A Titan of Globalism

In the past decade, "offshoring" has created much anxiety for American info-tech workers. But for Infosys Technologies, the India-based company that's led the revolution in the way work gets done, global outsourcing is a trend that's fueled rapid growth: this year Infosys should hit $4 billion in revenue. In the latest in his series of interviews as part of the Kaplan-NEWSWEEK M.B.A. program, NEWSWEEK Chairman Richard M. Smith spoke with Infosys CEO Kris Gopalakrishnan about the challenges of globalization. Excerpts:

SMITH: Could you describe how you've built Infosys?
GOPALAKRISHNAN: Our model is built on the premise we can split any work into its various components and execute that work where the talent and resources are available, where the costs are lower, and where the work should be done. On an IT project, for example, defining the requirements of the project typically gets done closer to the customer. The details of the project—design, coding, testing—gets done in locations like India. Because we're able to distribute the work and leverage the different economies around the world, which have different costs, we're able to lower the overall cost of doing the project, as well as take advantage of [different] talent pools. And in some cases, we're able to accelerate the project because we are able to leverage the different time zones as we move work around the world.

Why shouldn't the developed world feel threatened by what you do?
As technology creates new ways in which work is executed, changes happen and every person who gets negatively impacted will feel threatened. So we must make sure there are safety harnesses to help people through retraining or other types of support. But ultimately, the medium- to long-term benefits of globalization are positive for everybody. Let me give you an example. As our industry has increased economic activity in India, it's becoming a bigger market for American exports. India is one of the fastest-growing markets for the aircraft industry … Today you can't find any soft drinks in India except Coke or Pepsi ... Globalization is not a recent phenomenon—there have always been waves of people moving and work moving.

When you hire people in the United States or Europe, how do they feel about working for Indian management?
As our brand exposure has increased, it has become easier to recruit abroad. When we go to a U.S. college today, we have 30, 40 students attending our orientation sessions. Traditionally … people will [go] from a developing country to a developed country to do work. You've seen Indians coming from India to the U.S. to study or work. Now and in the future you'll see people going from places like the U.S. to work in India. As that happens, perceptions about job loss will change because jobs are available for Americans in India and China.

Despite the success of Thomas Friedman's book "The World Is Flat," are there still many cultural, ethnic and political obstacles to globalization?
There are hurdles, but I believe they will be transitory. With any change, some sections of the population will be fearful, but as long as transitions are handled properly, you reduce the negative impact. And cultural differences are temporary in nature in the sense that cultures keep changing. In India, especially in urban areas, we are adopting to the Western culture at a very, very fast pace.

Is it true companies like yours are running into labor-market constraints?
Access to talent is going to be the biggest challenge for any company. Even though India has a billion people, we only produce about 450,000 engineers, and for IT services we primarily recruit engineers. India is also a fast-growing economy—it's growing at around 8 to 10 percent annually—which means there is tremendous demand for these engineers from other sectors of industry. There are multiple things we're doing to manage this challenge. We want to be sure that we're a company of choice. We've created very efficient, effective training infrastructure, so we can bring in people with limited knowledge and train them to be software professionals. We're going outside India and recruiting globally, in the U.S., the U.K., Japan and Australia. We're also creating development centers in other scalable, large countries like China, Poland, the Czech Republic, Mexico and Canada. This allows us to tap into a larger pool.

As you manage the Infosys brand, it sounds like you're nearly as focused on attracting employees as you are customers.
Brand management is all about building trust with your stakeholders—customers, employees, investors, as well as society. We can't ignore anyone.