A very middle class revolution -- by Vir Sanghvi Back   Home  
I am an information technology virgin. So, it is only with the greatest of hesitation that I accept invitations to moderate discussions connected with the information technology industry. In March I went to Bangalore to anchor a seminar on software professionals and their contribution to society organised by Infosys. And two days ago, I moderated another IT-related discussion (hosted by Tech 4 U, the HT supplement) on India’s prospects of becoming a technology superpower.

Both discussions served as eye-openers for me. I identified instantly with Pramod Mahajan who said, at the Tech 4 U discussion, that in 25 years of politics, he had never come across as hyped and as popular a phenomenon as India’s IT revolution. It had got to the stage, said Mahajan, that rustic MPs collared him in Central Hall and demanded that he opened a technology park in their constituencies. It did not matter that few of the MPs recognised that there were no trees or lawns in technology parks. They just wanted a piece of the IT boom.

At the Infosys seminar, I was struck by the phenomenon of young engineers, many in their 20s, mostly from middle to lower middle class backgrounds, who now make more money in a month than their parents had made in their lifetimes. The subject for the seminar had been NR Narayanmurthy’s idea. The Infosys chief wanted the young millionaires to evaluate their contribution to Indian society. Engineer after engineer got up to say that by choosing to work in Bangalore over Seattle, he had already made a contribution to India. And that was quite enough, thank you.

It fell to Narayanmurthy to make a point that should have occurred to me earlier. Did they realise, he asked the engineers, that they were all products of the same socialistic India that they now affected to deride? All of them had been created by the IITs, a Nehruvian institution dedicated to the seemingly utopian vision that if the tax-payer spent lakhs on subsidising the education of bright young people, India would benefit someday. It was because Indian society had contributed to their growth that the engineers were millionaires today. The seemingly utopian vision had been validated by history.

From this limited exposure to the IT industry, I have come to certain tentative conclusions. One: IT is the biggest thing to happen to India since Independence. Two: It is the one area in which Indians can take an extraordinary pride because we are truly world class. After decades of producing substandard, overpriced industrial products, we finally have a genuine success on our hands. And three: it is a homegrown success. We’ve done it ourselves because of our innate skills and our educational system. As Michael Lewis writes in The New New Thing, “In 1999, a sociologist discovered that nearly half of all Silicon Valley companies were founded by Indian entrepreneurs. The definitive smell inside a Silicon Valley start-up was of curry.”

But it is a fourth factor that makes the IT boom special. Ever since India introduced the universal franchise and the licence-permit-quota raj (more or less in tandem) the middle class has been squeezed out of everything that matters. The numbers game ensures that the middle class has little effective political power — it simply can’t compete with the votes of the rural poor. And the licence raj ensured that Indian industry continued to be dominated by a traditional trading class that knew how to manipulate the system.

The great thing about the IT revolution is that it is a middle class revolution. That explains its popularity, its very character and the hype surrounding it.

Till around ten years ago, if you were bright, young and middle class and wanted to make serious money, you had two options. You could either go abroad or you could rob a bank. The IT revolution has destroyed that assumption. The Infosys engineers who Narayanmurthy lectured are middle class, the NRI computer millionaires — the Sabeer Bhatias and Pavan Nigams — are of determinedly middle class origins and all the young programmers who hope to follow in their footsteps are also proudly middle class.

For the middle class, the IT revolution represents not just international recognition but domestic validation. It suggests that middle class values and aspirations — hard work, education, a refusal to pay bribes, a strong sense of ethics etc. — have finally won out over the venality of India’s politicians and the dishonesty and cynicism of our industrialists.

Take Narayanmurthy’s own example. Born into a lower middle class family, he was fortunate to have a father with a love of education and culture (he would make his children listen to Western classical music). The IITs — with their government subsidies — gave him the kind of education he could never have afforded. He travelled around the world hitch-hiking (it was all he could afford) and would have been quite content to remain a salaried employee all his life.

Then, one day, the bosses at his family-run company asked him to do something inappropriate. He voiced a contrary opinion and was told, “It’s not your company. Do as we ask.” In a fit of anger, he quit and vowed never to work for people who were that unprofessional. Along with a few friends, all of whom contributed Rs 10,000 each, he founded Infosys. It took ten years of struggle but Infosys is now India’s most admired company and an international success story.

The Infosys saga is India’s answer to the American Dream. Whatever our other virtues, we have never been a land of opportunity. It is this frustration that has driven so much of the educated middle class abroad and made us sceptical of anybody who makes money in India — we always suspect that he has paid bribes or broken the law. But the success of Infosys demonstrates that not only can you run a world class company in India, you can do it ethically and still create hundreds of millionaires.

Many consequences follow from the success of such IT companies as Infosys. The first is that, as Pramod Mahajan discovered, everybody wants a piece of the action. When the IT boom was at its height many people bought IT stocks at their peak. Almost all of them have lost money — don’t forget that this is a middle class revolution: you don’t get anything for nothing, you have to work hard for it.

The second consequence follows from the first. Those who didn’t invest in software companies at the right time have tried to make their fortunes in dotcoms. This boom followed a bizarre logic: my dotcom will never make money but some idiot will buy it from me at a higher price. Inevitably, because the logic was flawed, the boom is over.

But there is a third — more significant — consequence and it emerged most strongly at the Infosys seminar. When a middle class the size of India’s finds international validation and recognition, it begins to treat itself as a sovereign State. The engineers who saw no reason to contribute more to the country are not alone. An increasingly assertive middle class is now openly demonstrating its contempt for the former fat cats of the old economy and the Mulayams and Laloos of our political class.

I was impressed by Narayanmurthy’s decision to hold seminars to remind his millionaires of their roots. But I am not sure that others are following his example. The opportunities posed by the IT revolution are phenomenal. But the danger cannot be understated.

The Indian middle class comprises some of the world’s most intelligent and best-educated people. Because it has not been allowed to lead India, the disconnect between the middle class and the rest of the country has grown. If the IT revolution remains a middle class revolution, the consequences for Indian society could be profoundly damaging.
This article was published in HindustanTimes.