Innovation 'will not define the future'
Published: 10 Mar 2004 12:15 GMT
You mentioned that you recently travelled to India and were impressed by the work ethic and skill set. What role does India have in this new world of software?
An Indian company is a better renovator. They're going to be a real player in the renovation market, because their business model has the advantage in the renovation market. It's like the home-building world. Most new home builders are not renovators, and most renovators are not new-home builders. They require different skills. But renovation is just as important as building new homes.
So you wouldn't support legislation to limit offshoring?
Knowledge work globalisation is an intractable trend, no matter who's elected. The only question is: do we participate in it? The United States will cease to become the productivity leader if we pass legislation banning offshoring. Offshoring enables you to buy functionality and have it operating in a very short time.
If you look at our portfolio companies, out of about 60 that could be doing something offshore, 60 percent are already doing it -- mostly in India but also in China and Canada. We're talking about it primarily as a cost move, where quality assurance and testing is moved offshore. You can't compete if you have all your resources in California.
Will Kleiner be investing in Indian companies?
I don't see us investing in pure-Indian companies. If a company had its headquarters in California and a lot of operations in India, that would be a much better model for us. For every 10 entrepreneurs who come to us, about eight of them will be Indian. They will start companies here, and a lot of the resources will come from India.
How does software regain its leadership role in the economy?
There will be another tectonic shift. The whole idea of information access, communication around the world, may be the next one. Revenue will start to grow again, and software will again be the biggest industry on Earth -- until biotechnology overtakes it.
What kind of issues do businesses face today that they didn't, say, five years ago?
Every company out there will have to deal with volatility in their business -- asymmetrical trends they cannot easily resolve. On a national level, when Russia was our enemy, we knew where the Russians were and how to deal with them. With al-Qaida, it's much tougher. On the corporate level, there's a need for transparency, in terms of governance and visibility into information, such as Motorola and its supply chain.
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