Reema Gupta: Let us begin the conversation with NIIT’s journey over the last four decades. Could you please tell us about its beginnings?
Rajendra Pawar: In 1981, we formed NIIT with a simple mission of bringing people and computers together. That was the need of the moment. We created two divisions. One of our ventures was in the education sector, imparting computer skills to students and young professionals. The other one was in the software industry. It catered to corporates like Indian Oil and the Oil and Natural Gas Corporation (ONGC) among others, helping them computerise their operations. Around the same time, the leaders of the top 100 companies in India also began seeing how their peers in other countries were harnessing computer technology and wanted to do the same. This gave an impetus to our growth, especially spurring our consulting practice.
During the 1980s and 1990s, NIIT became the biggest recruiter for MBAs for this practice. In 1985, out of the 19 MBA students who majored in systems from the Indian Institute of Management-Calcutta, we hired 18. These youngsters were expected to talk to the chairpersons of large enterprises and advise them on how to approach computerisation.
In the closed economy, with very few consulting organisations in the fray, NIIT had a great opportunity to grow. Information Systems (IS) planning was the big thing internationally. Our bright young MBAs were already doing IS planning in India.
It was only in 1991 with the opening of the economy and after 10 years of being fully focused on the domestic market that we started looking at the global markets. ‘Globalise or perish’ had become the winning mantra for organisations by then. With new opportunities emerging out of Y2K, dot com and liberalisation, we suddenly saw the field widen. Our consulting practice evolved into our software services business which began competing at a global level.
In 2004, we de-merged the software division and listed it as NIIT Technologies. We now have two listed companies. NIIT Ltd. is the education company and NIIT Technologies, the software business. Nine years ago, we also started a not-for-profit venture, the NIIT University. We have three distinct independent entities now that have their own governance structures and pursue their own missions.
In the closed economy, with very few consulting organisations in the fray, NIIT had a great opportunity to grow. It was only in 1991 with the opening of the economy and after 10 years of being fully focused on the domestic market that we started looking at the global markets.
You have seen the skilling sector evolve over decades. When you first ventured into the education sector, there was a lot of enthusiasm among young professionals and students to learn computer skills. How has this scenario evolved over the last four decades? In the Indian context, is the focus still on jobs? Or do you find that people are more passionate about learning and about building something?
When we started in 1981, I recall our first full-page advertisement which appeared in the leading national dailies. It said, “if you have a college degree and no job, this ad can change your life.” It also talked about imparting relevant skills to students which would make them more ‘employable.’ That was the term which became popular.
We had understood by then that after a real stressful high school, students went into a vacuum in college. While we received a great response to our ads, we realised that the students who had applied were mostly those who had a degree and no jobs and were not really the brightest of the bunch.
We, therefore, changed our approach. We went to first-year students and motivated them to enrol for a dual qualification programme that morphed into longer programmes. As they pursued their college degrees, we would equip them with computer skills through four semesters at NIIT, followed by a one-year internship with a company. We called it ‘professional practice’. It also gave them the stipend to pay for their whole computer course. At the end of four years, these students had a degree from a college, computer skills and a one-year work experience—all virtually for free. We called this programme GNIIT or Graduate of NIIT. GNIIT reached its peak with over 25,000 students doing their one-year internship with around 8,000 companies at any point in time. It was, we believe, the world’s largest industry-academia linkage programme.
GNIIT became unbelievably successful. Once it became popular, we moved on to the next big thing. We started introducing computer technology in schools and universities. We were creating our own competition because we knew this was inevitable.
Through the 1990s, we pushed the government for a policy to initiate computer education in schools. This became quite a massive programme and saw schools outsourcing their computer training to us. We told these institutions to provide us with a room in a building, while we would take care of the painting, electricity, furniture, computers and faculty. And what was particularly moving for us was the fact that in many cases, owing to the requirement for online connectivity, it was the first time that the village received electricity or a phone line. We built this huge operation starting in the late 1990s. In the year 2011, NIIT achieved a significant milestone in its mission to take computer proficiency to the grassroots, by imparting computer-based learning to 10 million students in India.
As time went by, and owing to the Internet revolution, online learning gained popularity and the demand for long-term programmes like GNIIT reduced. Today, Massive Open Online Courses (MOOC) are becoming the norm. The picture has changed a lot, as has our learning business. Now 70% of our work is business-to-business transactions and our customers rank among the Fortune 100 companies. This has been a very big change for us. While we still have NIIT learning centres in the developing world, where people can pursue courses, a larger component of the learning is happening online.
However, students still do need conventional classrooms. Being part of such an environment and attending classes regularly is a must for them to stay on track. We are following a blended model— what we call brick and portal— where we are supplementing much-needed classroom teaching with material that is being made available online. This has, in fact, become the trend in every institution. That is basically how the learning business has evolved and is continuing to grow.
However, students still do need conventional classrooms. Being part of such an environment and attending classes regularly is a must for students to stay on track. We are following a blended model, what we call brick and portal.
Owing to the online learning trend, we have seen a huge growth in our corporate learning business. As part of our acquisitions, we acquired a very interesting URL which is training.com. That is where we are giving out more and more free courses. My personal view is that in the area of online learning, the world has still not found a viable method. The MOOCs are not viable anywhere yet.
To build on that, we know that the completion rates are pretty dismal for online courses. Maybe 10% for a really good course, but 5% is the average. The online platform is getting overcrowded. Differentiating oneself on that platform is a challenge. Also, there are so many competing priorities for a learner and keeping them on the platform becomes another daunting task. What is your opinion on the MOOC model of learning?
I think we have to recognise that most children grow up in a school environment which by design makes them highly dependent learners. The teacher, the parent, the quiz, the exam, the pat on the back, the Pavlovian behaviour—this model of education depends heavily on positive and negative reinforcements and a nudge from teachers and parents that makes the students learn. When you remove the scaffolding, they cease to learn on their own.
MOOCs succeed for highly independent learners. We know the story of the impoverished student sitting under the streetlight to study. The world has only a few such highly motivated learners. Those people can get on to MOOCs and be more successful.
The rest of the world consists of dependent learners and unless we become more independent, the online learning model will not succeed. As of now, we need a classroom support structure. Even if you have the best online programmes at ISB, you will still need to ensure that students attend classroom sessions at a certain frequency and are subjected to the tyranny of the learning process because they will prepare just before and around exams and quizzes. For programmes aimed at people who are intrinsically very highly motivated to learn, you can have a much larger online component.
MOOCs succeed for highly independent learners. The rest of the world consists of dependent learners.
To move the conversation towards skilling in the age of Artificial Intelligence (AI), there was an interesting article in the Economic Times on how Amazon warehouses are using technology. The Senior Vice President of the company made an interesting comment. He said human beings follow processes, algorithms make decisions. Do you see early interest in deploying AI in specific areas of the industry? From an industry perspective, do you see a lot of demand for that skill set? How do you see AI progressing in India?
This is the fourth wave of AI that I have encountered. This time around it is looking a little more real because we now have a few things we did not have before. To begin with, we have very large volumes of data available and accessible. Second, we have computing power that can process all this large data at very high speeds. Finally, we have connectivity that can take us anywhere.
As we know, humans are inventors who create things to overcome their own limitations. The telephone and television helped expand the limits of how far one could hear and see. The crane helped overcome the limits of muscle strength. The bridge increased the extent to which one could jump. Earlier, we worked on our physical challenges. AI is an attempt to improve on the mental dimension. This process is quite complex.
How can the mind think about itself is the non-trivial question. So when you look at the vast range of mental activities which the mind does, we want computers to become superior at many of those. Thanks to the three aspects I have just outlined–unlimited storage with rapid retrieval, massive computing capability and connectivity—our ability to take on tasks that the mind does in complex ways is increasing rapidly. Complex procedures can now be executed using robots a thousand times faster than before.
A recent acquisition by us, of a Hyderabad-based Business Process Automation (BPA) company, opened our eyes to the possibilities in AI. To describe BPA, let us take the example of a large bank that receives over 1,00,000 emails a day from customers. The computer puts these emails through one stream and analyses their natural language and choice of words to comprehend their sentiment and content. It then composes replies to the emails based on an understanding of the words used. These go out automatically to the recipients or keep escalating to higher and higher levels of complexity for human intervention in exceptional situations. The entire process happens through automation. A mail comes and in three seconds and a reply is sent.
There is a disproportionate increase in the pace at which many things are done. We call this Robotic Process Automation. We can do natural language processing, deal with multiple languages and translations.
Then there is this whole trend of Machine Learning. We have more and more sophisticated algorithms coming from highly evolved rules. For example, a problem that insurance companies face today is that the cost of processing claims exceeds a significant proportion of the claim amounts. At times the cost of processing the claim may exceed the quantum of the claim!
In one case, a car insurance company collected 900 images of car accidents or dented cars. It then put them into categories like left, right, front and back, based on location and extent of the damage. Therefore, there is a matrix and there are pictures. Now they can take photographs of accidents and put them into their system. The computer places the picture into one of the categories, say right front and suggests the pre-determined amount of insurance to be paid based on the image of the damage incurred.
Basically what the car company’s customers have to do is take a picture of the car after the accident and send it to the company. Within three minutes, the money can reach their accounts.
Clearly, as more and more data is gathered, the machine starts becoming more sophisticated.
But when this process takes a huge leap to unlimited amounts of data, then you have what we are calling ‘Big Data’. Let’s suppose we have data on all the accidents taking place on the planet. The computer will try to do pattern recognition and draw ‘insights’ from this unbelievable amount of information. Computers are beginning to mimic this magnitude of data and computer relationships at super-fast speeds and present ideas.
This is the continuum that we are working with when it comes to AI. Any task which can be made into a process will fall into automation. The romantic view is that when we automate, we are freed from drudgery and can do the real stuff. So what is the real stuff that we should do? Cooking, parties, books or music? Clearly, the jobs that can be routinised have already been routinised.
The problem now is that all this is happening too fast. The loom came three centuries ago, but it took four generations before productivity reached a level where people had to upskill to stay ahead. Today, the speed of change is becoming a concern. It is compelling us to do differently the things that we are used to doing.
The loom came three centuries ago, but it took four generations before productivity reached a level where people had to upskill to stay ahead. Today, the speed of change is becoming a concern.
We now have massive amounts of computing power, huge amounts of storage, very fast computation and connectivity. With connectivity, you can now do crowdsourcing. You can get 1,000 brains to work on a problem. Therefore, the nature of machine-human interaction is changing. This is throwing up really exciting problems for us to solve.
Coming to the question of what is happening in the IT industry, the fact is that in order to move up the value chain, our business processes are transitioning very rapidly towards automation. From conformance-based zero defect process execution which was the thrust in the 1990s, there is a clear shift towards the generation of new ideas. Even over 15 years ago, the value of an organisation was determined by its conformance to the requirements of its clients. At NIIT, we were leaders in the quality movement in the software business. When it came to the ISO certification, we were among the first ones to get it. Also with Software Engineering Institute (SEI) level five and other quality initiatives. But the world is moving fast. Five years ago, we went through a massive culture change and our service vision today is ‘new ideas, more value’. Developers across the globe have to understand that their job is not merely to respond. They need to generate new ideas around AI that can be transformed into usable technologies to create value for customers.
Our industry is making this transition quite aggressively. Not every project is an AI project. But every project lends itself to some level of automation. In my view, we will make this transition very well. There are big companies making the shift, but more ideas will come from our start-ups.
Not every project is an AI project. But every project lends itself to some level of automation.
How can we build an innovation ecosystem, so that at least in some areas of technology, we can be a leader, not just as a follower or an implementer?
In any sector of this country, we can find companies which are more innovative than others. It is a question of the mindset. The millennials of our country are more liberated in many ways. They are highly responsible and their thinking is much freer. They are not looking at jobs in the way we did. These are people who were adolescents at the time when the economy started booming. Even the previous generation, which went through adolescence in the 1990s, is reaching mid-level now and remains very positive. We should never underestimate the power of the environment in shaping the thinking of people, especially when they are in their teens. The minds of the young are more open to innovation. We must believe in them. We are one of the ‘youngest’ countries in the world. Hence, there is an inevitability to our growth. We have a huge amount of youth energy and should create space for the flourishing of their ideas.
A growing number of entrants into the start-up arena are experienced people in their early 40s. This is contrary to the popular belief that start-ups are run by college dropouts. I am very bullish that the start-up phenomenon will be the next wave for our industry.
Thank you so much. It was a pleasure having you here.
Chairman and Co-Founder of the NIIT Group, Mr Rajendra Pawar oversees both NIIT Limited, a leading Global Talent Development Corporation and NIIT Technologies Limited, the software and services arm. A 2011 Padma Bhushan awardee, Rajendra Pawar has been a member of the Prime Minister’s National Council on Skill Development and has served the Prime Minister’s 1998 National Task Force. Apart from ISB, he has served on the Boards of Governors of several eminent educational institutions, including IIM Bangalore, IIM Udaipur and his alma mater, IIT Delhi. A founding member of the International Business Council of the World Economic Forum, he has also been an advisor to Hunan Province in China and to the South African Presidential International Advisory Council for IT. Rajendra Pawar was a Founder Member of the National Association of Software & Service Companies (NASSCOM) and also founded NIIT University, a not-for-profit University notified by the Government of Rajasthan in 2009.
Reema Gupta heads the Centre for Learning and Management Practice at ISB.