016). It only seems apt that a compendium of articles on information systems – debates, applications and impact – draws from both the old and the new lessons, perspectives and theoretical stances in the discipline. To this extent, this book aims to provide readers with an awareness of the enduring value and relevance of taking high-level analytical and critical perspectives when set against a backdrop of inexorable societal and technological change. This volume is inspired by forty-three years of publication of Decision, the flagship journal of the Indian Institute of Management, Calcutta. Decision’s uniqueness is manifested in its positioning as an overarching management journal focused on diverse facets of managerial decision making. In this era of extreme specialization, the value of the generic view of managerial decision espoused by Decision is to

xvi  Preface understand, analyse and aid, in an academic fashion, a wide range of organizational decisions. Despite the significant evolution of managerial decision making across time, information has continued to remain the keystone of such decision making, yielding structure, intensity and certainty to the process. The importance and role of information systems and technology in automating, supporting and complementing managerial decisions in contemporary organizations can hardly be exaggerated. The digitalization of organizational environments, especially in large organizations, has been driven by a combination of the opportunities technology provides and the ability of organizations to absorb and utilize this potential, while meeting diverse and continual demands for transformation from both within and outside the organization. Individual use of information technology devices and applications is similarly rooted in the opportunities presented to us, our capabilities and motivation as users to be aware of its potential, to utilize it in an appropriate fashion and to be aware of the potential consequences of such use – positive and negative. As editors of this compendium, we were both constrained and overwhelmed by the population of articles that were available to us from those published in Decision through the years. However, in sifting through the population of articles, we not only traversed the thirtyodd years of information technology and systems in India but were also pleasantly surprised at the parallels that could be drawn with the gradual shift in the nature and use of IT by individuals and organizations. The shelf-life of publications today, especially in the information systems area, have been rapidly decreasing, make them appear more ‘throw away’ than earlier. Yet, we found reading early articles which appeared in Decision deeply absorbing, leaving us with difficult choices to make on inclusions and exclusions of articles for this compendium. The articles presented in this compendium reflect this journey of Information Systems as a discipline, presenting as wide a worldview as possible, while placing particular emphasis on the impact of IS on India as a society, economy and nation. While being constrained by time and space, we endeavoured to balance comprehensiveness and coherence by choosing articles which we believed reflected broad areas of research and academic conversations representing snapshots from various key stages in the journey of the discipline. We are duty-bound to warn the readers that the debates continue to rage, the potential applications of information technology are far more now than ever before and the impact is increasingly intense.

Preface xvii

The compendium We have chosen five inter-linked themes to categorize and cluster the articles in this compendium. We begin with the theme ‘technology in action’ presenting the perennial debate on ‘Automation and Computers’, an issue more pertinent now than ever before, given the raging controversies surrounding automation. We present three articles relating to this debate (Natarajan, Chapter 2; Ilavarasan, Chapter 3 and Ray, Chapter 4) focusing on the evolution and impact of information technology in India, both as a means of supporting ‘work’ as well as an industry servicing other industries. Theme 2 focuses on the issues in the application of information technology in a variety of contexts, each presenting different organizational challenges accompanying the changing technology environments. We chose to include four articles in this section on E-Government in the Indian context (Dé, Chapter 5), a framework for adoption of iInternet based distribution systems (Agrawal, Agrawal and Singh, Chapter 6), the challenge of trust in adoption of Internet banking (Kumra, Mittal and Gunupudi, Chapter 7), and a commentary on the need to revisit the structuring of the IT function in contemporary organizations (Faisal, Chapter 8). The third theme is centred around technology and human behaviour, specifically on the way in which IT-based organizations have been impacted by the changing nature of work. The papers in this theme explore two specific research issues – the challenges of virtual team effectiveness in software organizations (Gaan, Chapter 9) and turnover intentions in the IT-enabled business process outsourcing sector (Chawla and Sondhi, Chapter 10). The book takes a theoretical turn with Theme 4 to feature work that examines the potential of two technology-driven, systems theory-based methodological tools of decision support – the system dynamics paradigm (Mohapatra and Mandal, Chapter 11, with an addendum by Roy, Chapter 12) and a fuzzy logic-based tool set with an application in options trading (Ramaswamy and Sundararajan, Chapter 13). The concluding theme of the book is a revisit to the powerful debate surrounding electronic globalization. The three chapters in this theme are ‘Borderless Bits’ epitomizing the distinct nature of the phenomenon of electronic globalization (Dholakia, Chapter 14); the myths surrounding electronic globalization and the need for a more conscious attempt at policy formulation (Chaudhuri, Chapter 15); and a call for resolving policy dilemmas related to electronic globalization while reinforcing the need for a conscious approach to dissolving the political tensions that the phenomenon brings forth (Abraham, Chapter 16). In the following

xviii  Preface section, we introduce the chapters in the anthology while outlining the underlying conceptual thread that strings them together.

Uncovering the tapestry: warps and wefts We begin the book with an introductory chapter that considers the ever-changing identity of the Information Systems discipline, its manifestation in India and its future. In ‘Information Systems in India: Daring to Cross’ we emphasize two facets of this issue: first, the paradox in the massive presence of the information technology industry in India yet the comparatively minimal space occupied by its academic mirror-image; second, the need to recognize the possibility that Information Systems as a discipline can be the front-runner in crossing and spanning the boundaries between different management disciplines. The first section of the book is ‘Technology in Action: An Indian Perspective’, a debate composed of three perspectives on the benefits, issues and challenges involved in automation. These chapters consider the need for cautiousness in treading into the path of excessive dependence on information technology, as an information and process support tool for individuals and organizations alike and as an industry sector contributing to India’s economic growth. The first article in this debate (originally published in 1987) discusses an issue which continues to be one of concern among Information Systems academicians and practitioners, sociologists, anthropologists and economists – computers and automation and their impact on people and society. In a recent series of articles in 2016 (see, for instance, Economist, 2016a, 2016b) and early 2017 (Economist, 2017), the popular magazine The Economist debated the benefits and tribulations brought forward by increasing automation in firms, especially in executing those jobs which were often earlier projected as being far from automatable. It seems that these debates are a repetition of history when one reads Natarajan’s article on the challenges accompanying automation. India’s strength as a source of less-expensive labour resources became significantly less relevant when automation in manufacturing became a reality of the late industrialization era. It is a déjà vécu when we consider automation of services today, especially in intensely information technology-enabled industries such as banking and financial services and hospitality, and in ubiquitous processes such as customer care services, product search support and logistics support. Increasing possibilities for significant technology support now even extend to automation of managerial decision making – this extension to tasks that were predominantly considered

Preface xix unstructured and knowledge-based forces us to revisit the assumptions of what computers can do. However, the gap between the developed world and the still developing world is yet stark when we contextualize IT adoption, use and, of course, automation. Although the potential positive impact is no less, the complementarities that are required to ensure IT’s large-scale societal use in developing countries like India are still far from sufficient. Ilavarasan’s chapter (Chapter 3) in this book, a rejoinder and expansion on Natarajan’s perspective (Chapter 2), attempts to situate the dichotomies that exist in a country like India where the IT sector is a significant contributor to the nation’s economy (an issue that is contested by Ray in Chapter 4), yet the benefits of its adoption by society are not equitably distributed. Ray, in Chapter 4, draws our attention to some fundamental nuances in the definition of the ‘IT sector’ as an industry, thus contesting the popularly assumed significance of its presence in the economy, especially in India. Despite the differences in the points of origin of their arguments, both Ilavarasan and Ray seem to converge on the argument that organizations face challenges in being able to exploit the potential that information technology (and by extension the IT industry) provides. While Ilavarasan highlights the need for social and developmental complementarities such as literacy, Ray emphasizes the need for economic and institutional complementarities, such as institution building and fostering of an ecosystem. In Part 2 of the book (Chapters 5–8), we offer the reader four research-based papers which discuss different facets and instances of information technology applications and management. We begin with Dé (Chapter 5), who examines four specific E-government projects in India, using a four-stage model of digital government, and presents an agenda for future research. Although Dé has abstracted these research issues specifically using examples from the Indian context, they can be seen as relevant to the larger global e-government context as well, particularly in less developed and developing countries. The second paper in this section is Agrawal, Agrawal and Singh’s (Chapter 6) framework for adoption of Internet based distribution systems. The high degree of disintermediation the Internet has brought about in distribution chains can hardly be contested. Yet, their work argues that some firms’ offerings are more amenable to digital distribution than others are. The authors chose to retain the main article in its original form (originally published in 2006), while also presenting an addendum to revisit the relevance of some of the theorization. Their paper abstracts and categorizes the different kinds of impact that the Internet has on distribution systems based

xx  Preface on product characteristics, the role of intermediaries and consumer sensitivity, especially towards price. In the years following the introduction of the Internet in India and other developing countries, individual adoption of Internet based services, such as online banking, were not only slow-paced but also tempered by a high degree of caution amongst adopters and non-adopters alike. Kumra, Mittal and Gunupudi (Chapter 7) examine the determinants of trust in the Internet banking context using data from a private sector bank in India. Their study is interesting from two perspectives. First, although the original study was published in 2004, the issue of trust in the online banking context continues to be an issue of concern (Sharma and Thomas, 2017). Second, recent initiatives by the Government of India to use Internet-based banking as a way to shrink the informal cash economy makes understanding the determinants of trust in Internet banking even more of a necessity. The final article in Part 2 is a perspective piece entitled ‘Structuring IT Function’ (Chapter 8). Although originally published in 1999, the article has been considerably revised to take into account more recent technological developments and business trends. Here, Faisal draws on prior literature to present five specific information technology related organizational factors which impact the structure of the IT function in any organization. The third section of the book (Chapters 9 and 10), ‘Behavioural Issues in the IT Industry’, focuses on two important issues surrounding the IT and IT-enabled services (ITES) industry in India. While the popular literature and academic research abound with the phenomenal performance of India’s IT industry, many specific challenges of this industry are often merely surface scanned. The articles chosen for this theme deal with two issues that are of concern in India’s IT industry – the effectiveness of virtual teams and the turnover of female employees. Gaan’s chapter on collaborative tools and their impact on virtual team effectiveness uses primary data from an Indian software firm to theorize the impacts of demographic dissimilarity and the choice of collaborative tools on the effectiveness of virtual teams. Her findings on the negative effects of demographic dissimilarity provide empirical evidence to establish the often-discussed challenge in software firms, while her conclusion proposes the need for a blended approach to technology support of geographically dispersed teams. Given that these issues continue to be relevant today, the author chose to make minimal changes to the original paper published in 2012. The subsequent chapter by Chawla and Sondhi (Chapter 10) – on the business process outsourcing (BPO) industry (an ITES industry) – argues that

Preface xxi the problem of high turnover amongst women employees demands further research, especially since their study reveals that the antecedents of turnover intentions include both personal as well as organizational factors. Chawla and Sondhi’s original article, published in 2011, analysed the issue of turnover amongst school teachers and BPO employees. On our request, the authors agreed to rewrite the article focusing only on BPO employees and the impact of organizational and personal factors on their turnover intentions. Both articles in this section indicate strong gender imbalanced undercurrents in the IT and ITES industries in India. Although the industry has often promoted its efforts to ensure women-friendly policies (NASSCOM, 2017), it still has a long road to walk in order to be able to claim success in ensuring retention and equitable career growth coupled with greater participation of women in the industry as a whole. Part 4 (Chapters 11, 12 and 13) provides a glimpse into the theoretical aspect of Decision’s coverage, featuring two chapters that focus on systems theory. Systems theory-based methodologies have the ability to aid analysis of problems that are characterized by uncertainty and ambiguity, such as in social systems where mental models of different stakeholders introduce a need to go beyond the obvious or in business decision making where many problems cannot be very precisely defined. While systems theory encompasses a wide variety of approaches, the two chapters in this section were chosen to provide a demonstration of the application of systems theory-based methods to management and policy-related problems. Chapter 11 by Mohapatra and Mandal discusses system dynamics, a paradigm based on systems theory and cybernetics. Roy in Chapter 12 presents a glimpse of the different applications of system dynamics in management and policyrelated issues. In Chapter 13, Ramaswamy and Sundararajan apply fuzzy sets, a predominantly operations research-based systems methodology, to the context of financial option trading. System dynamics as a paradigm and methodology focuses on enabling holistic perspectives to phenomena. Mohapatra and Mandal present the epistemological underpinnings of the paradigm in a primer-like fashion. In doing so they also provide the reader with a set of guidelines on the use of the approach for developing an understanding of a system, a phenomenon or a decision problem. Complementing the theoretical pointers presented by Mohapatra and Mandal, Roy’s chapter reviews a sample of application areas where system dynamics has been used as a tool to analyse phenomena, decode the cause–effect relationships in the phenomena and thus help identify handles to predict, control, manipulate and manage such phenomena. Roy’s examples are drawn from a

xxii  Preface wide variety of issues and problems in the management and policy environment, including inventory control in the supply chain context, project management, technology diffusion, competitive strategy and management education. Although these two methodologies – system dynamics and fuzzy sets – are quite distinct in their basic approaches to supporting analysis and development of solutions to managerial decision problems, they are indicative of the wide diversity in systems theory and its applications. The concluding theme of this book, in Part 5 (Chapters 14–16), is the debate on electronic globalization – focusing on the interconnected world and the deeper implications of the vast economic and social consequences of the networked era. Dholakia (Chapter 14) seems to take off from where Natarajan left (Chapter 2) – looking at the larger cultural and political factors influencing the electronic globalization debate. The unemployment in countries like the US resulting from outsourcing information processing jobs to countries like India seems to coexist with the upward economic movement of part of the Indian middle class, while new inequities have been introduced to the countries benefiting from such work. These inequities seem to be a common factor across all nations, only deepened further in some by increasing diversities. Chaudhuri (Chapter 15) extends Dholakia’s discussion further through his arguments on the myths surrounding jobs gained in countries like India, the nature of required skill sets, the far-reaching impact of the digitalization and the underestimation of the need and ability of the society to absorb such technologies. In an addendum to his original opinion piece, Chaudhuri revisits some of these realities, placing a keen eye on the unfavourable impacts of electronic globalization, especially in transmitting news and information, often more rapidly when the news is negative and distressful. He concludes with a renewed emphasis on the need for a conscious and informed policymaking environment. Abraham shares this demand with Chaudhuri in Chapter 16, while at the same time drawing our attention to the dilemmas that governments face. In the course of trying to resolve existing problems, they may create new ones – reminiscent of the mythical Hydra – along with the problem of trying to keep the ‘contented’ happy while shifting the ‘discontented’ to a state of contentment. An instance of this is in the more recent attempt of the Indian government to introduce a greater degree of financial digitization in an attempt to curb unaccounted business transactions leading to tax evasion. Honourable as the objective may be, unintended consequences of unprecedented proportions may occur, such as massive loss of jobs for contractual labour, especially in

Preface xxiii agriculture and small-scale industries, significant loss of business in the informal sector (Umamaheshwari, 2016) and a noticeable fall in GDP growth. The three chapters – Dholakia (Chapter 14), Chaudhuri (15) and Abraham (16), while taking the stance that electronic globalization is indeed quite distinct in its nature and consequences from that of economic globalization in general, present diverse arguments on the resulting challenges and the calculated responses that they demand. Disciplines grow, disciplines evolve and disciplines transform themselves to crawl into each other’s loosely defined boundaries. Information systems is no exception to this. Through the different chapters in this book, it is evident that information systems is itself a collective – a collective of disciplines that interact in the organizational space, a collective of people whose thought processes borrow heavily from the traditional sciences, the engineering disciplines and the social sciences, in effect a collective of thought that goes through changes, occasionally transformational with every passing change in technology, organizations and society. We believe that it is this collective that ties together the chapters of the book, interconnecting the various pieces of the puzzle – debates, applications and impact, from the perspective of the Indian Information Systems community.

Acknowledgements Any project of this kind is usually a collaborative effort. Although the two of us have led the way, we were intensely supported by many other people, many of whom were silent players in the background. The Decision book project was initiated by Professor Rajesh Babu, the current editor of Decision, a journal under the aegis of the Indian Institute of Management Calcutta. As those of you in academia would know, it is hard to find series editors who are not only flexible on the content, theme and how editors can deal with it, but also allow us the freedom to explore new possibilities. Rajesh has been a wonderful editor, knowing when to pressurize us, but at the same time smilingly acknowledging the challenges in coordinating with twenty-one authors, some of whom are distanced not only in time but also in academic calendars. Shoma Choudhury of Routledge, Taylor & Francis, has been so elegantly polite with us and yet so firm in what she wanted us to achieve. She has tolerated our many requests for changes, extensions, etc. We are grateful to Suprateek Sarker for honouring our request and agreeing to write a foreword. His genuine advice to both of us on various occasions have helped us shape many of our academic choices.

xxiv  Preface An edited volume’s strength lies in the contributions of the different authors, and it is no less so with our compendium. When we first started writing to authors informing them of the possibility of including their article as a chapter in the volume, we were apprehensive, mainly because of the time span of articles that we were looking at – 1989 to 2012. Many of the responses pleasantly surprised us. Most authors wrote back agreeing to revisit their original articles; some, however, were constrained by time and data availability, but not by enthusiasm. We appreciate the scholarly respect that we received from many senior authors who not only welcomed our review comments, but also patiently answered many of our queries and willingly made the changes we requested. It has been a privilege to work with you, dear Authors. We know we have been quite demanding of your time and patience while we collated this anthology. We apologize for our exacting expectations and we sincerely hope you will not hold it against us! We must not forget two hard-working ladies without whose help this volume would have been close to impossible. Poulami Sadhukhan began working with us and helped us narrow down on a possible set of articles from the voluminous list of Decision articles across 38 years, many of them in hard copies only. Destiny had something different in store for Poulami when she had to move out of Calcutta for personal reasons. But her abilities were matched by an equally enthusiastic Priyanka Chatterjee, who has unflinchingly allowed us to burden her with the task of maintaining consistency of language and formats across the different chapters. Arunava Banerjee was of great help in the initial stages of the copy-editing process. Although they took care of all the structured tasks, and their contribution no less significant, the onus of editorial errors of omissions and commissions lie solely with the two of us. Finally, our families have been extremely supportive, especially over the last few months when we were close to completion and the seven and half-hour time difference between New Zealand (where Jocelyn lives) and India (where Priya lives) demanded Skype chats at strange hours. Many vacations have been cut short, weekend getaways compromised and family dinners shortened to allow us time to rework chapters. The book has seen many ups and downs through the time since we started working on it – injuries and illness in the family, someone’s passing away, two earthquakes (in New Zealand), one after which Jocelyn could not get to her office for three months, a cyclonelike situation (in Calcutta), amongst the many everyday life’s small happenings! We seem to have survived all that fairly unscathed.

Preface xxv

References The Economist. 2016a. ‘Automation and Anxiety: Will Smarter Machines Cause Mass Unemployment?’ www.economist.com/news/special-report/21700758will-smarter-machines-cause-mass-unemployment-automation-and-anxiety (accessed on 5 October 2017). The Economist. 2016b. ‘March of the Machines: What History Tells Us About the Future of Artificial Intelligence – and How Society Should Respond’, www.economist.com/news/leaders/21701119-what-history-tells-us-aboutfuture-artificial-intelligenceand-how-society-should (accessed on 5 October 2017). The Economist. 2017. ‘The Future Lies in Automation’, www.economist.com/ news/special-report/21720073-factories-are-upgrading-still-lag-far-behindrich-world-future-lies (accessed on 5 October 2017). McFarlan, W. F. 2016. ‘IT and Management 1960–2020’, in Mithas, S. (ed.), Digital Intelligence: What Every Smart Manager Must Have for Success in an Information Age, India: Penguin Random House. NASSCOM. 2017. ‘Women and IT Scorecard – India’, www.nasscom.in/ knowledge-center/publications/women-and-it-scorecard-%E2%80%93india (accessed on 5 October 2017). Sharma, A. and Thomas, R. 2017. ‘Mastering the New Realities of India’s Banking Sector’, McKinsey Report, www.mckinsey.com/global-themes/india/ mastering-the-new-realities-of-indias-banking-sector (accessed on 5 October 2017). Umamaheshwari, R. 2016. ‘Demonetised, Delinked’, Economic and Political Weekly, 51(51): 76–77.

Contributors

Biju Paul Abraham is Professor of Public Policy in the Public Policy & Management Group of the Indian Institute of Management Calcutta. He did his B.A. and M.A. from the University of Kerala, his M.Phil. in International Relations from Jawaharlal Nehru University, New Delhi, and his Ph.D. in Public Policy from King’s College London. He was Nehru Centenary Fellow at King’s College London between 1991 and 1995. His teaching and research interests include international governance issues and assessment of risks affecting firms as a consequence of changes in the socio-political and regulatory environments. Dev P. Agrawal is the former Chairman of Union Public Service Commission, Government of India. He has over 40 years of research and teaching experience, has published over 160 papers and guided over 100 doctoral and master’s level theses. He has held many positions including Dean, IIT-Delhi; Director-Atal Bihari Vajpai Indian Institute of Information Technology and Management, Gwalior; and Joint Advisor, Ministry of Human Resource Development, Government of India. Durgesh K. Agrawal is Professor of Marketing and Supply Chain Management at Rajiv Gandhi Indian Institute of Management, Shillong. He holds a Ph.D. from ABV-Indian Institute of Information Technology and Management, Gwalior. His research has appeared in Journal of Marketing Channel, International Journal of Manufacturing Research, International Journal of Services Sciences, International Journal of Business Research, IIMB Management Review and Journal of International Business and Economics among others. He has authored four books in the area of Logistics and Supply Chain Management.

Contributors xxvii Anindya Chaudhuri is Senior Economist at the Global Development Network (GDN), where he oversees the development and foundational aspects of research and capacity building programmes in developing countries. His own research focuses broadly in the areas of human capital, information systems and public services delivery mechanisms. He holds a Ph.D. in Public Policy from The University of Texas at Austin, and bachelor’s and master’s degrees in Economics from Jadavpur University. Deepak Chawla is Distinguished Professor at International Management Institute, New Delhi, India. He is an alumnus of ISI Kolkata and a Fellow from IIM-Ahmedabad. He has worked on research and consulting projects both in India and abroad, and extensively published in refereed journals. His areas of academic interest include business statistics, marketing research, business forecasting, applied econometrics, managerial economics and actuarial science. Rahul Dé is the Hewlett-Packard Chair Professor in ICT for Sustainable Economic Development at Indian Institute of Management Bangalore. He has a B.Tech. from the Indian Institute of Technology, Delhi, an M.B.A. from the University of Delhi, and a Ph.D. from the Katz Graduate School of Business, University of Pittsburgh. He has published over 60 articles in international journals, refereed conference proceedings and chapters in books, apart from an MIS textbook. Two of his papers have won Outstanding Paper awards. His research has appeared in journals such as Technological Forecasting & Social Change, ICT for Development, International Journal for Information Management, IEEE Software among others. His primary area of research is electronic government, ICT for development and open source. He serves on the editorial boards of Information & Management and Government Information Quarterly. He has served as co-editor of special issues of ISJ, JAIS, ISF and Science, Technology and Human Values. Nikhilesh Dholakia is Professor Emeritus at the University of Rhode Island (URI), USA. His research deals with the intersections of globalization, technology, innovation, market processes and consumer culture. More recently he is working on conceptualizing ‘late globalisation’. Among his books are New Infotainment Technologies in the Home: Demand-Side Perspectives (1996) and Consuming People: From Political Economy to Theaters of Consumption (1998). Articles authored by him have appeared in many leading international journals such as Marketing Theory, Journal of

xxviii  Contributors Consumer Culture, Consumption Markets & Culture, Information and Organisation among others. Mohd. Nishat Faisal is Associate Professor at the Department of Management and Marketing, College of Business & Economics, Qatar University, Qatar. His research has appeared in journals such as Industrial Management & Data Systems, Journal of Enterprise Information Management, Benchmarking: an International Journal, International Journal of Logistics Research & Applications, Waste Management, International Journal of Productivity and Performance Management, Journal of Systems and Information Technology and Business Process Management Journal among others. He is the recipient of the Emerald Highly Commended Award in 2008 and CBE, Qatar University – Excellence in Research Award, 2011–2012. Niharika Gaan is Associate Professor at Management Development Institute (MDI), Murshidabad, India. Her research interests are in the areas of employee engagement, sustainable work systems, employee passion, mentoring, virtual team effectiveness, emotional labour, employee turnover and transformational leadership. Her work has appeared in Indian Journal of Industrial Relations, Decision, New Zealand Journal of Human Resource Management and Vision – The Journal of Business Perspective. Laxmi Gunupudi is a Fellow from Indian Institute of Management Bangalore in the area of Decision Sciences and Information Systems. She has prior IT industry experience of 11 years with companies such as GE, Geometric, IBM and Centre for Digital Financial Inclusion. Her research work is primarily around cloud computing and organizational adoption of innovations. She currently works as a visiting faculty for various management institutes such as IIM Tiruchirappalli and IIM Nagpur. P. Vigneswara Ilavarasan is Associate Professor at the Department of Management Studies and adjunct faculty at Bharti School of Telecom Technology & Management at Indian Institute of Technology Delhi. He teaches and researches about production and consumption of information and communication technologies. His papers have appeared in Journal of Global Information Management, Socio-Economic Planning Sciences, Electronic Journal of Information Systems in Developing Countries, Mobile Media & Communication amongst others.

Contributors xxix Rajeev Kumra is Professor of Marketing at Indian Institute of Management-Lucknow. His research interests include consumer culture, the bottom of the pyramid, inter-organization dynamics, religion’s impact on marketing amongst others. His research uses multiple methods including experiments, case studies, in-depth interviews and focus groups. His publications have appeared in various refereed journals such as Journal of Business and Industrial Marketing, Journal of Management and Organization, International Journal of Electronic Business and International Journal of Business and Emerging Markets. Purnendu Mandal is Professor and Chair of the Information Systems and Analysis Department at Lamar University, USA. His teaching and research interests are in the areas of database management systems, e-commerce, strategic management information systems, management information systems and system dynamics. His research papers have appeared in European Journal of Operational Research, International Journal of Production Economics, Management Decision, International Journal of Operations & Production Management, International Journal of Quality & Reliability Management, Logistics Information Management, Intelligent Automation and Soft Computing: An International Journal, International Journal of Technology Management, ASCE Journal of Management in Engineering, Decision and Applied Mathematical Modeling. R. K. Mittal is Professor in University School of Management Studies and Director Development at Guru Gobind Singh Indraprastha University, Delhi, India. Earlier he was Vice Chancellor of the Teerthanker Mahaveer University, Moradabad. His areas of specialization include micro- and macro-economic analysis, public finance, economic environment of business, developmental issues and problems and administration of institutions of higher education. He has published 108 research papers in professional journals and has supervised 13 Ph.D. theses. He has also co-edited seven books and has written many cases in management. Pratap K. J. Mohapatra is former Dean and Professor of Industrial Engineering and Management at the Indian Institute of Technology Kharagpur. Over his four decades of academic career, he has published in more than 75 reputed international journals and authored two books. His research interests have been in the areas of system dynamics, production and operations management, systems engineering and e-business.

xxx  Contributors Ramachandran Natarajan is Associate Dean and W. Eugene Mayberry Professor of Management in the College of Business at Tennessee Technological University (TTU). He received his B.Tech. in Electrical Engineering from the Indian Institute of Technology Madras, M.B.A. from Indian Institute of Management Calcutta, M.S. in Managerial Economics and Decision Sciences from the Kellogg Graduate School at Northwestern University and his Ph.D. in Business from the University of Kansas. His research has appeared in journals such as the International Journal of Production Economics, International Journal of Operations Management, Total Quality Management, Decision Sciences, Quality Progress and TQM Magazine and in the Encyclopedia of Production and Manufacturing Management. Sridev Ramaswamy is a Derivatives Trader at a Financial Markets trading company in London, UK. He holds a Bachelor of Engineering degree from the College of Engineering, Anna University, Chennai, India, and a doctorate in Information Systems & Finance from the Indian Institute of Management Calcutta in India. He has over 17 years of experience in trading derivatives across asset classes including Currencies, Commodities, Fixed Income and Equities, mostly at Deutsche Bank and currently at a London trading firm. Partha Ray is Professor of Economics at the Indian Institute of Management, Calcutta. During 2007–2011 he was Adviser to the Executive Director (India) at the International Monetary Fund, Washington, D.C. Earlier he was working in the specialist cadre of Economists in Reserve Bank of India’s Economic Research Department during 1989–2006 in various capacities; his last position was Director, Department of Economic and Policy Research, RBI. He has written on issues relating to macroeconomics, monetary policy and the banking and financial sector. His recent publications include Financial and Fiscal Policies: Crises and New Reality (jointly with Y. V. Reddy and Naryan Valluri, 2015) and Monetary Policy (2013). Rahul Roy is Professor of MIS at Indian Institute of Management Calcutta. He obtained his B.Tech., M.Tech. and Ph.D. from the Indian Institute of Technology Kharagpur. He has been a visiting scholar with the MIT Operations Research Center and a visiting professor at the University of Northern Iowa. His research has appeared in Technological Forecasting and Social Change, Online Information Review, Computers in Human Behavior, Communications of the ACM, Journal of Management Information Systems, International

Contributors xxxi Journal of Electronic Commerce and System Dynamics Review. Prior to joining IIM Calcutta, he worked for about five years as an industrial engineer at one of the largest automobile manufacturing companies in India. Deepali Singh was Professor of Marketing at ABV-Indian Institute of Information Technology and Management-Gwalior before her untimely demise. She was a contemporary thinker and an active researcher in the integration of marketing and information technology. She had more than 100 papers to her credit and guided many doctoral and master’s level theses. Neena Sondhi is Professor at International Management Institute, New Delhi, India. She is an alumnus of the University of Delhi, is an avid researcher and publishes extensively in national and international journals of repute. In addition to her teaching she has successfully accomplished a number of executive training, market assessment studies and consultancy assignments. Her areas of academic interest include consumer behaviour, marketing research and qualitative research methods. Ramasubramanian Sundararajan currently heads the AI function at Cartesian Consulting in Bangalore, India. He has over 14 years of experience in applying machine learning/data mining techniques to a variety of problems in the area of finance, healthcare, energy, aviation and travel, first at GE Global Research and then at Sabre Airline Solutions. He holds a bachelor’s degree in Information Systems from the Birla Institute of Technology & Science, Pilani, India, and a doctorate in Information Systems from the Indian Institute of Management Calcutta, Kolkata, India. His research has appeared in journals including Journal of Revenue & Pricing Management, Interfaces and Journal of Database Marketing & Customer Strategy Management among others.

1 Information systems in India Dare to cross Priya Seetharaman and Jocelyn Cranefield

Introduction The discipline of management is innately pluralistic. Of the different disciplines which are considered to be integral part of such pluralism, information systems is often viewed as a young and derived discipline (King and Lyytinen, 2004; Wade et al., 2006). Two outcomes of being treated so have been intense debates – identifying ‘reference disciplines for information systems’ (Keen, 1980; Avgerou, 2000 and Saunders in King et al., 2010) and along with it the deep ‘identity crisis’ ruminations, linked with calls for a distinctive theoretical foundation (Benbasat and Zmud, 2003; King and Lyytinen, 2004; Teo and Srivastava, 2007). These debates have left their mark on the evolution of information systems as an academic discipline in the global context as well as regional contexts. Given the burgeoning demand for and use of information technology (IT), one could ask, should there be a distinction between the ‘global’ and the ‘local’ in the discipline? Should we be distinguishing the larger issues related to individual and organizational use of information technology as generic to individuals and organizations across the world or should we emphasize the need to focus on the context – the ‘local’? Should the issues of interest in information systems as a discipline and the manner in which we approach these issues of interest, the questions we ask and the answers we seek, be guided by the relative importance of these in the context of study? Such distinction may not only be incidental from the disparity in the socio-economic and institutional contexts in which such information technology is embedded but is also imperative given the consequential potential impacts – planned or unintended. These two issues also impose upon information systems academics practical ‘everyday-life’ challenges exaggerated by the pressures for academic performance, sometimes leaving us to compete for resources

2  Priya Seetharaman and Jocelyn Cranefield with other management disciplines, many of which have, in earlier times, been looked upon as parent disciplines to information systems. Although the issue of reference disciplines has now been relegated to the status of purely an academic discussion, concerns relating to identity seem to have larger implications and therefore continue to dominate disciplinary discourses. Identity-related issues in the discipline present us with a need to consciously address the dual challenges of boundary-setting and ensuring inclusiveness in the knowledge creation, demonstration and dissemination activities that information systems academicians engage in. Sporadic appearance of articles in information systems journals and conference proceedings on such themes as falling enrolments, shrinking budgets and academic job losses add to the imperative to ensure that the field’s boundaries are sufficiently inclusive. If the information systems academia of the developed West is grappling with these issues, can that of the developing South be far behind? However, owing to South Asia and Asia-Pacific being the outsourcing destination for IT-related and IT-enabled work from the developed West, the nature of the identity debate is quite different; the potential solutions that can be explored by the information systems academic community in these geographic spaces are, by extension, distinct. An attempt to understand the prospects for the information systems discipline in India has to necessarily be accompanied by tracing the historical context in which the discipline established its roots; the role played by the different stakeholders including the IT industry, the technical and higher education institutions, and the government; the discipline’s evolving academic coordinates and finally the growing business interest in digitalization. The remainder of this chapter is structured as follows. We prepare the canvas by briefly scrolling through the history of the information technology industry in India. Much has been said and written about the IT industry in India through multiple perspectives and theoretical lenses. We therefore restrict ourselves to viewing the industry’s evolution with the specific objective of comprehending its impact on information systems as an academic discipline. We then discuss the role played by the information systems academia in India through their contribution to the Indian industry, specifically the IT industry. We conclude the chapter with our perspective on how information systems as a discipline, more so in a developing country context such as India, should dare to cross the disciplinary boundaries laid down thus far. Here, we are reiterating the thought and desire expressed by many leading information systems researchers such as Robert D. Galliers, who emphasized the need to adopt a transdisciplinary approach

Information systems in India 3 to IS research (Galliers, 2003). Although Galliers distinguishes interdisciplinary from transdisciplinary, we believe both are equally valuable in taking us beyond the confines of the boundaries already in place. Interdisciplinarity refers to “pooling different disciplinary resources to produce a single outcome” or “drawing on several disciplinary practices” to create new streams of thought; while transdisciplinarity is seen to hold on to both the specificity of particular ways of thinking and knowing that define disciplines, while [simultaneously] creating the space of their productive encounter so that a different kind of knowledge emerges in the act of intersection and traverse of varied fields through which a shared concept might travel. (Pollock, 2007) Our academic rationale for such a wake-up call to researchers in the information systems discipline, especially in developing countries like India, is two-fold. First, we argue that in socio-economic environments characterized by chaos such as that in India, pigeonholing issues surrounding information technology blinkers out deeper challenges that demand far greater attention, resulting in the loss of potentially viable solutions to fundamental problems prevalent in practice. Second, amongst the various fields of study and practice in management, information systems is best posed to play an integrative role drawing from different functional management disciplines such as behavioural science, finance and marketing, while at the same adapting theories and perspectives from other related social sciences such as sociology, anthropology, political science and economics. By attempting to cross disciplinary boundaries, the information systems academia shall be mimicking the ethereal, all-permeating nature of its primary resource – ‘information’.

1.1 Information technology industry in India The beginnings of the IT industry in India can be traced back to as early as the 1960s when the then central government set up technical higher education institutions with the distinct objective of being able to ensure the availability of trained indigenous human capital and knowledge resources. However, the 1960s and subsequently the 1970s held mixed experiences for India in the context of its IT industry. The dependency on international technology providers and the tendency of some foreign firms to dump obsolete equipment and

4  Priya Seetharaman and Jocelyn Cranefield charge for technology support services higher than in the US did not augur well with the Indian scientists and policy-makers (Subramanian, 2006). Coupled with the intense restrictions placed by the government policies of the 70s, which emphasized license-based business regimes, export quotas and foreign exchange restrictions, the growth of the industry was further pushed back. Many of these policies were designed for the manufacturing sector but partly applied to the IT industry (Balakrishnan, 2006; Subramanian, 2006; Das and Sagara, 2017). This effort to promote self-reliance in manufacturing computer technology through stringent policies till the 1980s constrained both technology makers and users, restricting their access to financial capital (such as foreign direct investment in export-oriented units) as well as knowledge capital (Das and Sagara, 2017). Adding to this indifference, a long pending need to declare software as an “industry” continued to make it difficult for firms wishing to ‘make, sell or export’ software to seek financial support (Dossani, 2006). A shift in the government policies in the 1980s brought with it some promise of growth and opportunity for the industry, albeit in a slow and delayed fashion. The global shift towards the separation of computer software from hardware, which in turn gave an impetus to the growth of the software and the IT services industry worldwide, helped India best utilize its dominant source of competitive advantage – human resources. The early offering of the Indian IT services industry was, therefore, the provision of low-cost programming as a service to clients abroad as early as the mid-1980s (Yourdon, 1993; Dossani, 2005). Although managed services, time-sharing, integration and maintenance were the earliest software services to be outsourced by American user firms, these did not lend themselves to remote work. These were generally short-term assignments for international clients, often at the client’s own geographic location, fulfilling a particular project need (Balakrishnan, 2011). As application development in some of the developed countries, especially the US, became increasingly decentralized, the Indian software companies saw huge business potential in providing these as services at a cost lower than that of their American counterparts. Growth came gradually to the industry in the 80s when knowledge workers, especially technically qualified, English-speaking Indian engineers, became more readily available to the growing global industry at an economical cost. The industry registered a high growth rate (in terms of sales revenue) in the first decade of its formal existence. It exported around $25 million worth of software and related services in 1985 (Kapur, 2002), which grew to around $105 million by 1990, and

Information systems in India 5 reached approximately $6.2 billion by the year 2000 (Dossani, 2005). Critics argue that a combination of “benign neglect” on the part of the Indian government (Kattuman and Iyer, 2003) coupled with extraordinary entrepreneurship (Dossani, 2005) and the intense branding by industry associations like NASSCOM (Athreye and Chaturvedi, 2007) played significant roles in the rapid growth of the industry. Further, till the early 1980s, the industry also experienced a gaping deficiency in technical knowledge. Much of the skills, knowledge and experience available in the industry till then was actually brought back by software professionals returning home after stints abroad (Balakrishnan, 2011). Deliberate attempts to foster the growth of the IT industry in India came subsequently in the late 1980s and early 1990s, when the Indian government set up software technology parks and clusters (Vaidyanathan, 2008), through to the late 1990s, when foreign ownership in the industry was permitted and protection for software as intellectual property was introduced (Seshagiri, 1999; Dossani, 2006). Development of telecommunication infrastructure, creation of associations and consortia (such as NASSCOM), and a growing supportive and powerful diaspora were also seen to influence the gradual success of the Indian IT industry (Lee et al., 2014). India’s success as a software exporter among developing countries has often been attributed to the three-stage ‘body shopping – offshoring – global delivery model’ (Lee et al., 2014; Pinjala, 2017). The shift from the pure body-shopping environments of the 80s to the global services delivery model in the 1990s allowed Indian IT firms to equip themselves with far greater project management capabilities, rich enough to sustain them through the early 2000s (Athreye, 2005). With the growth of the internet and networked business environments, new opportunities presented themselves to the Indian IT firms. While many large firms utilized this opportunity to grow in revenue by capitalizing on the possibility of remote work, offshoring and extension outsourcing, these new environments also spawned a variety of smaller firms with quite different business models – a phenomenon that sowed the seeds of the early start-up ecosystem in India, much akin to that prevalent in some of the more developed countries. However, the changing landscape also demanded a shift in the orientation of the business environment, including the need to encourage risk-taking and innovation, the tolerance and patience demanded from investors, end-customers who were technology-savvy and business customers who were willing to co-create and experiment with relatively unknown technology providers. While some start-ups barely survived, most failed. While start-up failure is common at a global level, the likelihood of failure in

6  Priya Seetharaman and Jocelyn Cranefield this case can also be seen as related to the nascence of the ecosystem in the Indian market reflected in the shifting dynamics of the internet service provider industry (Rao, 2000), the low internet penetration, lack of trust of technology and deficient infrastructural support (Ernst & Young, 2013). Technology too needed time to stabilize and garner steam to provide a critical mass of potential adopters. The first decade of the millennium turned the tables when more user-friendly, democratized, less-expensive technology devices, tools and applications appeared on the horizon. End-consumers’ expectations rose, which in-turn triggered a rise in the performance expectations of business customers from their IT service providers. The capabilities built by the IT industry over the previous three decades, while continuing to be necessary, were beginning to be considered grossly insufficient to cater to the expectations of the rapidly digitalizing market. Client firms increasingly demand more agile, innovative, modular, product-based application environments which would allow their businesses to scale up and widen their scope. As academics mapping the evolution of the IT industry and its impact on information systems academia in India, we are bound to acknowledge an alternative viewpoint that contests the very idea that the Indian IT industry was not product-focused. This alternative stance, often presented by practitioners and industry experts, argues that the line between process innovation and product innovation in information technology, specifically software, is both thin and grey. In creating new ways of doing things in software provision and software services delivery, IT firms have to necessarily create software products. It is, and quite naturally, likely that the agreements between clients and IT service providers prevent IT firms from repackaging or marketing these products by themselves (Nambisan, 2001). Second, should an Indian IT firm attempt to segregate its revenue from products from that of its revenue from services, which is a difficult exercise given the inherent overlapping characteristics of the two, the performance pressure from investors is likely to rise significantly. Software products are often perceived by the market as information goods whose characteristics include very high costs but also low marginal costs and increasing returns to scale. Market expectations from software products, therefore, are quite different from those expected from software services, which are often seen as dominated by variable costs, scaledependent and not easily differentiable (Nambisan, 2001). In parallel with this challenge of services to products, two developments seem to present themselves as significant new opportunities for the industry. First, the growing domestic market has called for

Information systems in India 7 more localized research, design and development of end-user devices, applications and enterprise products and applications (Sethi and Gott, 2016). Second, a plethora of start-ups, fostered by an increasingly failure-tolerant, risk-taking set of technology patrons and venture capitalists, apart from a growing number of incubators and accelerators, are together contributing to an image overhaul, from a cost-driven low-skilled industry to one that showcases India’s true knowledge and innovation capabilities (Kumar et.al., 2017). The eroding boundaries between the different sectors of the economy seem to add to these opportunities in helping the industry respond to the uncertainties resulting from the services to products transition. Interestingly, with new technologies such as cloud computing, the very definition of software products also seems to be undergoing a rethink, giving rise to the phenomenon of servitization of information technology application products and solutions (Sultan, 2014). Yet, these are wait-and-watch, uncertain transformations, the course of which cannot be so easily determined, let alone consciously controlled, in the same way as the IT industry of the past. In order for the industry to sustain these uncertainties, it seems to us that some complementarities need to be ensured, some of which are already beginning to sprout. First, the educational institutions that generate the human capital demanded by the industry have to transit to more innovation, design-centric and experimentative environments which foster idea-generation capabilities amongst the students. Second, the financial ecosystem which funds and supports the industry must become more tolerant towards deep-funnel adventures of the industry, albeit within limits. Third, the policy environments must be attractive enough for multinationals who are willing to put the Indian design and research talent to good use. There is some evidence of all three of these changes beginning to occur, some of which are discussed later in this chapter. Kris Gopalakrishnan’s ground-breaking Itihaasa project uses diverse media to trace the history of the IT industry through the eyes of doyens of the industry.1 It features comments and opinions on the industry, its focus, the rationale for its emphasis on services, the challenges it faced at different junctures, and the socio-economic impact as perceived by people associated with the industry including academicians, industry leaders and government bureaucrats. What is also interesting about the project and its outcome is not just the industry’s evolution, growth and contribution to India as a country, but also how “inclusive” this industry has actually been. Obviously, the hard work of the founders of the industry has seen significant returns measured

8  Priya Seetharaman and Jocelyn Cranefield in terms of contribution to GDP growth, exports, foreign exchange reserves, employment – direct and indirect, productivity gains in client industries, etc. The non-measurable gains have been in the branding of India as a destination for software services, opportunities for skilled employment abroad and the ripple effect of performance pressures across other related sectors such as services. The industry has also been criticized for its inability to see beyond its boundaries. A major fallout from the rapid growth of the IT industry in India has often been observed in the socio-economic environment. Although the industry has attempted to be inclusive, and has in fact resulted in direct and indirect employment to many, it has failed to consider the larger, less obvious inequalities that it gave rise to or further intensified – no doubt reflecting the lack of conscious awareness and/or incentive for senior executives, to view larger socio-economic issues outside of firm boundaries (Upadhya and Vasavi, 2006).2 For example, gender inequalities in the IT industry, although often argued to be far lower than many other industries, especially traditional manufacturing, are presumably veiled and thus far less obvious (Fuller and Narasimhan, 2007; Varma and Kapur, 2015). Chawla and Sondhi (Chapter 10 of this book) and Gaan (Chapter 9 of this book) have made interesting, unobvious observations with respect to gender imbalance undercurrents that flow in the industry. Another unintended consequence, yet not unexpected, has been the rapid rural to urban migration that the industry’s growth has resulted in, placing unprecedented pressures on urban infrastructure in places like Bengaluru, Pune and even Gurugram; the effects of which are visible three decades after the industry first made its presence felt (Madon and Sahay, 2001; Ramachandra and Mujumdar, 2009). Although the reasons for this concentrated growth in urban locales are grounded in the lack of complementarities such as infrastructure, especially communication networks and social dichotomies of rural India (Sandeep and Ravishankar, 2018), the industry has been unable to grasp the realities of its impact on rural to urban migration. It is also true that it is not only the IT industry which has contributed to this skewness, but also the overall governmental emphasis on concentrated urban-centric economic growth. Inequalities in access to high-quality technical education at an economical cost in non-urban locations, which were already present in the country, were only further deepened by the recruiting practices of the IT industry. Some firms attempted to break this cycle by investing in long-term capability building initiatives,3 but most merely followed the path led by the demands of the market. These hidden inequalities

Information systems in India 9 have also given rise to greater levels of expectations from the “havenots” in terms of potential employment opportunities, notwithstanding the lag experienced by the education system in keeping pace with the needs of the industry. The mushrooming of low-quality technology schools has further abetted this misplaced expectation. These inequalities notwithstanding, the information technology industry in India continues to command a preferential status both within the country – in the government’s economic policy as well as in the aspirational career options of the youth – and outside the country – as potential investment opportunities and for meeting the information technology service needs. The nature and evolution of the Indian information technology industry had specific implications for the role of information systems academia in India. Primarily, these implications lay in the direction of adequately preparing the potential recruits with a wide variety of capabilities such as the ability to analyse business requirements for information systems and IT application; plan and allocate resources to different IT projects; assess and manage IT projects through their different phases; and integrate information technology with the business process of the organization. The IT industry’s position of the dominant consumer of the products (i.e., potential recruits) the academia has produced has arisen from the variety of roles performed such as those of business analysts – where reasonable technology knowledge coupled with familiarity with business processes and functional knowledge is essential; project managers – where the ability to judiciously balance financial, human and time resources related to IT projects and to modularize and allocate tasks and projects, creating synergies across projects, is required; and technology managers – whose main role is to foster user-centric IT environments in organizations. Given the relatively fewer number of such managerial roles, they assume a far lower prominence under the mass roles of coders, programmers and testers that the industry recruits. Much akin to the changing technology tools that result in the shifting expectations of the industry from fresh engineering graduates for the technology-centric roles, the managerial roles have been equally impacted by the transformation of the business landscape, resulting from the gradual digitalization, increasing customer expectations and of course new forms of organizing. The changes confronted by the IT industry in turn demands a degree of diversity in the academic world that can simultaneously cater to the wide variety of technological platforms, operational strategies and business models.

10  Priya Seetharaman and Jocelyn Cranefield

1.2 Information systems academia in India Academia has played a key role in the development of India’s IT industry. Four distinct areas of the Indian academia’s contribution to the IT industry demand emphasis – visioning, incubating hi-tech ventures, generating and aggregating industry-relevant knowledge and building sustained capacity. Unlike the responsibility of building capability, those of visioning, generating knowledge and incubating call upon academia’s ability to both foresee challenges of the future and play the devil’s advocate in questioning the relevance and viability of various technologies as well as business models. We document below the nature and role of the Indian information systems academia in shaping the IT industry. To enable us to do so, we used the interviews of industry veterans and senior academicians available in the Itihaasa website along with published academic and popular literature. In its initiation and early developmental stages, the Indian IT industry was fostered in the premier academic institutions such as Indian Institutes of Technology (IIT), Indian Statistical Institutes (ISI) and the Indian Institute of Science (IISc). These institutions played multiple roles. Academicians in these institutes were initially involved in creating indigenous versions of software, specifically systems software, to make imported hardware operable; identifying scientific and researchintensive applications for the information technology investments by these institutions; and establishing a sense of curiosity and awareness amongst industry leaders for potential business applications. As the industry’s investment in information technology hardware and software grew, the role of academic institutions in training potential software designers and developers assumed greater prominence. While the knowledge creation role of academic institutions continued through the development of fundamental software technologies and applications, that of knowledge dissemination primarily through education was accorded significant importance. This was reflected in the introduction of new programmes at the undergraduate and graduate level. Computer science departments as centres of research and education in the various Indian educational institutions began with Tata Institute of Fundamental Research (TIFR) in the 1950s followed by ISI Calcutta and IIT Kanpur in the early 1960s, soon followed by other institutions. Through the industry’s evolution, Indian academic institutions, given their ability to educate and train batches of high-quality students, helped indirectly fuel the industry’s rapid growth, both in scale as well as in scope. This was also supported by the steady flow of human

Information systems in India 11 resources from other technical institutions such as the Indian Institutes of Information Technology (IIITs), more than 20 of which were established in phases from 1997. In addition to the government-supported higher education institutions, other private engineering colleges and training institutions attempted to fill the demand-supply gap in the low- and mid-level skill requirements of the IT industry (Joseph and Harilal, 2001; Moitra, 2001). The responsibility of capability building for an industry that grew at whirlwind speeds, especially in a country such as India where the number of ‘hope-full’ potential recruits was enormously high, saddles the information systems academia with enormous pressure to cater to their need for knowledge and skill. This essentially translated to a rapid scaling up of academic institutions, such as in the engineering disciplines, which directly catered to the demands of the industry. Although, the industry’s human resource requirements grew rapidly in the 80s, exponential growth in scale of operations came to it only when the Y2K problem needed immediate attention in many legacy systems and subsequently when the business process outsourcing and other IT-enabled services grew (Balakrishnan, 2011). Debates surrounding quality and industry-readiness of graduating students were common4 and have helped keep the mushrooming of engineering colleges in check. The government, in its attempt to balance the growing need for educational institutions which can ensure a steady supply of human resources to meet the industry’s demand and the possibility of excess supply of certified yet unemployable youth, instituted accrediting mechanisms and agencies such as the All India Council for Technical Education. Such bodies were often called upon to ensure input, process and output quality of various colleges, more so of engineering and technical training institutions. Despite the steep growth of the IT industry and the consequent demand for human resources, the fear of being stuck in the low to mid category of software services, such as maintenance activities, has continued to plague industry players, academicians and policy makers through time (Kapur and Ramamurthy, 2001). While the number of engineering graduates from Indian educational institutions was high, less than 30 percent of them were considered employable by the industry (Raghuram, 2009). As a result, the industry has grappled with the double-edged sword of growth. Scale resulting from outsourcing opportunities required employee strength, but offering value-adding services required higher-order capabilities. Finding quality software professionals was a challenge that plagued the industry through the years, as were high attrition levels (Acharya and Mahanty, 2007). The Indian IT, specifically the software industry, was therefore stuck in

12  Priya Seetharaman and Jocelyn Cranefield a low-innovation trajectory (D’Costa, 2009) which is often seen as being easily imitable (Ambastha and Momaya, 2004). Unfortunately, the traditional education system did not have the capability to rapidly transform itself to cater to the changing requirements of the industry. The contribution of the academia in this direction was therefore minimal in scale, although not in intensity. Innovation and product development-centric initiatives were encouraged, and financial support was made available through multiple methods. The industry came forward to fund product innovation through scholarships, competitions, crowd-sourcing of ideas and the like, while the government helped set up labs and connect industry with the academia to foster industry-ready relevant technology research. More recently, the rapidly changing technological environment has also entailed academia’s involvement in helping the industry chalk out viable business models for the future, while at the same time playing host to a variety of IT-based ventures. An indicator of this role of academic institutions is the recent growth in the number of incubation and business innovation centres set up by both technical and higher education institutions across the country (both governmentaided institutions as well as private).5 These incubation centres fill a major gap in the business ecosystem – that of environments which aid the quick-starting and bootstrapping of business ventures in the hightech space (Kumar et al., 2017). This role is critical mainly because of the risk involved in high-tech business ventures in comparison to the traditional manufacturing lines of business and other established services business such as retail, education and to some extent manufacturing. While centres fostering business start-ups provide material and financial resources, they also present start-ups with an environment that creates far less performance pressures, insulating innovators from the return on investment demands often placed on established firms. Such start-up environments were far more widely prevalent in the developed countries given their tolerance for risk and relatively resource-rich environments, while they were far less common in resource-constrained and conservative socio-economic environments like India. Although the Indian IT industry has grown at an unprecedented and unparalleled pace, the shift towards an environment that actively fosters product innovation has been both slow and delayed. As a collective, the industry was mired in a vicious cycle of growth through scaling up operations fed through a cost-arbitrage competitive position. It is quite possible that this very advantage held back the industry from reaching its full potential with respect to product-centric or even

Information systems in India 13 technological innovation. Moreover, playing second fiddle to service providers or IT product firms inhibited Indian IT firms from being able to envision fundamental breakthrough technologies and applications. Weak domestic demand for software and related services till recently, mainly due to the huge upfront costs of large-scale IT implementation, may have also restrained the industry from focusing on product innovation. Intense and high demand in the domestic environment could have also played the catalytic role of integrating IT-related services into other sectors such as manufacturing, especially high-tech manufacturing, of complex consumer products. Academic literature on the IT software industry has debated the distinction or the lack of it between software products and services (Nambisan, 2001) through the years. A comprehensive review of the arguments surrounding this debate is beyond the scope of our discussion here. However, our point of interest is the implication of the debate for the information systems academia. The industry’s focus on services initially necessitated skills sets such as coding, programming, debugging, testing and maintaining fragmented software applications. With the growing presence of enterprise systems and ERP-integrated organization-wide transaction processing systems, such as SAP and the Oracle suite of products, the expectations from the Indian IT services industry was to provide additive applications, customized reporting tools which were often meant to provide informational capabilities not directly available in the enterprise systems. These required additional skillsets such as project management and some familiarity with functional knowledge and the business domain. On the contrary, an emphasis on software products would have required far deeper domain and functional knowledge, the ability to abstract across organizations and perceive synergies which can help develop products targeted at diverse clients. In other words, the knowledge capital and skillsets required for software services were quite different, albeit with some overlap. The tide is now turning, as we see a rise in domestic demand for software applications and information technology-related services arising from the increasing scale of traditional manufacturing businesses along with the rapid growth of the services sector, such as financial services, hospitality, healthcare and retail. This has also resulted in growth in the demand for automation and embedded technology. Firms, especially in manufacturing, are attempting to embrace digital platforms, although cautiously, in areas of critical interest to them. Ashok Leyland, a 70-year-old automotive manufacturer of heavy vehicles with extensive operations in India, for example, is foraying into incorporating

14  Priya Seetharaman and Jocelyn Cranefield an Internet of Things–based vehicle status tracking system (i-Alert and E-diagnostics), along with social media based recommender systems for connecting customers with company-approved and trained mechanics.6 Such initiatives require significantly different design and development capabilities from both the client firm as well as the service provider. One of the effects of the growing presence of the IT industry in India was the opportunity for research in Indian higher educational institutions in three broad areas – computer science (the scientific and engineering related aspects of computing infrastructure), information technology (aspects related to designing, developing and maintaining applications) and information systems (aspects related to implementing IT applications and understanding the impacts of these applications on individuals and organizational and social systems). Academic research in these three broad areas has progressed in a variety of directions in India much in parallel, although smaller in quantum, to similar developments the world over. A study by Bandi et al. (2014) on information systems academics in India found that the number of active information systems researchers in India was quite limited. They argued that the growing presence of the IT industry had resulted in more lucrative opportunities for young graduates, who are less keen to pursue academic careers in information systems in India. This trend, however, has not been consistent given the peaks and troughs the IT industry itself experienced as a fallout of, first, the dot-com bust, followed by the events of 9/11, the 2008 financial crisis and more recently the restrictions imposed on immigration, especially by the US. The large presence of the IT industry in India and the increasingly critical imminent role of information technology and systems in organizations present both an opportunity and a responsibility for information systems academicians in India. This responsibility, we suggest, extends beyond the role that information systems academia has played and observed so far. The pervasiveness of information, information technology and information systems demand more porous borders, and by extension the information systems discipline has to necessarily transcend disciplinary boundaries.

1.3 Dare to cross This is an ambitious call to information systems academicians to think, research and theorize in interdisciplinary ways. We are not alone in this desire to let go of the self-imposed boundaries (see, for example, Galliers, 2003; DeSanctis, 2003; Agarwal and Lucas, 2005; Walsham, 2012). The very nature and characteristics of many management

Information systems in India 15 sub-disciplines, including information systems, marketing, operations, organizational behaviour and strategy, privilege them with the right to cross boundaries (Agarwal and Lucas, 2005). Sadly though, in our pursuit of ‘truth’, which many of us believe is embedded within our respective disciplinary boundaries, we often forget to exercise this privilege; instead, ignore that it is not merely an absolute privilege arising from affiliation to the discipline, but also a responsibility accompanying such affiliation. As IS academicians, it would be a futile endeavour if we were to assume that technology or information systems can well be studied in isolation, often in a narrow technical sense (Bryant and Land, 2012). If anything, the very information systems that are developed and implemented are meant to serve a purpose, often to address an individual, organizational or social objective. The organizational environment, political structures and cultural mores can never be taken for granted (Madon, 2009), thus necessitating interdisciplinarity. Even more important to us, as researchers of a particular feather, are the gains such cross-boundary pollination of ideas can bring. New learning, emerging issues and innovative solutions are the likely outcomes of interdisciplinary thought efforts (Galliers, 2004). Many calls to information systems researchers to expand horizons have in fact, directly or in a veiled manner, suggested boundary-crossing. We outline three broad ways to cross disciplinary boundaries to achieve interdisciplinarity and transdisciplinarity. While these suggested paths are not unknown to the discipline, we wish to contextualize them in information systems academy in India. By doing so, we aim to draw the attention of researchers and academicians to potentially fruitful endeavours in research, teaching and enhancing praxis. Although we use the Indian context as the background to doing so, we believe this may well be extended to other socio-economic, academic and policy environments that exhibit characteristics similar to those in India. The first suggested means is to evolve themes of research which are reflective of the innate interdisciplinary nature of information systems (Benbasat and Zmud, 2003, p. 185). The second suggested path is to make a conscious attempt to reinforce and highlight the inclusiveness of the information systems discipline. We suggest a third possible means of achieving transdisciplinarity – that of new institution building. We examine these three paths below. 1.3.1 Thematic research areas There can be hardly any doubt that information systems is favourably positioned as a field which is both a ‘discipline’ and innately

16  Priya Seetharaman and Jocelyn Cranefield interdisciplinary (Hasselbring, 2000; Newell, 1983). Although Galliers (2003) argues that treating information systems as interdisciplinary and as a discipline by itself is inconsistent, we do not see an inconsistency. On the contrary, we see it as a befitting characteristic of a discipline which, while possessing an identity, also benefits from the thought-strings that leave it attached to other disciplines (Baskerville and Myers, 2002). It would be a rare theme of research or area of work in information systems which does not by default draw from multiple reference disciplines (Teo and Srivastava, 2007). Given that the discipline is a complex labyrinth of ideas drawn from disciplines as diverse as physics through computer science, economics and psychology to sociology and situated in contexts as diverse as an individual through organizations to nations supported by technology, interdisciplinarity and transdisciplinarity are inevitable in the themes that we chose to study. In socio-economic contexts such as India, the need to situate themes of information systems studies in diverse disciplines should emerge from the themes and research questions themselves rather than as a superimposition. We make this observation given some unique characteristics of these contexts, such as political environments often characterized by whimsical vote-bank politics, rapid economic fluctuations, transitional social environments which attempt to balance the Western notions of development while hanging on to cultural traditions. These give rise to an environment often seen to be chaotic, yet orderly. Individual and organizational response to such environments has often been jugaad, a term used to denote creative solutions and workarounds (Cappelli et al., 2010; Dabholkar and Krishnan, 2013), a phenomenon resulting from a culture of scarcity and constraints. A practical means of identifying themes, therefore, is to draw from issues of concern that emerge from such environments. We highlight the value and viability of this path – thematic research areas – through a few sample research themes. Some of these themes have been explored in the developed country contexts, while others may be more suited to business and social environments such as that in India. We were intrigued by a few questions on contextualizing choice of themes to developing countries such as India. How might the issues and themes play out in the context of India? Are the same issues relevant or is there a need for different ones? A theme of relevance here is the potential for IS research to support human and societal development. In a study of the development and use of a health information system in Himachal Pradesh, Sahay

Information systems in India 17 and Walsham (2017) draw upon Amartya Sen’s Capability Approach to present a theory for how innovation based on information and communication technologies (ICTs) can be linked to human development. Sen’s capability approach is an offshoot of welfare economics, a discipline not often seen to be linked to information systems. The important contribution of Sahay and Walsham is the theorization that combines technological, social and institutional elements in discerning the link between ICT and human development. An identical system (hospital information system) in the developed world context may not yield similar outcomes; some outcomes may not be of such significance in the context of the developed world, such as ‘including the disadvantaged’ where the focus is on providing care in an orderly fashion such as through better management of patient queues. This is a major concern in a country like India, where some state-run hospitals treat as many as 1000 out-patients a day. A few more themes from the “future-of-IS” literature follow. A number of authors, including Melville (2010), Gholami et al. (2016), Malhotra et al. (2013) and Vom Brocke et al. (2013), have stressed the imperative for IS scholars to place an increased emphasis on studies of green information systems and environmental sustainability, given the transformative potential of green IS in the face of the critical global issue of climate change and its impact on sustainability. For example, Melville (2010) has emphasized the innovative potential of IS for influencing beliefs, enabling and sustaining new practices and processes, and improving economic and environmental performance. Such themes enable the discipline to entrench itself in issues of practical concern. However, adapting themes such as these to the Indian context also requires IS researchers to go beyond the obvious implications, such as the need to keep in mind the debates surrounding development and growth on one hand and environmentally sustainable practices on the other. Social and political stability, a characteristic of advanced societies, is hardly universal. IS research questions, especially those in the realm of socio-cultural or political issues such as information personalization, data privacy, civic engagement, political participation, etc., may not be equally global in nature. These demand significant localized and contextualized research. A recent study on the social media use by political parties in India, especially prior to the elections, suggested the possible mirage of a government that is responsive to citizen’s needs (Rodrigues and Niemann, 2017). Such issues assume immense importance as the disparity between the digital haves and have-nots are bridged in countries like India, albeit conditioned by the limited

18  Priya Seetharaman and Jocelyn Cranefield changes in fundamental development parameters such as access to education, healthcare and livelihood. Other interdisciplinary themes including big data, often assumed to be specific to organizational information management, may quite likely have significant implications and relevance for life sciences. This would demand not only research that focuses on techniques and mechanisms of handling big data and garnering deep insights into various phenomena in these disciplines, but would also require us to help data specialists and machine learning scientists familiarize themselves with those problem domains. Effectively, our big data curricula have to be more interdisciplinary (Jacobi et al., 2014), supported by our own research in these themes. Choice of themes which are relevant to information systems practitioners, managers – functional and technology alike, individual users in organizations and people in society, in general, would be an appropriate sign of the discipline’s contribution (Moody and Buist, 1999). In order to ensure information systems academics extend their frontiers of research into these themes, be more relevant to praxis while at the same time continue to draw from the discipline’s existing knowledge base, they need to more actively collaborate with academics from related disciplines, as well as with those in practice. 1.3.2 Inclusiveness Like every other discipline which strives to protect its turf, information systems academicians attempt to defend, protect and develop the discipline. This is an honourable objective, driven by the wish to shore up the future of the academic discipline. Manifestations of the desire to preserve the disciplinary identity have been visible in the numerous calls to focus studies around the IT artefact (Benbasat and Zmud, 2003), to generate IS specific theory (King and Lyytinen, 2004) and to publish predominantly in IS journals. These calls, however, are, we must remember, addressed to academicians who are themselves from a diverse set of fundamental disciplines. As Keen, quoted in Galliers (2003), put it, ‘our backgrounds, training and interests are very different’. By restricting the discipline through our actions to define, develop and defend our identity, we are discarding the very essence on which the discipline is built – its diversity. It is only appropriate that to prevent any further loss to disciplinary thought, we attempt to inculcate a semblance of inclusiveness. Such inclusiveness can take multiple forms. For one, information systems as a discipline can be inclusive by welcoming and supporting

Information systems in India 19 academicians affiliated with other related disciplines such as organizational behaviour, marketing and operations management to publish in areas of research traditionally considered part of information systems. Given that information systems has long been considered a derived discipline which has drawn from other reference disciplines, its innate characteristic is one of being inclusive with respect to disciplinary boundaries (Saunders in King et al., 2010). If anything, the discipline of information systems has taken pride in its ability to draw from a wide variety of social and management sciences and apply theories from these disciplines to enhance our understanding of information technology use by individuals in organizations and society. This is often made possible by the backgrounds and dominant training of many information systems academicians. To give some examples, Mary Lynne Markus, considered a pioneer in bringing together organizational behaviour and information systems, received her Ph.D. in Organizational Behaviour from Case Western Reserve University. Shoshana Zuboff, well known for her treatise on the relationship between information and work, was trained in social psychology. Eric Clemons, best known for his work in relational database systems, holds a Ph.D. in Operations Research with a specialization in information processing and a minor in mathematics. We collated the educational background data (highest degree obtained) of academic faculty members in information systems and information technology departments across the top 10 business schools in India and found that out of 84 information systems faculty members in these schools, over 50 percent of them have their last degree in information systems as their major. One-quarter of them are doctoral degree holders in computer science, while a few also come from backgrounds such as sociology, industrial engineering and rural development. However, we believe that in the context of India, inclusiveness through membership and affiliation may assume a far greater significance than in the Western academic world of information systems in the time to come. This is primarily due to the relatively small number of specialized doctoral studies programmes in information systems available at academic institutions in India. Second, the unique socio-cultural milieu, the complex economic and business environment combined with the overwhelming position occupied by the information technology industry generates a far more intricate set of themes that demand interdisciplinary perspectives. India, for instance, churns out close to 1.5 million engineers every year, while some studies show that a considerable proportion of them are not industry-ready.7 Yet, the IT industry continues to be the largest employer. Social challenges

20  Priya Seetharaman and Jocelyn Cranefield including emigration, reverse migration (Fuller and Narasimhan, 2007), gender bias, income- and caste-based disparities seem to coexist in an otherwise economic growth-oriented policy environment. To give one particularly stark example, a recent World Bank study revealed that the poorest households in developing countries like India are more likely to have access to mobile phones than to sanitation.8 How then should information systems academicians in India strive to choose themes which are meaningful to the social and business context that they work in? The uniqueness of these environments calls for much more than compartmentalized research by academicians steeped in blinkered perspectives. They leave us little choice but to be more inclusive. Collaborative co-authorship in research, another manifestation of the inclusiveness of a discipline, is fairly low (such as 14 percent and 16 percent for behavioural and economics sub-networks) when one counts collaboration with academicians from outside the discipline (Oh et al., 2005). On the other hand, single authorship papers have drastically reduced in numbers, indicating the willingness of researchers to collaborate in general (Xu et al., 2014). At the cost of sounding repetitive, we see collaborative co-authorship as more of a necessity in the Indian academic environment given the increasing pressures of teaching, especially in the premier educational institutions, both public and private alike. Such pressures arise from the responsibility of these institutions to fulfil their obligations to a growing student populace and their desire for high-quality higher education. Third, inclusiveness can also be manifested in making research in information systems more accessible to practicing managers and by including practitioners in research partnerships. This is critical in contexts such as that of the Indian business and social environment, given the problems of resource constraints, the high degree of diversity in the technology users’ capabilities and cultural attributes intrinsic to such social milieu. Practice-oriented research ensures relevance of academic research, but also necessitates faster delivery of research results, which may at times lead to a compromise on the study’s rigour, scale and/or generalizability. Traditionally, teaching and training mid-career professionals have been ways to make academic research more accessible to the industry. Collaborative agenda setting and collaborative research practice are two additional means. While collaborative agenda setting allows the involvement of academics from other disciplines and practitioners in identifying focus areas of research and study in the information systems discipline,

Information systems in India 21 collaborative research practice aims at a more intense role for practitioners and non-IS academics. Mathiassen (2002) defines collaborative research practice as “a way to organise and conduct practice research in close collaboration between researchers and practitioners” so that there is joint engagement in and commitment to the process, resulting in outcomes that are of mutual value. A shift in incentive practices and the creation of environments that foster collaborative research practice and encourage such activities are necessary to ensure the success of any attempts to bring about collaborative research practice. Ramiller et al. (2008) argued that some research streams, which can be classified as esoteric, are often unlikely to make any meaningful, substantive connections with industry discourses. Mathiassen (2002) offered a solution to this and suggested that by organizing collaborations between researchers and practitioners as loosely coupled systems of related agendas while at the same time implementing learning cycles of understanding, supporting and improving practice, research institutions can allow such connections to be established. Action research, experiments and practice studies can be combined with other research methodologies to make academic research more practice oriented while increasing active engagement of practitioners (Moody and Buist, 1999; Ramiller et al., 2008). Finally, apart from research, we as information systems academics can also use our courses to achieve higher degrees of interdisciplinarity. The idea of interdisciplinary courses are not new, yet as academicians who “teach” future professionals, we often ignore the notion that their roles in organizations and in society are not compartmentalized and, in fact, require our graduates to be equipped with a variety of methods and means to analyse work situations, different ways of thinking about problems and solutions and be prepared to handle diverse facets of the context in which they work. Recruiting organizations expect graduating students to be industry-ready, not to have them spend time learning the ropes. Interdisciplinary courses may be one means of building these complementary skills and knowledge in participants. Deng et al. (2016) compared CESM (computing, engineering, statistics, or mathematics) graduates with business graduates in analysing the skills, knowledge and abilities (SKAs) suited for business analytics and business intelligence role profiles and concluded that offering “double-majors” or giving SKAs through crossdisciplinary approaches may help fulfil recruiter expectations. Similarly, Jacobi et al. (2014) have proposed a design model for interdisciplinary information systems curriculum development drawing from big data as a case in point. In order to operationalize such “double-majors”

22  Priya Seetharaman and Jocelyn Cranefield or interdisciplinary course enrolments, institutions and their policies need to be structured differently. 1.3.3 Institution building The prevailing diversity in research themes, courses and most importantly, schools of thought and training of information systems academicians, while by itself an indicator of the attempt to extend the frontiers of the discipline, is also a pointer to future possibilities. It is in the best interests of the information systems discipline to strengthen our institutions while at the same time build new ones that can enable us to extend networks beyond our community, allowing us to explore ideas and influences from outside (Walsham, 2005). By the term ‘institutions’, we refer to academic institutions – universities which need to recognize the innate interdisciplinary nature of information systems as a discipline and move away from a strict compartmentalized definition. Policy changes at the level of academic departments and institutions are required in order to recognize and appreciate research and teaching in unbounded academic themes. Academic institutions should welcome prescience, especially since information systems essentially has at its core, the rapidly changing IT artefact. If the very definition of the core concept of information technology is constantly evolving, then the discipline that strives to understand the individual and organizational use of it and seeks to suggest management mechanisms to shape such use should be equally evolving by nature. It is therefore imperative that academic institutions take cognizance of the discipline’s inherent interdisciplinary, evolving nature. In addition to academic institutions and universities, our journals, conferences and special interest groups are also institutions which we can use to steer the course of the discipline’s evolution (Walsham, 2005). Editorial boards of journals have more than a gatekeeping role to play. In a recent communique to the information systems academic community, the editors-in-chief of the editors-in-chief of seven journals recognized by the Association for Information Systems (often referred to as AIS senior scholars’ basket of journals re-emphasized the role of editors and reviewers as more of gatekeepers of rigour than gatekeepers of ideological stances (Saunders et al., 2017). In an earlier article as the editor of MIS Quarterly, Saunders (2005) had used the analogy of the diamond cutter to envision a more developmental role for reviewers. In our own humble opinion, we see a more beaconlike role for senior scholars, editors and reviewers rather than one of gatekeeping or diamond cutters. We envision them holding the light

Information systems in India 23 high for the discipline to progress, identifying directions of research, teaching, strengthening institutions, daring to question conventions and wielding the wands of change to enable altering the direction that information systems academia should explore. There is an increase in the expectations from information systems research and education to cater to the needs of both the IT industry and user industries in countries like India, especially from the traditionally information intensive industries such as financial services, healthcare and hospitality, but also along with the rapidly changing manufacturing industry where the integration of information with physical products through technology platforms such as Internet of Things (IoT) is now the norm. The recent interest from institutions such as Institution of Engineering and Technology (IET), supported by the Government of India and leading industry players, to hold the IoT India Congress – a platform for accelerating industry’s interest in IoT – is an indicator of the potential collaboration of academia, research and industry in building institutional environments for the future.9 Apart from seeking inputs from industry leaders, in their hierarchically senior role of institution building, senior scholars need to play one very significant role – that of boundary spanners. By being boundary spanners, they foster relationships, create interconnections and transcend disciplinary boundaries not merely drawing from the past in choosing frontiers to extend but bringing forth their foresight in identifying the neglected wilderness of knowledge spaces. While we may not wish to tame all of such wilderness, by persisting in our efforts to span boundaries, the discipline may ensure it fulfils the very purpose for which it exists.

1.4 Conclusion It may well be our wishful thinking that the academicians in the information systems discipline will encourage and dare themselves to cross disciplinary boundaries. Our aim in this chapter was to traverse the evolutionary timeline of the information technology industry in India and using that perspective position and contextualize the information systems academic world in India. While we refrain from using primary empirical data to substantiate our observations on the role, contribution and challenges of the information systems academia in India, we have used anecdotal evidence from various secondary sources and academic literature to join the dotted line relationship between the two. With these in the background, we attempted to issue a call to information systems academicians, worldwide, but also in developing

24  Priya Seetharaman and Jocelyn Cranefield countries like India to dare to cross disciplinary boundaries to help strengthen the role and position of the discipline, sustaining its relevance in an increasingly complex canvas of research and practice. Perhaps, triggering a set of top-of-the-mind questions may help us place and structure our thoughts and debates on why and how we can do this. Where are the new frontiers in information systems theory, methods and practice? What are the contributions that information systems is making to the larger debates raging in social, economic contexts? Can information systems as a discipline assume a leading role in triggering debates and discourses in the socio-economic context? What is the discipline’s impact on other disciplines (Agarwal and Lucas, 2005) and on practice (Hardaway, 2008; Bryant and Land, 2012)? As information systems academicians, what is our collective contribution; where are we making this contribution? What more should we be doing to enhance our contribution? How can we further promote the role and place of information systems in society and economy? Can interdisciplinary and transdisciplinary approaches help in entrenching our role and drive more impactful, relevant research, education and practice? How can we ensure greater focus on interdisciplinary themes, being inclusive and building institutions geared towards such interdisciplinarity? As Pollock (2007) argues, in daring to cross disciplinary boundaries, ‘a different kind of knowledge emerges in the act of intersection and traverse of varied fields through which a shared concept might travel’. If not only ideas were memes, but so were researchers! We could traverse through an abstract conceptual space, stopping by to connect to researchers in those spaces, maybe even taking them along in our journeys across thematic spaces.

Notes 1 www.itihaasa.com/ 2 Available at http://eprints.nias.res.in/107/2/idpadfinalreport.pdf 3 Such as Infosys’s Campusconnect initiative. 4 https://tinyurl.com/McK-India-Tech-Opp (Last Accessed Dec 20, 2017). 5 For a comprehensive list see www.startupindia.gov.in/uploads/pdf/List_of_ Incubators.pdf (Last accessed Nov 14, 2017). 6 https://cio.economictimes.indiatimes.com/news/corporate-news/howashok-leyland-built-its-digital-marketplace-to-create-new-revenue-streams/ 60356777 (Last Accessed December 1, 2017). 7 http://mckinseyonsociety.com/downloads/reports/Education/Education-toEmployment_ FINAL.pdf (Last Accessed December 18, 2017).

Information systems in India 25 8 http://documents.worldbank.org/curated/en/896971468194972881/ pdf/102725-PUB-Repla cement-PUBLIC.pdf (Last Accessed December 18, 2017). 9 www.dqindia.com/iet-india-launches-second-edition-of-iot-india-congress2017/ (Last Accessed 25 December 2017).

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Part 1

Technology in action An Indian perspective

2 Automation and computers Hasten slowly1 Ramachandran Natarajan

I am not for free trade and I am not for protection. I approve of them both and to both have objection. For going through life I continually find it is a terrible business to make up one’s mind. So in spite of all comments, reproach, and predictions I finally adhere to unsettled convictions. – A poem about Lord Balfour (Irwin, 1994)

2.1 Introduction It seems that muddling through decisions was a characteristic of the British Prime Minister, Lord Balfour. Rajiv Gandhi, the young Indian Prime Minister, seems to be providing a study in contrast with regard to one thing at least – his commitment to science and high technology for launching India into the 21st century. Ever since he became prime minister he has been stoking the fires of a love affair he wants India to have with high technology. There is nothing new in leaders of developing countries emphasizing science and technology to raise the standards of living. This tradition reaches as far back as Lenin and of course Jawaharlal Nehru, India’s first Prime Minister. But what is new in the case of Rajiv Gandhi is the speed with which, in his regime, measures have been taken and policy changes made in the pursuit of this goal. For example, in the field of electronics, imports have been liberalized, import duty on computers have been cut and in certain cases completely eliminated, and incentives have been provided for foreign firms to set up manufacturing of components, materials and high-tech items. Ambitious targets have been set. The production for the electronics industry as a whole is supposed to grow six-fold at the end of the seventh plan over the levels in 1984. The various ministries and agencies of the government, such as banks, are taking steps to progressively computerize their operations. The word computer has acquired the

34  Ramachandran Natarajan significance of a ‘mantra’ in social parlance and the computer specialists have become the high priests of the silicon chip religion. Certainly, a lot of the brouhaha about computers and high technology seems justifiable because the microelectronic revolution has ushered in a new era in human history. The development of the microprocessor in 1971 is considered a landmark in this revolution. As in the case of many other technological breakthroughs, political and economic considerations influenced the pace of development and diffusion of these new technologies. In the U.S., in the sixties, the growth of the electronics industry was supported by a stable demand for military and space applications. Because of the assured market conditions, many small innovative firms were able to move down the learning curve and cut costs as well as develop new devices. In the 1970s, the applications in the civilian sector increased and these firms were able to expand. The electronics industry now is the major industry in the U.S. and Japan, next only to autos in importance. The impact of the microchip has been all pervasive. It has led to the development of new consumer goods like digital watches, calculators and video games and has drastically transformed the existing products such as computers, washers, autos, typewriters, machine tools and sewing machines. Incorporating the microprocessor has made these products ‘smarter’ and endowed them with information processing, storage and self-monitoring capabilities. It has also made some of the traditional products more flexible and reliable through the replacement of mechanical components. This trend is likely to continue into the future. The impact on the economy in many developed countries has been even greater. In major industries like telecommunications, printing, banking and insurance, health services, productivity, scale economies and cost structures have been considerably affected. In oil refineries, chemical factories, paper and steel mills and other process industries, computerized control systems have enhanced productivity and quality. In manufacturing, automation has evolved to a stage where integration of activities at an unprecedented level has been made possible by employing the new information and control technologies. If we think of manufacturing as consisting broadly of three different kinds of activities, (a) design, (b) physical transformation of materials and (c) coordination and administration of operations, then in the preelectronic organization of manufacturing systems, automation existed to various degrees in each of these spheres; but today integration across all the spheres is possible, leading to systemofacture (Kaplinsky, 1985). This development is of great strategic significance. This makes

Automation and computers 35 possible (Ernst, 1985) the synchronization of manufacturing activities such as product design and plant operations worldwide and production on a decentralized scale, with centralized control over the various aspects of production. These new microelectronic-based technologies have also created economies of scope, through which the production of a collection of differentiated products with the same basic designs becomes cost effective (Goldhar and Jelinek, 1983). The flexibility provided by the new technologies through programmable automation has created new opportunities for small-scale industries. Now, instead of reaping economies of scale through large volume production of standardized products, by using specialized, dedicated equipment smaller firms can compete by serving niche markets with custom-built products. Systemofacture becomes economically feasible even for firms with low volumes of output. This electronics-based integration of the three spheres of manufacturing into a single sphere is surprisingly similar to the organization of production that existed in craft-type pre-Industrial Revolution enterprises. Piore and Sabel (1984) have labelled this phenomenon as the second industrial divide with craft-type production systems again gaining dominance (which they lost during the Industrial Revolution – the first industrial divide) over mass production systems. Accompanying this radical transformation of the landscapes of the industrial and service sectors of the economy is the loss of jobs in the industries which employed electronic technologies. Unlike other technological changes, microelectronics affects employment throughout the economy because of its broad range of applications in the workplace. Typically, products with microprocessors in them require less labour than the products they displace. The Swiss watch industry, for example, lost 46,000 jobs in the seventies as customers started buying electronic watches made in Japan and the U.S.; 17 Swiss watch manufacturers went bankrupt during this period. In many of the traditional industries, use of microprocessor-based technologies will lead to the reduction of labour requirements. Computer-aided design, flexible manufacturing systems, robots for welding, assembly and painting, and electronic printing are some of the examples of labour-saving devices used in manufacturing. The textile industry, a traditionally labourintensive industry in which the developing countries have enjoyed a comparative advantage, is being progressively automated. In Japan, efforts are underway to develop a computerized system using robots in communication with the retail outlets that would transform cloth into suits and dresses untouched by human hands. With the arrival of

36  Ramachandran Natarajan the word processor, service industries such as banking and insurance, where main activities centre around the collection, storage, processing and transmission of information, can operate quite efficiently with very few people. Drafters, sales and billing clerks and secretaries are some of the many kinds of jobs likely to be affected or eliminated. The microelectronic revolution touches echelons of the managerial cadre as well. As top managers start using advanced personal computers connected to a network of other computers, subordinates who feed them information, like financial analysts, production and inventory controllers and executive assistants, will become superfluous. This technology directly challenges the advantage humans have so far enjoyed – the ability to process and interpret information – and has led economist Leontief to predict that humans will become redundant, like horses after the Industrial Revolution were. Some researchers prognosticate that the worst is yet to come, as it is only in the 1990s that the job losses due to microelectronics will really make themselves felt.

2.2 Macro policies: an evaluation It is clear that a technology with such momentous implications cannot be ignored by any developing nation. It will necessarily have to deal with the consequences for itself. But at some point, infatuation with high technology and going overboard has to give way to realistic discussion of the options available to a country like India. Given the all-pervasive impact of this technology, any macro-level policy making in this area should first recognize the need for an integrated approach that addresses (i) technology policy for the acquisition and indigenous development of hardware, software, peripherals and other high technologies, including automation, robotics, etc.; (ii) aspects of the infrastructure to absorb and adapt the acquired technologies; (iii) effects on employment in the short and the long run; (iv) use of these technologies for stimulating growth and productivity in the economy; (v) workforce planning and skill development; and (vi) the issues of private sector involvement and the nature and extent of government intervention. The response so far can at best be described as fragmented and uncoordinated. The latest technology import policy in India for promoting high technology is to allow for equity participation of foreign suppliers in public and private sector collaborations. This mode of transferring high technology from abroad is to be preferred over the outright purchase and adaptation of technology. An underlying premise of this open-door import policy seems to be that the latest technology is not going to be available and, even if it is available, the public and private

Automation and computers 37 sector organizations in India will not be able to absorb it, hence the suppliers of technology, primarily transnationals, have to be induced through equity participation and management of the joint enterprises in the public and private sector. The policy has also been shaped by the circumstances of domestic resource constraints with foreign capital now being viewed as a substitute rather than as a supplement to domestic capital. Whether such a policy will lead to the indigenization and adaptation of the acquired technology remains to be seen, but if experience is any guide, the expenditures in foreign technical collaborations have not achieved any significant results.2 This policy as it applies to microelectronics is similar to the ones followed by other developing countries to promote foreign investment in high technology industries through tax incentives and subsidized overhead costs. But serious reservations have been expressed concerning its effectiveness, because these incentives may not serve as sufficient inducements for leading U.S., Japanese or West European electronics and computer firms to alter their global investment decisions (Ernst, 1985). Also, the competition among advanced countries themselves for such investment is quite intense, and thus countries like India may not be able to compete for high-tech investments by transnationals. This picture is further complicated by growing technological protectionism in advanced countries. The advantage of cheap labour in developing countries has eroded due to computer-based automation. Many of the leading firms are automating their offshore production facilities in the Third World on a selective basis. These firms are unlikely to disturb their pattern of investment and opt for investment in new technologies in India, which is likely to disrupt their global coordination of worldwide sourcing networks. With particular reference to semiconductor manufacturing (which has been characterized by extreme fluctuations of demand), Third World production facilities have been considered as a buffer against demand uncertainty. Also, with increased capital intensity of semiconductor manufacturing, these facilities are being automated. The implications are that such facilities, even if located in India, are likely to have uncertain utilization rates and create very few jobs. It is not clear, therefore, whether India will be able to attract the technology it wants in the microelectronics field through this policy. This brings us to another important aspect of policy making in this area – which is, having an awareness of the feasibility of certain kinds of technologies being developed and absorbed at the present historical conjuncture in India’s development. Clearly, technological autarky is not a viable option. Historical experience (Japan, Germany) suggests that technological progress in many countries has come about through

38  Ramachandran Natarajan the diffusion of technologies developed elsewhere. For example, textile mills were started in New England, in the U.S., by Samuel Slater and others by using (some would contend that it was by stealing) the technology developed in Britain. Indeed, Alexis de Tocqueville, a discerning observer of the American scene, had described the young republic of the United States as a land of copiers. A poor nation like India has to select and focus on those technologies that would speed up its development. Selection has to be made taking into account the characteristics of the technologies themselves, as well as the opportunity costs measured relative to the meeting of development goals. For instance, the semiconductor technology in recent years has been characterized by (i) economies of scale not only in production but also in research and development and (ii) rapid progress in technology as well as fluctuations in demand. Only a few U.S. firms and Japanese conglomerates with financial stamina have been able to survive in this turbulent environment. It would obviously be unwise for India to be in the forefront of this technology. Even if state of the art technology is not used, adequate demand must be present to justify high capital expenditures and exploit economies of scale. The Department of Electronics seems to have ignored such considerations in the case of components production in India. Production of components is quite small, while the demand for computers and consumer durables which use these basic components has grown. The imports of components were liberalized to meet this demand, while at the same time the government-owned semiconductor complex is operating at a very low capacity and is losing the opportunity for upgrading its technology through learning by doing. For many of the high technologies which have high fixed and start-up costs, backward and forward linkages for growth has to be taken into account. Many of the frontier technologies are increasingly going to be denied to India, no matter what the inducements are, due to growing protectionist sentiments. But there is no need to despair, for examples abound of revitalizing obsolete technologies through the design of appropriate social policies and organizations.3 Also it is not always true that the latest technology is needed to compete in the world markets – witness the example of U.S. manufacturing losing its competitive edge despite its access to the latest technology.4 Allowing the import of technology to stimulate competition and productivity is in principle a sensible objective, but its effects on indigenous research and development must be assessed. Thus, selectivity must be built into such a policy. Here, not only the composition but also the timing of imports becomes crucial. Certain promising indigenous high technology research and development efforts have to be

Automation and computers 39 protected by providing markets and by banning competing imports. Every technology needs a niche of application to survive. Even the steam engine (the Newcomen version) had to have an application in coal mines for pumping water for 20–30 years before James Watt’s improvement with an external condenser for cooling came along. In modern times, the military has often underwritten the development of high technology – numerically controlled machine tools, integrated circuits, microelectronic guidance and control systems, laser, etc. are some of the important examples. There are two examples where government policy in India has not been sensitive to the promotion of indigenous high technologies. In the case of LCD (liquid crystal display) technology, the commercial LCD watches market, which would have enabled the technology to be further developed and costs brought down through learning and economies of scale, were closed to the public sector organization that developed it (Vyasulu et al., 1986). This allowed the low-priced watches from Taiwan and Hong Kong to capture the market in India. They were priced low to penetrate and maintain new markets, which would in turn lead to automation of mass manufacturing and further cost reduction. At the same time, the import of LCD devices was allowed, shutting out other market opportunities. Another is the case of computer software, where the latest policy aims at promoting exports. In order to stimulate exports, it allows for liberal imports of software from abroad, which in turn will presumably spur the development of indigenous software which can then be exported. In a field where the product obsolescence rate is very high, India would be better off developing software for local applications first and using this base for exports later. This clearly requires protection to be extended to the indigenous software developers for some time and at a later date that protection to be withdrawn after review. Without such protection, the small companies who have been developing most of the basic software in India will go under, as the small Indian market will now have to be shared with already tested and proven imported brand name software (Arun Kumar, 1987). In this area of strategic importance to the country, the nurturing of indigenous skills is important. Further, in the case of technology- and skill-based products, success in domestic markets that provides the production and marketing experience is crucial for successful entry in the international markets later. Clearly, what is needed is a policy mix that fosters domestic competition and efficiency and at the same time extends protection from outside competition. If the domestic software capabilities are eroded, it will have serious implications for keeping abreast of the fast-moving developments in this field. Absorption and

40  Ramachandran Natarajan refinement of the imported software and finally the objective of exports itself will be in jeopardy. Certain applications in the government sector should be reserved for domestic software producers even if this would slow down the pace of computerization. Software for special applications can always be imported. It would be naive to expect the domestic software capabilities to equal that of the imports right away, but opportunity must be provided for catching up given the strategic importance of this field. In this context, it is instructive to examine the strategy followed by Brazil (Botelho, 1987). Brazil alone amongst the newly industrializing countries has followed a policy of promoting Brazilian-owned firms that will serve the domestic computer market. Brazil also has a comprehensive approach to a broad field called informatics, covering microelectronics, automation, computer hardware and software and peripheral equipment. The National Informatics Law of 1984 reserves the domestic market for micro- and minicomputers and peripheral equipment for Brazilian ‘national’ companies. The Brazilian ‘national’ companies are those with at least 70% Brazilian ownership, and management and technological decisions being controlled by Brazilians. The market reserve policy, to be in effect until 1992 when Brazilian firms are expected to become internationally competitive, is quite popular in Brazil. It enjoys the support of political groups, public interest groups and professional associations but has been challenged by pressures from many U.S. firms. One of the factors motivating this policy was that foreign technology (mostly from the U.S.) for computers through joint ventures was denied to Brazil in the 1970s. The market reserve policy has resulted in increasing the bargaining power of the Brazilian firms and, after it went into effect, many foreign firms were willing to share the minicomputer technologies. The standard criticisms against such a policy, though it is widely practiced by many countries, are that it leads to technological backwardness, consumers pay higher prices for inferior products, due to sheltered markets local firms lose the stimulus for innovation, etc. These outcomes are no doubt possible but do not necessarily have to materialize. In the case of Brazil, for many types of computers, the prices are lower than their U.S.-made counterparts and are internationally competitive. Brazil has adopted, in the face of threats of retaliation from the U.S., a policy for informatics which is flexible, pragmatic and at the same time in its national interest. The small size of the market in India has always acted as a constraint against investment in research and development and the introduction of product and process innovations, but microelectronics, through flexible programmable automation offers

Automation and computers 41 an opportunity for small-scale production systems to compete without being constrained by large production volumes. It provides planners in developing countries with an option for upgrading quality and productivity in the small-scale sector and encourages decentralized production in smaller urban centres. There are several examples of CAD (computer-aided design) systems and CNC (computer numerically controlled) machines and microcomputers being used in production processes and in management by small and medium sized firms to improve efficiency and quality in Hong Kong, Singapore and Brazil. In India itself, there is an example of a cooperative society using microprocessors for measuring and recording the fat content of milk (Bhalla, 1986). The main obstacles to the adoption and the diffusion of these technologies in India would be infrastructural. Skilled workers, support services, consultancy and help in the adoption of the new technologies, centralized marketing and distribution of the output of many of the small-scale firms and, in some cases, protection of markets through subcontracting relationships with bigger firms would be needed. Success in this area depends more on the design of suitable social organizational forms to benefit from the new technology. The computer policy in India is not comprehensive enough to consider such potential for decentralized production. Perhaps the most important consequence of microelectronic technologies is the technological unemployment it entails. So far, all the preceding technological innovations were accompanied by growth in employment and real wages, but this is no longer going to happen with the microelectronic revolution. These technologies have embodied in them the functions of the human nervous system and, therefore, can do away with human inputs altogether. It can be argued that new jobs will be created for programmers, computer technicians and maintenance people, but it is clear from the experience of advanced countries that on a net basis, jobs are lost due to automation and introduction of computer-based technologies in manufacturing and service industries. Within the electronics industry, which has been targeted for promotion and growth in India, Ernst (1985) has reported that the job-creating potential is negligible. In India, the service sector consisting of banks, administrative services, railways and telephones and educational services will be the prime targets for computerization programs. Operations in these areas, which have remained labour-intensive hitherto, will be radically transformed by computerization. The unemployment in these sectors could have serious political repercussions. There is no articulation of this particularly sensitive issue at the policy-making levels, except for some references to retraining and workforce needs

42  Ramachandran Natarajan for computerization. Countries like the U.S., U.K. and France are still grappling with this problem and are still in the process of developing mechanisms and institutions to cope with the situation. Even in Japan, a country thought by many experts to be best capable of handling this problem because of the cooperation between management and labour, job losses due to automation are producing strains in the social fabric (Yoder, 1985). Economist Leontief has suggested a shortened work week and incomes policy as one of the solutions which would not obstruct technological progress. Among the developed countries, Austria seems to be one nation where a systematic attempt has been made using input-output tables to quantify the impact of automation on blue- and white-collar jobs on an industry-by-industry basis (Leontief, 1982). Several scenarios examining the impact of various combinations of proposed policies (like a shortened work week) and no, partial and full-scale automation on unemployment have been developed. Exercises along similar lines have to be carried out in order to assess quantitatively the impact on jobs in India. Such efforts could also help identify workforce requirements to implement computerization. Government has to play a role in determining the rate at which computerization has to take place in many of the government organizations themselves. Again, in Austria, the government intervened actively by developing a plan (using the model described earlier) for the newspaper industries for smooth introduction of advanced labour-saving technologies. It may be noted that in the U.S. and U.K., the introduction of the same technology led to work stoppages and labour disputes. Without an advance plan for coping with unemployment, organizations will end up with computers and excess labour resulting in lowered productivity. The alternative of allowing mass unemployment is not politically acceptable under Indian conditions. The computerization and promotion of high technology in India is coupled with the strategy of exports to stimulate growth. Targeted exports include not only software but also other products from the electronics sector, as well as other traditional exports which would now be able to compete because of the use of computers and related high technology in their production. There are some barriers to realizing the goals of export-led growth (exports target is ₹10,000,000,000 per year at the end of seventh plan). Since 1973, the economies of developed countries have grown at a much slower pace relative to the quarter century after the Second World War. Further, this trend is likely to continue into the year 2000. Also, increasingly, these countries are turning to protectionism for reducing their

Automation and computers 43 trade deficits. This means less than sanguine prospects for exports from India. The Gang of Four of East Asia (Hong Kong, Singapore, Republic of Korea and Taiwan) have already become the leading exporters of computer hardware, peripherals and other industrial electronics items and would provide stiff competition to Indian exports. The exporting firms in these countries have already travelled down the learning curve in mastering the technology, which is usually imported, and can now compete based on quality and price. As far as exports of software are concerned, the large Indian firms in the private sector export software experts to the host country to work on specific applications than export software per se (Kumar, 1987). The firms that do develop software are small ones which would find penetrating major markets such as the U.S. very difficult indeed due to high entry and marketing costs. In fact, the building up of their skills and their very survival is being threatened by the liberalization of imported software. As far as traditional labour-intensive exports like textiles are concerned, the microelectronic technologies have neutralized the price advantage due to cheap labour. The textiles industry is now highly automated in developed countries and turns out products which are cheaper as well as of superior consistency and quality and with reduced lead time for production. Also, it follows as a corollary that if exports do not materialize, then job growth in the exporting sector will not take place either. The new government policies envisage an increased role for the private sector in upgrading the technological capabilities in India in areas such as telecommunications, electronics and oil exploration. But the Indian private sector has not risen to the occasion so far – for example, the investments made in the electronics area are not adequate.5 Many of the private sector units prefer foreign collaborations. In the area of software development, where it can be argued that India has an advantage because of cheap skilled labour, the bigger firms have proved to be less dynamic than the smaller private firms. It is very likely that these firms in the private sector are responding rationally to the risks in an industry where products become obsolete rapidly. This brings into focus the role of the government. The government cannot follow a hands-off approach in these industries. It has to socialize some of the risks by underwriting investments as well as provide market opportunities. At the same time, it has to stimulate domestic competition and increase efficiency in its own enterprises. The recent success story of the Republic of Korea has more to do with the visible hand of government with a strong political commitment to economic development

44  Ramachandran Natarajan than with exports stimulated by cheap wages (Westphal, 1987). The government played an active role in promoting technological change and initiated policy measures to sustain the assimilation of imported technology and reward international competitiveness. The responsibilities of the government (as the guardian of public interest with all its characteristic inefficiencies, for lack of better institutions) in India are even greater with respect to the advanced microelectronic technologies because of the threats of mass unemployment. The challenges facing the government machinery in policy making and in bringing about institutional changes is a formidable one, and understanding of the dimensions of the problem and the limits on the available actions is only the first step. In summary, considering all of the above issues, the sensible strategy for India seems to be to proceed with computerization in certain selected sectors which are vital to the economy – telecommunications, railways, etc., as well as in small-scale sectors where new jobs could possibly be created with programmable flexible automation. It would be unwise to fall into the Luddite trap and reject computerization, but the areas of application and the pace of diffusion must be carefully targeted considering the bigger picture, which must include the social and political aspects of technological unemployment. This should be complemented by appropriate protection for promising indigenous high technology developments and programs for computer education and training. A broad front approach to applications with an opendoor import policy without a program for assimilation of these technologies can only deplete the foreign exchange reserves and increase technological dependence.

2.3 Implementation: some micro aspects The implementation of advanced microelectronic technologies poses a unique set of problems that have to be overcome before their full potential can be realized. Resistance to change is to be expected from groups who are likely to lose jobs as well as from those who do not understand what it is all about. In a labour surplus situation, if the new technology is not accepted by the organizational participants, these systems can create more waste than before. Even otherwise, potential for waste exists; in the U.S., for example, it was predicted that the use of computers and word processors would reduce the use of paper, but these predictions have not come true (Zehr, 1985). Accountants who were supposed to be displaced by computerized accounting systems have been able to create, in many cases, more work for themselves and

Automation and computers 45 others by using these systems. Doctors order more tests than needed simply because the new system can process information and produce reports faster. These advanced technologies require more planning for their diffusion and use. Introduction of these technologies constitutes mostly process innovations. Process innovations, unlike product innovations, will affect the social organization and work patterns at the workplace. These innovations present more difficult managerial problems. Based on their survey of firms in India, Baumgartel and others (1984) conclude that there has been a deterioration in the organizational climate for experimentation, innovation and adoption of new technologies. Also, many of the engineers graduating from top institutions in the country either leave the country or pursue careers in other more lucrative fields. The interaction between such institutions and industries also is quite weak.6 All these add up to greater obstacles in the development and absorption of these technologies. A recent study shows that there is potential for automation in India in industries such as machine tools, automobiles, electric power, metallurgy, cement and textiles.7 The introduction of CAD/CAM (computer-aided manufacturing), the flexible manufacturing system and robotics in these industries would require first that the manufacturing process be stabilized. Quality, lead time and other manufacturing requirements should be carefully specified. Otherwise, these new technologies would simply be automating waste, which only gets produced faster. Many companies in the U.S. have found after the introduction of robots that by carefully analysing the basic operations, they could have avoided the use of robots in the first place. Companies before automating should take into account the large hidden costs like the time spent in training the users of the system. Changes in the skill mix must be anticipated. A flexible, multi-functional workforce is needed. Maintenance activities become more important as down time becomes costlier and a more serious problem with these systems. Kaplinsky (1985) has pointed out that in order to get the maximum gains from automation, full integration between the three spheres of manufacturing described earlier must take place, i.e., conversion to a systemofacture mode of production. Automation in any one of these spheres, for example in production control or design, is not sufficient. If automation is not properly planned and the needs of the integrated system are not anticipated, these isolated efforts will lead to islands of automation that cannot communicate with each other. These technologies, which have the potential of integrating all the aspects of manufacturing, would also

46  Ramachandran Natarajan require in their implementation a high degree of interaction and coordination between all the units and organizational participants, like designers and manufacturing personnel and white- and blue-collar workers. The distinction between line and staff workers will become blurred and a freer flow of communications will be needed. Managing these changes is the key to successful implementation. These advanced technologies are by no means unmixed blessings and do have adverse side effects. They can degrade jobs – skilled machinists, for example, will find that the creative component has been taken out of their jobs as they become more machine attendants than machine operators of numerically controlled machines. Computers provide the supervisory staff with a greater amount of information, which can be used to pace and control the workers’ activities. Remote monitoring becomes possible, and jobs like those of telephone operators, reservations clerks, etc., could become more stressful as very precise up to the minute information on how the workers’ time was spent becomes available. In fact, availability of such information could act as a barrier to the introduction of computer-based technologies. In India, most of the government departments, which are the targets for computerization, compile and process a lot of data. This data currently is not easily available even to researchers, leave alone the general public, even though all these data are supposed to be public information.8 Thus, the computer can be a democracy-enhancing device making easy access of data possible, but then this might erode the power of the bureaucracy that presently controls the access to such information. In such a set-up, introducing computers will only lead to the sabotage of the system through overt and covert resistance. These technologies can give the management greater control over the workers, introduce greater rigidity and reinforce hierarchical relationships. In the U.S., for example, in many companies numerically controlled machines can be programmed only by white-collar managerial staff, which means less flexibility for reacting to production bottlenecks on the shop floor by the operators. Thus, a great deal depends upon organizational factors. A militaristic, authoritarian organization cannot get the best out of these systems, which essentially make accurate and timely information available inexpensively. The design and the operation of the organizational channels of communication for putting the information to use is largely a matter of the culture and the ethos of the organization. Working with computerized systems can lead to deskilling of the worker – for example, airline pilots have been found to lose their skills after a certain length of time as they work increasingly with dumb and

Automation and computers 47 dutiful automated systems. After working with these systems over an extended period, there is a growing tendency to put excessive reliance on the results produced by the computers and to abdicate the routine questioning and verification of the results.9 The outputs of these systems are very much affected by the reliability of the software. Generally, the more complex the software, the less reliable it is likely to be. The errors could be in programming or they could arise in the operation, such as accidental erasing or damages to computer memory due to voltage fluctuations.10 These latter types of operational errors are more likely in environments such as factories and aircraft. It is possible to make the software fault-tolerant to programming and design errors and resistant to physical damage, but it greatly adds to the complexity and costs. However, perfect reliability is unattainable, and since the impact of failures cannot be known a priori, the software must be verified for internal consistency and tested using simulation as well as in actual working conditions. In the case of important applications such as control of nuclear power plants and real-time traffic control in airlines and railways, regulation of and testing for software reliability becomes absolutely important. The VDTs (video display terminals) that have become a standard fixture in high-tech work stations in Western countries can cause health and safety hazards. As the use of VDTs increases, the worries about eyestrain and low-level radiation which can cause miscarriages and birth defects have also increased. Many unions are making efforts to regulate the design and use of VDTs in the workplace. More research is being undertaken on the health risks posed by VDTs. The workers and management should become aware of these risks. Such findings should be consulted before large-scale introduction of VDTs takes place in India. The real risk is that the pressures for rapid computerization will keep the public health and safety issues out of the realm of informed public debate where it properly belongs. There is also the danger that in the headlong rush for computerization through imports, India could become the dumping ground for untested and unsafe products (software and VDTs) which would not be approved for domestic use in advanced nations. It is imperative that regulatory mechanisms be set up to monitor imports from this standpoint.

2.4 Computers and progress The enlightenment conception of progress consisted in using science and the knowledge it generated for human emancipation from

48  Ramachandran Natarajan authoritarian political oppression and for improving human conditions and the general quality of life in the economic, political and social spheres of life. In this world view, science and techniques were considered as a means to achieve social ends. This vision gave way later, with the onset of industrial capitalism and the Industrial Revolution, to a new vision of progress according to which the development of science and technology and its deployment in industry for profit became ends in themselves.11 The new technocratic vision of progress was embraced, furthered and promoted by the commercial interests of those times. The adherents of the older view, unimpressed with the pecuniary raison d’être of the new view, thought it to be too materialistic and narrow. Thoreau (2018), for example, described new inventions as ‘improved means to an unimproved end.’ Nathaniel Hawthorne (1937) satirized technical progress in ‘Celestial Railroad’ in which the hero realizes that he is being taken by technical progress to hell instead of heaven. One should not confuse these responses to industrialization with the anti-machinery stance of the Luddites. These critics were only venting their concern that mere pursuits of techniques were being considered as ends in and of themselves. Of course, at that time these criticisms and sceptical views were received with ridicule and were ignored as exercises in romanticism and nostalgia harking back to static pastoral days. Later on, this emphasis on efficiency was to become the underlying principle of Taylor’s scientific management theories and found concrete applications through industrial engineering techniques in the assembly lines of mass production systems. After the Second World War, when the era of Big Science and Technology was ushered in, technocratic values of rationality and productivity were reinforced in organizational settings – in government and university laboratories. Enterprises began to develop elaborate techno-structures for the purposes of developing and harnessing technological innovations. In recent times, however, Three Mile Island, Bhopal and Chernobyl have alerted us to the Faustian nature of the bargain we strike when we use technologies. Doubts are being raised about the purpose of the technological enterprises in weapons development. It is being recognized that even innocuous devices like videos which entertain us can lead to a ‘sensate’ culture where images and symbols are used for psychic manipulation, fuelling escapist urges and benumbing the intellect. This trend should be viewed as a healthy development, because it helps restore the values of the original enlightenment view of technology as a means for serving larger ends.

Automation and computers 49 In the development and deployment of technologies, there is always a price to be paid. It is as if humans are condemned to suffer like Prometheus did for defying the gods in discovering fire. The moot question here is not whether technologies should be used, but who in the society pays the price and who stands to gain. This will of course be determined by the character of the political and social institutions in the society. There are many examples in the history of technology that amply illustrate this. In 16th-century England, when mass production in weaving was made possible, the guilds who were threatened by it saw to it that it was outlawed by the king. In Japan, the nobility realized that guns which were introduced in Japan by the middle of the 15th century were accessible to one and all and were making armed conflicts more democratic; they subsequently took steps to make sure that guns were not manufactured or used (Perrin, 1980). What happens at a societal level is manifested at a micro level too. Noble (1984) has shown in his detailed case studies that the choice of technology in corporations involves more than just the economic rationale. Quite often it is the political issues, such as the control gained by management over labour by using certain technologies, that are the decisive factors. Thus, technology and its deployment are guided by social and political imperatives. A blinkered vision of technology as promoter of efficiency obscures this fact. As cybernetician Norbert Wiener put it, “in our fascination for the ‘know-how,’ the ‘know-what’ is ignored.” Wiener (1964) was also concerned about the disturbing motive behind this fascination – the desire to abdicate personal responsibility for critical and dangerous decisions by placing it on abstract machines (or faceless bureaucracies for that matter), the kind of desire that prompts one to absolve oneself of all culpability by just saying, ‘I was only obeying orders.’ The more complex and capable the automated system, the more intensely one must question our purposes with it, for any goal-seeking system will not seek the goals we desire unless we design it to serve that purpose. Whether it be a nation or a firm, questions about ultimate purposes, rather than how to achieve them, must be raised. After it is all over and done with, what is computerization and automation going to achieve? Greater or less social and economic inequality? Greater or less stress, safety and democracy at the workplace? Will everyone in the society have equal access to the use of computers or will it be restricted to the privileged few? What kind of institutions should we be changing or evolving in order to cope with the changes that this technology is going to bring about? These are the questions that should constitute the prolegomenon for the policy on

50  Ramachandran Natarajan large-scale computerization and automation. While marvelling at the capabilities of the computer, it is sobering to remember that the world of computers is created by humans, and it is a world which Matthew Arnold (Tinker and Lowry, 1940, pp. 174–175), reflecting upon the new age with unease in ‘Dover Beach,’ aptly described, for the world which seems to lie before us like a land of dreams, so various, so beautiful, so new, hath really neither joy, nor love, nor light, nor certitude, nor peace, nor help for pain.

References Ahmad, A. 1986. ‘Third World Automation: Pros and Cons’, Paper Presented at the TIMS/ORSA Meeting, Los Angeles, April. Baumgartel, H. J., Pathan, R. and Roy, B. 1984. ‘Changes in Organizational Climate and Management Education, 1968 to 1981: Some Warning Signals’, Economic and Political Weekly, 19(8): M15–M21. Bhalla, A. S. 1986. ‘Microelectronics for Small-Scale Production’, Economic and Political Weekly, 21(48): M115–M122. Botelho, A. J. J. 1987. ‘Brazil’s Independent Computer Strategy’, Technology Review, 90(4): 37–45. Ernst, D. 1985. ‘Automation and the Worldwide Restructuring of the Electronics Industry: Strategic Implications for Developing Countries’, World Development, 13(3): 333–352. Goldhar, J. D. and Jelinek, M. 1983. ‘Plan for Economies of Scope’, Harvard Business Review, November–December: 141–148. Irwin, D. A. 1994. ‘The Political Economy of Free Trade: Voting in the British General Election of 1906’, Journal of Law and Economics, 37(1): 75–108. Kaplinsky, R. 1985. ‘Electronics-Based Automation Technologies and the Onset of Systemofacture: Implications for Third World Industrialization’, World Development, 13(3): 423–439. Kumar, A. 1987. ‘Software Policy: Where Are We Headed?’ Economic and Political Weekly, 22(7): 290–294. Leontief, W. 1982. ‘The Distribution of Work and Income’, Scientific American, 247(3): 188–204. Marx, L. 1987. ‘Does Improved Technology Mean Progress’, Technology Review, (January): 33–42. Noble, D. F. 1984. Forces of Production-A Social History of Industrial Automation, New York: Alfred A. Knopf. Perrin, N. 1980. Giving Up the Gun, New York: David Garvine. Petroski, H. 1985. To Engineer Is Human-the Role of Failure in Successful Design, New York: St. Martin’s Press. Piore, M. J. and Sabel, C. F. 1984. Second Industrial Divide: Possibility for Prosperity, New York: Basic Books.

Automation and computers 51 Reserve Bank of India. 1985. Foreign Collaboration in Indian Industry: Fourth Survey Report, Mumbai: Reserve Bank of India. Sabel, C. F., Herrigel, G., Kazis, R. and Deeg, R. 1987. ‘How to Keep Mature Industries Innovative’, Technology Review, April: 27–35. Tinker, C. B. and Lowry, H. F. 1940. ‘The Poetry of Matthew Arnold: A Commentary’, New York: Oxford University Press, pp. 174–175. Vyasulu, V., Jauhari, A., Rangarajan, S., Pant, S. and Bagga, S. 1986. ‘Destruction of Indian Research and Development-Case of Liquid Crystal Display Technology’, Economic and Political Weekly, 21(44–45): 1935–1936. Westphal, L. E. 1987. ‘Industrial Development in East Asia’s “Gang of Four” ’, Issues in Science and Technology, 3(3): 78–88. Wiener, N. 1964. God and Golem Inc: A Comment on Certain Points Where Cybernetics Impinges Upon Religion, Cambridge, MA: MIT Press. Yoder, S. K. 1985. ‘Thinking the Unthinkable’, Wall Street Journal, Special Report on Technology in the Workplace, September 16, p. 74. Zehr, L. 1985. ‘The Paper Palace’, Wall Street Journal, Special Report on Technology in the Workplace, September 16, p. 40.

Addendum Automation and computers: Hasten slowly

It is gratifying to know that the editors of this book have considered my article of 1987 to be worthy of inclusion because its insights and message have remained relevant. I thank them for that. As I read my article after so many years, I find that some of the issues I have raised still retain their significance. Much has happened in the last three decades with the inexorable progress made in information, communication and microelectronic technologies and systems. They are having a transformational impact beyond manufacturing, which was the focus of that article. With that as the context, in this addendum, I will revisit those issues and provide perspectives and interpretations from the vantage point of the present. First, I want to focus on certain motifs in the original article that have not changed much. For instance, if you read Prime Minister Narendra Modi’s speeches and comments during his recent visit to Silicon Valley where he met technology executives, they evoke a sense of déjà vu with Rajiv Gandhi’s speeches three decades ago (Goel, 2015). Plus ça change, plus c’est la même chose! If it was the computer that fascinated the late Rajiv Gandhi, for Narendra Modi it has been Facebook and Twitter, the social media offspring of the internet. Both share a faith in the power of technology to lift millions of people out of poverty. Would that faith translate into achievements? The observations that follow address that vital question. The trend towards integration of manufacturing activities driven by information and communication technologies has actually intensified in both scale and scope. Because of connectivity enabled by the internet, integration of all business activities within the enterprise and in the supply chain in manufacturing, as well as in services, is now possible. Manufacturing is being transformed by use of new materials such as composites and carbon fibre. Digitization of manufacturing has launched a third

Automation and computers 53 Industrial Revolution by creating a new method of manufacturing, i.e., additive manufacturing, also known as 3-D printing (The Economist, 2012b). Against this backdrop, Prime Minister Modi has been promoting the vision of “Make-in-India,” with the aim of making manufacturing an engine of growth and jobs. This is reminiscent of the exhortations of India’s first prime minister, Jawaharlal Nehru, in the 1950s, for rapid industrialization of India. For Nehru, factories were the new temples. Back then it was actually sound policy for economic growth, for the path to development prescribed by the economic models of the day was to move surplus labour from “farms to factories.” Surplus labour would be absorbed into the more productive and expanding manufacturing sector, which would become the engine for growth and jobs. This has worked well in the case of Japan, Taiwan and South Korea, but in India manufacturing has not been a major factor in terms of output or jobs. Manufacturing’s share in GDP grew only to about 15% in 2011 from about 9% in 1950, while its share of services in GDP doubled from 30% to 60%. In the case of East Asian Tiger economies, the share at which manufacturing peaked was at about a third of the output, but in India it reached its peak of 17% of GDP at the GDP per capita of $3,300 (adjusted for purchasing power parity) (The Economist, 2014). For South Korea and Indonesia, it was at GDP per capita of $10,000 and $6,000 respectively. In fact, the same phenomenon, labelled as premature deindustrialization (Dasgupta and Singh, 2006); (Dani Rodrik, 2015) or non-industrialization (Amirapu and Arvind Subramanian, 2015), has also been observed in other emerging economies such as Nigeria and South Africa, where manufacturing’s share of output and employment is peaking at lower and lower per capita income levels (Zhong, 2015). The number of jobs in manufacturing in India increased from 37 million to 53 million during 1993–2013 at an average rate of 1.8%, while the jobs in the service sector increased from about 80 million to about 150 million at the average rate of about 6.5%. Indian manufacturing sector’s export performance has been quite anaemic with its share of global merchandise exports increasing from 0.5% in 1993 to 1.7% in 2013 while during the same period China’s share went up from 2.5% to 11.5%. The reasons for this lacklustre performance of India’s manufacturing sector are varied, ranging from poor infrastructure, to acquisition of land for industrial development, to prevailing labour laws. These issues are being mentioned in passing here not because they are not important – in fact they are critical – but because they are not the main focus of this article. Those issues are getting the attention they deserve in other academic and policy forums. I will adhere

54  Ramachandran Natarajan to the theme of the original article and pose the question of whether automation and digital technology can help turn this around for India and realize the vision of Mr. Modi. The brief answer is, not likely. And, to understand why, we have to turn our attention to the two major developments since the original article was written. One is technological, for instance, the internet and the digitization of manufacturing, and the other is economic and political, i.e., globalization. They have changed the rules of the game of economic development. The speed with which these changes have occurred has resulted in the following. Developed countries have been able to access, through the platform provided by the internet, skilled and low-cost labour in developing countries. Production value chains have split apart with labour-intensive, low-value-adding production moving to low-wage locations. China has been the major beneficiary of this migration of labour-intensive manufacturing. Since the 1990s, it has been able to build complete supply chains, improve manufacturing productivity and move up to higher value-adding production. Helped by a benign export environment when global trade was growing much faster than global output, China, by the sheer scale and size of its manufacturing sector, has erected a considerable barrier for other countries. But China may be one of the last major countries to become a middle-income country with manufacturing – and the exports it enabled – driving its growth. However, India with wage levels even lower than that of China has not benefited to the same extent from the globalization of manufacturing. Indeed, manufacturing in India presents a paradox, despite labour being very cheap (relative to international standards) and abundant, Indian manufacturing is actually capital intensive (Natarajan, 2008). With the falling cost of technologies such as robotics, there is an incentive for Indian manufacturers to introduce automation, and many are actually doing so. Technology and automation can be labour displacing or labour augmenting. Employing labour-displacing technologies in manufacturing can improve labour productivity at the expense of jobs. This by itself is not a bad thing, if that sector is expanding. But recent evidence suggests that the potential for doing so is getting diminished as manufacturing in India is losing out to imports from China (Zhong, 2015). The labour augmenting this kind of automation creates demand mostly for skilled labour. This can help Indian manufacturers compete in the world market if they follow the model of German Mittelstand firms as producers of niche, customized technology and skill-intensive products (The Economist, August 2012). However, the near term outlook for increasing exports via this route

Automation and computers 55 does not appear promising because of the slowdown in global trade (Zhong, 2015). Foreign direct investment (FDI) in India is also contributing to automation-based manufacturing. Foxconn, Ford and GE are planning to expand operations in India (Zhong, 2015). Compared to the 1980s, India’s economy is in a different place – it is richer on a GDP per capita basis, and the capacity of its organizations to absorb and adapt to new technologies has greatly increased. Concomitantly, its ability to attract those technologies in the form of foreign direct investments and R&D centres of multinationals has also increased. But the impact on jobs will be minimal as these activities generate jobs only for the highly skilled. On the services side, India has greatly benefited by advances in information and communications technologies (ICT) through outsourcing and offshoring of information processing activities from developed countries. For a while, the international division of labour in manufacturing and services was based on the logic, “if you want cheap hands go to China and if you are looking for cheap brains go to India.” This trend has been a major contributor to the growth of jobs, exports in the form of IT services and the development of a world-class IT and business process outsourcing (BPO) industry in India. However, that well is drying up. The Indian IT services industry has matured and the low-wage advantage is disappearing. Competition has also increased as countries such as the Philippines have built call centres. Companies in the West have already outsourced back office work that are considered routine and have pulled back, especially after the great recession of 2008–2010. The more complex and higher value-adding work is being performed in home countries. Therefore, it is going to take a different kind of firm to sustain the growth of the IT sector. The growth has to come from e-commerce and m-commerce firms such as Flipkart and technology start-ups. Clearly, there is great potential for start-ups to leverage the internet and other technology platforms. Also, such internet firms can grow very rapidly as demonstrated by Alibaba in China and Google in the U.S. But that potential is yet to be realized, because the new internet-based firms in India are still small and few in number. Therefore, these firms are not generating many jobs. Government does have a role in promoting their growth by removing barriers relating to the payment system, reforming the telecom sector and in general making it easier to start and run a new business. India was ranked 142 out of the 189 countries on ease of doing business by the World Bank, and later its rank was revised to 130 based on new methodology.12

56  Ramachandran Natarajan The above assessments of technology-enabled growth in manufacturing and the IT sector lead to rather bleak prognostications about their contributions to the economy. That being said, there are ways in which the new technologies can make a positive impact on the Indian economy. It is through improvement of productivity economy-wide by applying technology to solve problems faced by ordinary citizens. Creation of the digital Aadhaar ID card, considered the mother of all projects with more than 720 million issued by 2014 and the adoption of IT by banks to enable financial inclusion with more than 120 million bank accounts opened by 2014, are great examples of the application of ICT to improve efficiency on a large scale (World Bank, 2015). Healthcare and education are already being transformed through m-health and online learning technologies. But there is much more that can be done. There are still many low-hanging fruits such as e-government, where ICTs can be used to improve delivery of public services. Closing the digital divide in the country and providing connectivity and internet access country-wide at higher bandwidth will decrease search and transaction costs and in the long run increase productivity. It has been estimated that the mobile phone has contributed as much as 1% to the GDP of some African countries. Technologies such as smart phones, through their ability to collect, process and store vast amounts of data (big data) now allow the application of the basic principle that information – whose acquisition, storage and communication costs have declined dramatically – can substitute for physical resources and minimize the movement of goods and funds. Amazon was one of the first firms to turn this principle into a business model by creating a virtual inventory of books. Ownership of resources becomes less important than accurate information about and access to those resources. It underlies the growth of the sharing economy – exemplified by start-ups such as Uber and Airbnb – in which demand and supply can be more accurately matched and spare capacity in the economy can be put to use. Sharing also applies to sharing of ideas. Because of global connectivity and powerful tools available at low costs, collaborations for innovations and co-creation of products and services is possible. However, as noted in the original article, the effective application of these tools is largely a matter of organizational practices and culture. In the digital world economy, innovation has been democratized and easy access to information is empowering people. Control over the means of production was the preoccupation of Karl Marx in the 19th century. Now, technology platforms such as YouTube and crowdfunding tools are putting the means of production within the reach of

Automation and computers 57 entrepreneurs. They can start a business, develop and market a new product with ease. The blockchain digital technology that underlies bitcoin can actually create and assure trust between strangers in a financial transaction. Throughout history, creating trust improved the efficiency of economic transactions between strangers and institutions, for creating that trust was crucial to economic development (Seabright, 2004). A caveat applies, though, for only those with human capital in the form of education and skills and/or financial capital can take advantage of those opportunities. The implication for India is that its government still has an important role in enabling the rapid build-up of that human capital through the educational system. This is a huge challenge for the Indian government. There are dark sides to the digital and connected world such as threats to individual privacy and cyber security. But foremost is economic – the labour-displacing aspect of these new technologies has only intensified the trends of technological unemployment mentioned in the original article. They have already disrupted and will continue to disrupt the labour markets in a serious way. What was true of manufacturing jobs now applies to service jobs as well. A study by academics Frey and Osborne estimated that about 47% of the whitecollar jobs, including research and accountancy, are at a high risk of being automated (Frey et al., 2013). One does recognize that because jobs can be automated does not mean they in fact will be automated. Relative costs do enter the picture, for if labour is cheaper, then automation is not going to happen. But evidence points in the direction of falling costs of ICTs. In that context, the Faustian bargain I alluded to in the original article still applies. The gains in standard of living for the skilled and the investors comes at the expense of livelihoods of many. The new digital technologies are inherently skill-biased in their application and therefore are likely to exacerbate income and, in the long run, wealth inequalities. This can ultimately undermine economic growth due to lack of purchasing power in the economy. An alleged but unverified conversation between Henry Ford II and Walter Reuther, the president of United Autoworkers (UAW), drives home this point. On a tour of a modern car factory, Henry Ford asked jokingly, “Walter, how are you going to get these robots to pay the dues for UAW?” Reuther’s instant reply was, “Henry, how are you going to get them to buy your cars?” Technology experts Brynjolfsson and McAfee argue that economies will work through these dislocations – though it is likely to be a lengthy period of adjustment – and ultimately everyone will benefit because the new technologies are capable of delivering the benefits in

58  Ramachandran Natarajan an exponential fashion (McAfee and Brynjolfsson, 2014). They are echoing the views of John Maynard Keynes, who in a perceptive essay written in 1930 during the Depression noted, We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come – namely, technological unemployment. This means unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour. But this is only a temporary phase of maladjustment. All this means in the long run that mankind is solving its economic problem. (Keynes, 1963) I doubt if Keynes would hold the same views in light of what we know now about these technologies – that they substitute not only manual but also intellectual labour. After all, he is credited with the saying, “When the Facts Change, I Change My Mind. What Do You Do, Sir?”13 Technological changes of the last three decades have made longterm technological unemployment – whose trend had begun at the time of the original article – and the associated inequalities it creates a central problem that all governments and societies have to grapple with. And, there are no solutions in sight.

Notes 1 This opinion piece was published in Decision (Volume 14, Issue 4, 1987). The author chose to retain the article in its original form while presenting an addendum revisiting the issue from a present-day perspective. Chapters 3 and 4 feature responses to this chapter along with its contemporary reconsideration by two other authors. 2 Foreign Collaboration in Indian Industry: Fourth Survey Report by the Reserve Bank of India in 1985. 3 Examples of policies for rejuvenating mature industries are described by Sabel et al. (1987). 4 In 1981, Toyota motor company’s Kamigo plant using Just-In-Time production (but without any robots) in a plant with equipment of more than 15 years vintage had a production average of about nine engines per person per day – well above the productivity of any other known automated plant at that time. 5 See editorial in Economic and Political Weekly, Vol. 21, No. 29, July 19, 1986. 6 See the ‘Path of Deviation’ India Today, March 31, 1987, p. 80. 7 Reported in the paper by Ahmad (1986).

Automation and computers 59 8 Though the situation obtaining in India is more acute in this regard, democratic governments in developed countries are not immune from withholding information from the public. For example, in the U.S. under the Freedom of Information Act, one cannot get information the government compiles in its efforts to supervise and regulate financial institutions. 9 There is a story about a young designer in an aircraft company who created an igniter for a jet engine through the computer, but with one decimal point removed in a dimension. The computer instructions resulted in a part that was 10 times too big. The machine operator who noticed something unusual brought the part to the designer. The designer, however, did not see anything wrong. Petroski (1985) has described, in the context of computer-aided design applications, the real dangers of such oversights. 10 Potential for such damage underscores the importance of high reliability and quality required of the infrastructure itself, e.g., climate control, dirt-free environment and stabilized power supplies. These aspects of the infrastructure are hard to come by in India. 11 Marx (1987) has contrasted these two conceptions of progress. 12 www.doingbusiness.org/data/exploreeconomies/india (Last Accessed 26 September 2017). 13 http://quoteinvestigator.com/2011/07/22/keynes-change-mind/ (Last Acces­ sed 26 September 2017).

References Amirapu, A. and Subramanian, A. 2015. ‘Manufacturing or Services? An Indian Illustration of Development Dilemma’, Working Paper No: 409, www.cgdev.org/publication/manufacturing-or-services-indian-illustrationdevelopment-dilemma-working-paper-409 (accessed on 26 September 2017). Dani, R. 2015. ‘Premature Deindustrialization’, NBER Working Paper No: 20935, www.nber.org/papers/w20935.pdf (accessed on 26 September 2017). Dasgupta, S. and Singh, A. 2006. ‘Manufacturing, Services and Premature Deindustrialization in Developing Countries: A Kaldorian Analysis’, UNUWIDER, United Nations University Research Paper, No: 2006/49. The Economist. 2012. ‘The Masala Mittelstand’, August 11, www.economist. com/node/21560263 (accessed on 26 September 2017). The Economist. 2012b. ‘Special Report: Manufacturing and Innovation’, April 21. The Economist. 2014. ‘Special Report: The World Economy’, October 4. Frey, Carl B. and Osborne, M. A. 2013. ‘The Future of Employment: How Susceptible Are Jobs to Computerisation?’ www.oxfordmartin.ox.ac.uk/ downloads/academic/The_Future_of_Employment.pdf (accessed on 26 September 2017). Goel, V. 2015. ‘Narendra Modi, Indian Premier, Courts Silicon Valley to Try to Ease Nation’s Poverty’, New York Times, www.nytimes.com/2015/09/28/ technology/narendra-modi-prime-minister-of-india-visits-silicon-valley. html?_r=0 (accessed on 26 September 2017).

60  Ramachandran Natarajan Hawthorne, N. 1937. ‘The Complete Novels and Selected Tales of Nathaniel Hawthorne’, in Pearson N. H. (ed.). New York: The Modern Library, pp. 1070–1082. Keynes, J. M. 1963. ‘Economic Possibilities for Our Grandchildren (1930)’, Essays in Persuasion, New York: W.W. Norton & Co, pp. 358–373. McAfee, A. and Brynjolfsson, E. 2014. The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies, 1st edition, New York: W.W. Norton and Company. Natarajan, R. 2008. ‘India’s Manufacturing Sector: Sources of Competitiveness, Constraints, and Prospects’, Academy of Taiwan Business Management Review, 4(1): 118–131. Seabright, P. 2004. In the Company of Strangers: A Natural History of Economic Life, Princeton, NJ: Princeton University Press. Thoreau, H. D. 2018. Walden, Scotts Valley: CreateSpace Independent Publishing Platform, October 25, p. 30. World Bank. 2015. Doing Business 2015 Going Beyond Efficiency, Washington, DC, https://openknowledge.worldbank.org/bitstream/handle/10986/ 20483/DB15-Full-Report.pdf?sequence=1 (accessed on 26 September 2017). Zhong, R. 2015. ‘WSJ 2050 Manufacturing Bust: For Poor Countries, WellWorn Path to Development Turns Rocky’, Wall Street Journal, www.wsj. com/articles/for-poor-countries-well-worn-path-to-development-turnsrocky-1448374298?tesla=y (accessed on 26 September 2017).

3 Information and communication technologies in India Outweighing negatives in development P. Vigneswara Ilavarasan It is a privilege to write a rejoinder to Prof. Natarajan’s 1987 commentary on implications of information and communication technologies (ICTs) for India. He is sceptical that ICTs are, or would be, helping India much, highlighting how ICTs in manufacturing might lead to unemployment and ICT-led manufacturing might not end in an increase in exports. The extant statistics on the slow growth of manufacturing and stories of middle-level managers in a top ICT firm being replaced by automation technologies1 strengthen his concerns. I contend that ICTs do bring in positive changes on multiple parts of the Indian economy and society in the light of extant evidence which I believe broadens the view of the impact. The main objective of this piece is not to belittle the works of critics, but to raise a plea to approach the area of ICT and development (ICTD) in India by considering a wide variety of evidence and views. I use the term ‘development’ in a broader sense so as not to exclude all potential implications of ICTs. I also argue that ICTs have brought in changes in India, but the benefits are not equally distributed. While covering the possible discourses of ICTD, Avgerou (2010) highlights the need for looking at the local variations. She calls these possible outcomes as disruptive transformation wherein ‘ICT does not necessarily result in development for all’ (p. 9) and the use of ICTs either results in uneven development or varies as per the local contexts. This view is not new but put forward as the social construction of technology (Pinch and Bijker, 1987). Technology evolves over a period with various stakeholders conditioning the entire process. For instance, it took 16 years for the bicycle to evolve from its more ‘macho’ or ‘sports’ form to the ‘safe bicycle’ which is the dominant transportation used by more than a billion people today (Komanoff, 2004). I suspect that we are looking at the impact of ICTs too early

62  P. Vigneswara Ilavarasan to be judged for its relevance and potential impact. The area of ICTs as a tool for development is also enlarging its scope, ranging from the software industry as a catalyst of growth in some developing countries (Schware, 1992) to ICTs as a means of international economic development (Heeks, 2009). Both practitioners and academics are grappling with the evolving field, questioning and raising the need for rigorous empirical research and theorizing (for instance, Qureshi, 2015). In this context, I am attempting to analyse ICTD in India. The impact of ICTs can be examined in two broad domains, production and consumption of ICTs. In the production space of ICTs, ICT employment, industry and hardware manufacturing are included. This will tell us whether employment opportunities are generated by the ICTs production and whether the manufacturing contributed to the GDP. In the consumption space, it considers how enterprises or organizations and government are using ICTs, including the impacts of this. The ICT industry, including business process outsourcing, generated total revenue of USD 143 billion in the financial year 2016, out of which exports totalled USD 108 billion. It claims to be the largest private sector employer with 3.7 million people and contributes to 9.3% of the GDP.2 The indirect employment is estimated at 10 million. This growth and contribution to the national economy are quite impressive when compared to the industry in 2008, with USD 8 billion in revenues and 0.34 million people working. The industry has a compound annual growth rate of 9.5% and is expected to touch USD 300 billion by 2020.3 While analysed independently, the contribution of the mobile economy is impressive, with direct employment of 2.2 million people and contributing about 6.1% to GDP in 2014. The industry also made a contribution of USD 14 billion to the Indian public sector (GSMA, 2015). The Indian ICT industry is predominantly a software exports story, with hardware not so successful. Despite liberalization, the Indian hardware sector has been declining due to lack of investment in R&D and preference for technology imports (Majumdar, 2010) and not being able to withstand the competition from China and Taiwan. Apart from high-skilled labour, other complementary assets including infrastructure and policy instruments are too weak to support and grow the industry. The growth of the software services exports sector is largely attributed to the presence of a large number of engineers and continuous efforts by the Indian government in sustaining the service-led industrialization mode. For instance, the establishment of Institutes of

ICT in India: outweighing negatives 63 Information Technologies and the new Indian Institute of Technologies4 to meet the demand of high-skilled labour is still aggressively pursued by the government. Using the data from the National Sample Survey Organisation’s (NSSO) data for the periods 1999–2000 and 2009–2010, Mehta (2012) showed that employment increased two-fold between these periods in the IT and telecom sectors. The skill level indicated by the educational qualifications of the ICT workers is significantly high when compared to other sectors in 2009 (Mehta, 2012). The average salary of the ICT worker is higher than in traditional sectors. The employment conditions are reported to be better in the ICT sector. When compared to the traditional sectors, the majority of the ICT workers in the formal sector are regular workers, and the number of casual labourers has been declining over the years. The sector continues to absorb the high-skilled graduates who would be otherwise unemployed. However, questions are being raised on who garners the benefits of ICT employment. The disaggregated data on the ICT employment is inadequate. Using NSSO data, Mehta (2012) showed that there were only 14% women workers in the IT industry in 2009–2010. Using a small sample of 114 programmers, Ilavarasan (2007) showed that the typical software worker in India is a young male; hails from an urban and a semi-urban locality; follows Hinduism, and belongs to the upper socio-economic stratum of Indian society. He holds an undergraduate engineering degree, not necessarily in computer science, from a second-grade educational institution. (p. 802) The trade press reports the women’s participation in ICT employment is in the range of 20%–40%.5 Data on the other disadvantaged groups – social categories or religious groups – are not available, but there are indications that participation is very low (Upadhya, 2007). This is not surprising, as the main source of supply of labour is engineering colleges or higher educational institutions where the enrolment of women and disadvantaged groups is low. The nature of engineering students’ community is being reflected in the ICT employment. It is premature to argue that the ICT industry discriminates against minorities, though recruitment practices like giving importance to English language skills might exclude the minorities who are traditionally weaker in the required skills (Upadhya, 2007).

64  P. Vigneswara Ilavarasan The ICT sector is centred on urban locations like Bangalore, Mumbai, Chennai, Hyderabad and others. The government has realized the urban bias in the development and has been making efforts to diffuse the ICT sector and its benefits to the tier II and III cities in India. This diffusion is yet to reach the desired levels, as inferred by the trade press.6 Due to their nascent industry ecosystem, the second-tier locations are not offering benefits of positive externalities to the firms (Hutchinson and Ilavarasan, 2008). Unlike labour in the export enclaves of conventional manufacturing industries, workers in the ICT service sector have opportunities to work in foreign locations. These short-term transnational migrations enable the programmers to diffuse throughout India the knowledge gained abroad. Ongoing tussles between the Indian government through the industry association and the US government for enabling easy movement of temporary skilled programmers under H1B visas impact such knowledge diffusion process.7 The knowledge diffusion and the subsequent technological upgrading is also made possible through the multinational corporations (MNCs) in the ICT production space in India. The number of MNCs is quite impressive. According to Zinnov (2015), 906 MNCs have a presence regarding R&D centres in India. It is expected that knowledge diffusion occurs because of linkages the MNCs share with the players in the national innovation system. However, it appears that knowledge diffusion is occurring through labour turnover rather than through inter-firm linkages or university collaborations (Ilavarasan, 2014). Lack of orientation towards industry research and poor signalling of research capabilities by the Indian universities, high-skill demand and supply in certain technological domains and control by the headquarters of MNCs are also limiting the nature of linkages. However, there is also some evidence of technological upgrading happening (Aoyama and Parthasarathy, 2012) because of MNCs and the rise of software product firms in the business to the business domain.8 Parthasarathy and Aoyama (2016) found that the MNCs work with the grassroots NGOs to develop ICT solutions for the community purely on non-commercial terms. Though similar initiatives are fewer in number, they indicate that MNCs are exploring the bottom of the pyramid as a possible potential market in coming days. This might result in the close integration of MNCs and other players like NGOs and domestic firms in the technological advancement process. Overall, the ICT production space regarding employment and firms appears to be beneficial to India. The benefits are being enjoyed by a

ICT in India: outweighing negatives 65 certain group of people but are likely to reach the rest of the population in the future. The consumption side of the ICTD offers more than the production side. It appears that ICTs are being used widely by business enterprises in India. Based on a survey of 500 manufacturing firms (median size of 70 employees) in India, Basant et al. (2006) showed that 98% of the sample had personal computers in 2003, 54% of non-production workers used a PC and only 15% of production workers did. ICT adoption is strongly related to size, ownership structure, share of administrative workers and education. The size of the firm in determining the usage and impact of ICTs is echoed by a study based on 560 Mumbai-based microenterprises (Ilavarasan and Levy, 2012) in which only 15% had access to computers and 90% had phones. The relationship between ICT use and productivity seems to be present, which infers benefits to the Indian economy. In Basant et al.’s study (2006), there is a strong relationship between ICT capital and productivity, after controlling for many intervening factors. However, the impact of ICTs on a firm’s productivity seems to be depressed by a power disruption. Using the large-scale combined public dataset, Erumban and Das (2016) also showed that ICT investment is improving total factor productivity in the ICT-using sectors as well as in the ICT-producing sectors like telecommunications, but to a relatively lower degree. As the firm size goes down, ICT impact appears to be declining. Chew et al. (2011) found that the impact of ICTs is limited to the extent of 28% in enterprises with fewer than 10 employees. The extent of ICT impact can be attributed to human capabilities and other reasons that are beyond individuals. Toyama (2015) argues that human capabilities are important to amplify the impact of ICTs on growth. This applies to enterprises as well. For instance, Chew et al. (2015) showed that entrepreneurial motivation is an important amplifier in the use of mobile phones by women micro-entrepreneurs, which in turn results in their business growth. Similar stories are emerging from larger enterprises where power supply suppresses the positive impact of ICTs (Basant et al., 2006). A study of micro-finance institutions (Singh and Padhi, 2015) showed that ICTs helped them to increase outreach and achieve cost reduction, but this was limited by the regulatory barriers related to disbursal of money and infrastructure inadequacies, especially road and power, in realizing the full potential. Apart from enterprises using ICTs for gains related to productivity or efficiency, government organizations are also exploring ICTs for public service delivery. The Digital India9 programme of the Government

66  P. Vigneswara Ilavarasan of India is centred on three main areas – Digital Infrastructure as a Utility to Every Citizen, Governance and Services on Demand and Digital Empowerment of Citizens. These are covered under nine pillars – providing broadband to all, making use of ICTs to create jobs and other livelihood opportunities for people, delivering services, electronics manufacturing and others. The conservative estimated cost of the programme is USD 18 billion. The other programmes that use ICTs to deliver services like National e-Governance Plan, National Optical Fibre Network of India or Bharat Broadband Network Limited, Aadhaar card, mygov.in and others are covered under the Digital India initiative. The unique identity card for citizens, Aadhaar, has enabled direct benefits transfer to poor people under various entitlement programmes, resulting in savings of USD 4.1 billion in 2015–201610 to the Government of India. Bhatnagar and Singh (2010) assessed the impact of eight e-governance projects by surveying 242 users. The study showed that there was a considerable reduction in the number of visits undertaken by the citizens to avail the services, resulting in a decrease in travel costs. The users also felt that the waiting time had decreased and there was an overall increase in service quality and a decrease in the use of intermediaries and in bribing of government officials. However, Dé (2009), using case studies of three e-governance projects, hints at the problems present in the e-governance projects. He argues that the design and implementation of e-government systems reflected the priorities of the castes who are dominant regarding social and economic statues. For instance, building an e-governance system for land records is irrelevant for the landless labourers, wherein the technology design appears to be favouring the ruling groups. The ambitious common service centres project of the Government of India, which provides many services like income and caste certificates from government institutions, are not able to generate adequate revenues (Prasad and Ray, 2012). The masses that are supposed to use the common service centres do not find the need for services offered by them. Questions are being raised about whether ICT investment is driven by technological determinism rather than evidence-driven policy initiatives. For instance, the potential success of Bharath Broadband Network Limited, the laying of the optical fibre to all the Gram Panchayats,11 is dependent on cooperation among multiple stakeholders such as private service providers, state governments and the central government. In the absence of cooperation or participation from

ICT in India: outweighing negatives 67 various stakeholders, this USD 4 billion project could become a dead asset (Srinivasan and Ilavarasan, 2015). However, the government is filling two kinds of gaps through these projects: a feasibility gap – private players ignoring the market due to poor profitability, and an affordability gap – potential customers are too poor to pay for the services which are in need. Replicating models from the developed world where adequate complementary assets exist, while expecting them to be successful in a country like India and to measure them using the same parameters, is problematic. Despite the infrastructure woes for the industries and weak human development regarding literacy and living conditions, the impact of ICTs is quite remarkable (also, see Walsham, 2010). The impact might not be equitable in this period, which I treat as an early stage of the technology maturity curve. The trickledown effect of these technologies, therefore, would also be conditioned along the way. ICTs and developmental impact in India is a domain that offers innumerable opportunities for future empirical and theoretical researchers. The extant literature also offers directions for future researchers. Heeks (2010) lists at least 11 different disciplines that could study development informatics. Andersson and Hatakka (2013) also provide 11 streams of research and related theoretical frameworks one could use. Walsham (2017) talks about at least eight different societal issues on which ICTs for development research is contributing. A quick glance of the literature infers that ICTD research in India is still inadequate. In the light of above discussion, one can look at three broad areas: society, industry and government. All these broad areas can be examined through any disciplinary or theoretical lens. For instance, Venkatesh et al. (2016) use two theories from different disciplines – social network theory and social epidemiology and an impressive seven years’ longitudinal data to study the e-health kiosks and their linkage with infant mortality control in rural India. Future researchers will not be able to settle the direction and intensity of the impact of the ICTs in India. However, their contributions will unravel the complexities of the relationship between development and ICTs, which are continuously influenced by the technological developments, heavy public investments and human behavioural adaptations. The policy relevance of the academic research is repeatedly pleaded for (for instance, Ilavarasan, 2017), which future researchers should consider seriously.

68  P. Vigneswara Ilavarasan

Notes 1 http://articles.economictimes.indiatimes.com/2015-01-20/news/ 58268038_1_software-engineers-mid-managers-tata-consultancy-services (Retrieved 15 May 2016). 2 www.nasscom.in/impact-indias-growth (Retrieved 05 May 2016). 3 www.ibef.org/industry/information-technology-india.aspx (Retrieved 12 May 2016). 4 www.ndtv.com/india-news/union-cabinet-gives-approval-to-6-new-iits1411106 (Retrieved 26 May 2016). 5 www.nasscom.in/hitech-women (Retrieved 20 May 2016). 6 www.firstpost.com/business/mncs-india-based-subsidiaries-eyeing-tier-iiiii-cities-growth-nasscom-2211090.html (Retrieved 20 May 2016). 7 For instance, http://yourstory.com/2015/09/ispix-report-software-productcompanies/ (Retrieved 20 May 2016). 8 http://yourstory.com/2015/09/ispix-report-software-product-companies/ (Retrieved 20 May 2016). 9 www.digitalindia.gov.in/content/vision-and-vision-areas (Retrieved 22 May 2016). 10 www.thehindubusinessline.com/economy/govt-saves-over-rs-27000crore-through-dbt-and-aadhar/article8580346.ece (Retrieved 15 May 2016). 11 For more details, www.bbnl.nic.in/ (Retrieved 15 May 2016).

References Andersson, A. and Hatakka, M. 2013. ‘What Are We Doing? Theories Used in ICT4D Research’, 12th International Conference on Social Implications of Computers in Developing Countries, Hayes, N. and La Rovere, R. L. (eds.), University of the West Indies, Mona, pp. 282–300. Aoyama, B. and Parthasarathy, Y. 2012. ‘Research and Development Facilities of Multinational Enterprises in India’, Eurasian Geography and Economics, 53(6): 713–780. Avgerou, C. 2010. ‘Discourses on ICT and Development’, Information Technologies & International Development, 6(3): 1–18. Basant, R., Commander, S. J., Harrison, R. and Menezes-Filho, N. A. 2006. ‘ICT Adoption and Productivity in Developing Countries: New Firm Level Evidence from Brazil and India’, Discussion Paper Series. No IZA DP No. 2294. Institute for the Study of Labor, Bonn, Germany. Bhatnagar, S. C. and Singh, N. 2010. ‘Assessing the Impact of E-Government: A Study of Projects in India’, Information Technologies & International Development, 6(2): 109–127. Chew, H. E., Ilavarasan, P. V. and Levy, M. R. 2015. ‘The Amplification Effect of Mobile Phones on Female-Owned Microenterprises’, Mobile Media & Communication, 3(3): 317–334. Chew, H. E., Levy, M. R. and Ilavarasan, P. V. 2011. ‘The Limited Impact of ICTs on Microenterprise Growth: A Study of Businesses Owned by Women in Urban India’, Information Technologies and International Development, 7(4): 1–16.

ICT in India: outweighing negatives 69 Dé, R. 2009. ‘Caste Structures and E-Governance in a Developing Country’, Electronic Government: 8th International Conference, EGOV 2009, Linz, Austria, August 31–September 3, Proceedings, Springer, Berlin Heidelberg, pp. 40–53. Erumban, A. A. and Das, D. K. 2016. ‘Information and Communication Technology and Economic Growth in India’, Telecommunications Policy, 40(5): 5412–5431. GSMA. 2015. ‘The Mobile Economy. India 2015’, http://gsmamobileeconomy. com/india-new/ (accessed on 10 January 2016). Heeks, R. 2009. The ICT4D 2.0 Manifesto: Where Next for ICTs and International Development? University of Manchester, Institute for Development Policy and Management (IDPM), Development Informatics Group, Manchester. Heeks, R. 2010. ‘Do Information and Communication Technologies (ICTs) Contribute to Development?’ Journal of International Development, 22(5): 625–640. Hutchinson, F. and Ilavarasan, P. V. 2008. ‘The IT/ITES Sector and Economic Policy at the Sub-National Level in India’, Economic and Political Weekly, 43(46): 64–70. Ilavarasan, P. V. 2007. ‘Is Indian Software Workforce a Case of Uneven and Combined Development?’ Equal Opportunities International, 26(8): 802–822. Ilavarasan, P. V. 2014. ‘R&D Centers of ICT Multinationals in India: Executing Arms or Equal Partners?’ Economic and Political Weekly, 49(34): 56–63. Ilavarasan, P. V. 2017. ‘Bridging ICTD Research and Policy-Making: Notes from a Systematic Review on MSMEs in the Low-and Middle-Income Countries’, Information Technology for Development, 23(4): 723–733. Ilavarasan, P. V. and Levy, M. R. 2012. ‘ICT Access and Use by Microentrepreneurs in Mumbai, India: A Value Chain Model Analysis’, Proceedings of the Fifth International Conference on Information and Communication Technologies and Development, March, ACM, New York, pp. 259–267. Komanoff, C. 2004. Bicycling: Encyclopedia of Energy, New York: Elsevier. Majumdar, R. 2010. ‘Indian Electronics Hardware Industry: Growth and Productivity (1993–2004)’, Economic and Political Weekly, 45(14): 72–77. Mehta, B. S. 2012. ‘Employment in the Information and Communication Technology Sector’, The Indian Journal of Labour Economics, 55(4): 687–696. Parthasarathy, B. and Aoyama, Y. 2016. ‘Beyond ICTs and Developmental Domains: The Historical Specificity of ICTD’, Proceedings of the Eighth International Conference on Information and Communication Technologies and Development, ACM, Ann Arbor, MI, p. 26. Pinch, T. J. and Bijker, W. E. 1987. ‘The Social Construction of Facts and Artefacts: Or How the Sociology of Science and the Sociology of Technology might Benefit Each Other’, Social Studies of Science, 14(3): 399–441. Prasad, R. and Ray, R. S. 2012. ‘Critique of the Common Service Centre Scheme’, Economic and Political Weekly, 47(6): 18–24.

70  P. Vigneswara Ilavarasan Qureshi, S. 2015. ‘Are We Making a Better World with Information and Communication Technology for Development (ICT4D) Research? Findings from the Field and Theory Building’, Information Technology for Development, 21(4): 511–522. Schware, R. 1992. ‘Software Industry Entry Strategies for Developing Countries: A “Walking on Two Legs” Proposition’, World Development, 20(2): 143–164. Singh, V. and Padhi, P. 2015. ‘Information and Communication Technology in Microfinance Sector: Case Study of Three Indian MFIs’, IIM Kozhikode Society & Management Review, 4(2): 106–123. Srinivasan, N. and Ilavarasan, P. V. 2015. ‘White Elephant or a Game Changer?’ Economic & Political Weekly, 50(42): 59. Toyama, K. 2015. Geek Heresy: Rescuing Social Change from the Cult of Technology, New York, Public Affairs. Venkatesh, V., Rai, A., Sykes, T. A. and Aljafari, R. 2016. ‘Combating Infant Mortality in Rural India: Evidence from a Field Study of eHealth Kiosk Implementations’, MIS Quarterly, 40(2): 353–380. Upadhya, C. 2007. ‘Employment, Exclusion and Merit in the Indian IT Industry’, Economic and Political Weekly, 42(20): 1863–1868. Walsham, G. 2010. ‘ICTs for the Broader Development of India: An Analysis of the Literature’, The Electronic Journal of Information Systems in Developing Countries, 41(4): 1–2. Walsham, G. 2017. ‘ICT4D Research: Reflections on History and Future Agenda’, Information Technology for Development, 23(1): 18–41. Zinnov. 2015. ‘The Indian Promise’, www.slideshare.net/zinnov/the-indianpromise (accessed on 10 May 2016).

4 Information and Communication Technology (ICT) in India A reality check Partha Ray

The editors of this book have asked me to have a relook at Ramachandran Natarajan’s article on “Automation and Computers” that was originally published in 1987 and reprinted in this anthology (Natarajan, forthcoming). In this day and age of short shelf-life publications and “throw away culture” (Toffler, 1970), such an initiative is heartening. It is also indicative of the analytical depth and practical insights that Natarajan’s 1987 paper seems to have offered. It is, thus, indeed a privilege to contribute an appreciation of Natarajan’s 1987 paper with the benefit of long hindsight, a luxury that is often not available to a commentator. Natarajan, in his original article, raised a number of conceptual issues on the spread and appropriateness of computers and automation in human society. Against this backdrop, in this short note, as a macroeconomist I will attempt to review the IT sector in the context of the Indian economy. For the sake of expository convenience, I focus my attention on three specific issues, viz., (a) the definition of this sector, (b) the contribution of this sector to the Indian economy and (c) policy regime behind the spread of this sector. Before I proceed further, two specific comments on this chapter are in order. First, in terms of methodology, this chapter is descriptive in nature. Second, the chapter offers some comments on some of the key macro issues from the existing literature. In that sense, a limitation of the chapter is the absence of a detailed probe into industry segments relating to IT and ITES.

4.1 Definition and composition of the IT sector Natarajan – true to the then prevailing zeitgeist – in his original article used the word ‘computers’. A computer is defined by the Oxford

72  Partha Ray English Dictionary as “An electronic device which is capable of receiving information (data) in a particular form and of performing a sequence of operations in accordance with a predetermined but variable set of procedural instructions (program) to produce a result in the form of information or signals”.1 While semantics may not matter for the kernel, in popular usage, these days the word ‘computer’ seems to have been replaced liberally by words like information technology (IT), IT-enabled services (ITES) and information and communication technology (ICT); interestingly, these words are often used synonymously and interchangeably in popular parlance.2 However, a key question remains as to what constitutes this sector (IT/ICT/ITES). There have been various efforts to develop definitions and classifications covering this sector. Illustratively, several OECD (Organisation for Economic Co-operation and Development) reports have examined the definition of ICT-enabled services, and the OECD’s 2010 Manual of Extended Balance of Payments Services classification has a specific component of “Telecommunications, computer and information services” (component 9); this together with “Other business services” (component 10) may constitute the best available proxy for ICT-enabled services (UNCTAD, 2015). Thus, instead of any ontological discussion, it may be useful to begin with an empirical classification scheme or typology. Sudan and others (2010), in a World Bank report, have gone into an operational definition of this sector. Their typology seems quite useful in making a distinction between IT and ITES. Even within this broad two-way classification, it is fairly apparent that each of these constituents has a number of varied and dissimilar sub-constituents. Illustratively, the sector has as diverse components as design and development of systems and animation (Table 4.1).3 Interestingly, the presence of heterogeneity in the definition of these services makes the estimation of this sector a statistician’s or national accountant’s nightmare. Illustratively, Sudan et al. (2010) commented: Estimating the market size for trade in IT services and ITES is difficult given definitional issues and the relative novelty of the field. Official statistics are often not available or not reliable, and calculations based on balance of payments and trade in services may not accurately isolate IT services and ITES. As a result, much of the data on the size of the current market comes from private surveys, consulting firms, and anecdotal evidence. (p. 2)

ICT in India: a reality check 73 Table 4.1 A typology of IT services and IT-enabled services (ITES) IT Services

IT-enabled services

Application services

Engineering services

Business process services

Application development and maintenance • Application development • Application development integration & testing • Application maintenance

Manufacturing engineering • Upstream product engineering – Concept design – Simulation – Design engineering

Horizontal processes • Customer interaction and support (including call centres) • Human resource management • Finance and administration • Supply chain (procurement logistics management)

System integration • Analysis • Design • Development • Integration and testing • Package implementation IT infrastructure services • Help desks • Desktop support • Data centre services • Mainframe support • Network operations Consulting • IT consulting • Network consulting

• Downstream product engineering – Computer-aided design, manufacture and engineering – Embedded software – Localization • Plant and process engineering Software product development • Product development • System testing • Porting/4variants • Localization • Maintenance and support • Gaming

Vertical processes • Banking • Insurance • Travel • Manufacturing • Telecommunications • Pharmaceuticals • Others Knowledge process outsourcing • Business and financial research • Animation • Data analytics • Legal process and patent research process

Source: Sudan and others (2010)

In view of the amorphous nature of the sector, two comments are in order. First, as in many occasions the data relating to this sector comes from the concerned industry associations/lobbyist groups, there is a built-in tendency of overestimation and the estimates tend to vary significantly; e.g., while according to Gartner Research (2008), the global market was expected to grow from $171 billion in 2008 to $239 billion in 2011, estimates by NASSCOM (National Association

74  Partha Ray Table 4.2 Falling costs of computing (US$) Costs of computing

1970

1999

2012

1 Mhz of processing power 1 megabit of storage 1 trillion bits sent

7,601 5,257 150,000

0.17 0.17 0.12