"India Has Ingenuity"
That's why Tata Consultancy Services's Faqir Chand Kohli says the country's "cost of doing innovative technology is very, very low"

Clearly visible through the windows of Faqir Chand Kohli's office in Nariman Point, Bombay's financial district, is the graceful sweep of the city's bay and beyond that, the bewildering number of high rises that are rapidly changing the colonial city's skyline. Kohli has occupied the corner office for 30 years as chairman of Tata Consultancy Services, Asia's largest software services outfit. Led by Kohli, the concern pioneered India's phenomenal rise as a power in software outsourcing.

Kohli is in that office even now, four years after he retired. That's because his job as India's pioneering software professional is not over. These days, the solemn, 80-year-old Kohli has a singular obsession: Using his technical expertise to help develop India. Kohli is worried about the Indians who don't have the benefit of education -- especially the country's roughly 250 million illiterate adults. Since retiring, he has helped developed an innovative computer-based functional literacy program for adults.

Kohli spoke with BusinessWeek Correspondent Manjeet Kripalani about the literacy project, Tata, and innovation in India. Following are edited excerpts from their conversation:

Q: How deep is the digital divide in India?
A: I don't think there's really a divide. The question is: Are you using technology for everybody? China has six times the number of computers that India has and has written lots more software in Mandarin and Cantonese for their own people, whereas we have done it for others. China has used computers effectively in manufacturing, in agriculture. This year, China will install 13 million PCs, of which 8 or 9 million they will make themselves. We have just 3 million PCs.

It's not that we're not doing well, but we're not doing enough. We have to have a domestic digital industry and speed up PC use. It's doable to make a sub-$200 PC, but it needs a huge initiative. We need more microelectronic engineers who understand the hardware. They will build embedded software, functionality in devices. You can't build up an industry with just 250 to 300 microelectronic engineers a year.

We have requested the government to select 40 more colleges to provide a master's program in microelectronics. The Indian Institute of Technology in Bombay, which is graduating 60 master's degrees in microelectronics, will provide the coursework, mentoring, and monitoring of the programs.

Hopefully, in the next 12-18 months, we will break the back of the PC problem and have software in all Indian languages. Then the fun starts, when everyone will use it. I don't think it's the vested interests who are preventing this, it's just inertia.

Q: Can India be a source of deep, real innovation?
A: Big companies are geared up for incremental innovation. For us in India, the cost of doing innovative technology is very, very low. The capability of India is its people. We can assemble more good and intelligent people than anywhere in the world. I admire China, but our people are better. India has ingenuity. If an ordinary car mechanic is aided by computers and simulation, his productivity leaps.

Q: Tell me about your computer-aided adult-literacy program. What made you pursue it?
A: [For years,] the Indian government has been spending a lot of money and resources on adult literacy. It has been using conventional methods. While there has been some progress, it's inadequate, considering that about 250 million adults in India are still illiterate. There are constraints: You need 200 hours of instruction for full literacy, and you need trained teachers to teach. If I'm 25 and working in a field or as a housewife, how will I find those 200 hours? As for teachers, we need 500,000 trained teachers to come to 500,000 villages. Where will they come from?

So I started thinking: How can we learn, recognize images, retain, recall. I found that we usually look at images and icons -- pictures, faces, and words are all icons -- and relate it to a sound pattern. Then it sticks. Maybe someone in the world has tried this out, but not in this manner. The key was, when done with the program, the person should be able to read a newspaper in their own language.

It needed a vocabulary of 400-600 words. So, starting in early 2000, three or four of us -- three TCS engineers and a linguist -- prepared a vocabulary of 500 words. And we prepared the lessons in a month or so.

Then we experimented, and the first lesson was in a village called Medak, outside Hyderabad. We upgraded the keyboard in Telegu [the local language]. And we got 20 volunteers for lessons, thrice a week for 1.5 hours each. After 8-to-10 weeks, people started reading the newspaper. Our major experiment was in Guntur, again in the same state. We had the same results.

We have experimented in Hindi, Tamil, Marathi, and Bengali with the same results. Our experiment was complete. We've told the government to take over. We've shown what we can do with a sampling of 50,000 people in five languages.

We have a social message: We want people to not just read the newspaper, but read their land records, the political manifestos -- not just hear speeches during election time. People are reading their children's books now.

Q: Tell me about the birth of Tata Consultancy Services.
A: I used to be with Tata Power [one of India's largest private power utilities]. I'm an electrical engineer, I did physics and math at Punjab University, then [obtained] a masters in electrical engineering from MIT. The Tata group did realize the computer was a new technology. On Apr. 1, 1968, TCS was set up to provide computer services.

Earlier, I had been using computers for Tata Power. We at Tata Power were developing the design for a power system and the transmission of energy, etc. We had a digital computer to control the entire power grid, including hydro, thermal, and nuclear energy. That's why you don't get any power blackouts or shutdowns in Bombay city, which is powered by us.

Then I was drafted to TCS for a year to build it. We didn't have any outsourced work then. For years, we did work only in India, helping local banks get [computerized] interbranch reconciliations. And we computerized the telephone directory of Bombay in 1972.

For our business to be successful, we needed bright people -- plentiful in India. And we needed to learn about technology. But technology was only available in the West so we had to go there. In those days, I had became the director of Institute of Electrical Engineers and Electronic Engineers in New York, and it took me to New York three or four times a year.

I used the time in those two years to build up contacts in the U.S. One was with the Burroughs Computers, the No. 2 computer company in the U.S. then. They bought our services for their B1700 new series of computers -- they wanted us to develop for them a health-care system to sell to their clients along with the computer. But we had a formidable challenge: We didn't have a Burroughs machine in India.

So we wrote the whole software for that on an International Computers machine, with an automatic filter which would filter the ICL-written software for the Burroughs machine. That filter was of a very high order of software engineering. Burroughs used that filter next year to replace the ICL machines for their U.K. clients with Burroughs machines. Then TCS was in business. Each time Burroughs changed to their computers, they used us.

The fight in the first 10 years was not with foreign competitors but with the government. The government and others had a negative mindset about computers. We had high tariffs and tough unions. It took us three years to get [the approval to import] a large Burroughs computer for New Dehli. By the time we got permission for it, the computer we asked for was already obsolete. But finally the government appreciated the need for the latest technology, and we got the next-generation computer.

Q: What inspires you? Who inspired you?
A: I'm inspired by our people. I like to encourage people. My father was a businessman, had a department store in Peshawar. My mother studied till the 8th grade and read the newspaper every day till she died at 75. I always admired her for it. We moved to Lucknow after the partition of India and Pakistan. My eldest brother didn't go to college because he had to run the business, but he was self-taught. He loved Dickens and autobiographies -- which I read, too. And he encouraged me.

Q: If you look out into the future, what do you see for India?
A: We have the best human capital. We have more than our fair share of intelligent, hard-working people, great raw material and assets. We have to learn how to use it.

Q: What's next on your agenda?
A: We're now experimenting with the public school system, creating teacher aids, and computerizing the extra coaching classes that all teachers here give. Students will pay money for the coaching program and see the teacher once a week to complete it. And from 8th grade on, everyone must get some vocational training -- it's not necessary for everyone to go to college. There are solutions [for everything], but we have to work on them.