IT sector has survived many tech transitions: Kris Gopalakrishnan on AI's impact

Gopalakrishnan, who has become a philanthropist with his own family office and its investment arm, Pratithi Investments, told Mint in an interview on the sidelines of Global Fintech Fest 2024 on Wednesday that the IT sector is cash-rich and has capable leaders, but companies have their own growth rates, and “some may not make it." Edited excerpts:

Why are Indian companies worried about AI and machine learning (ML) impacting their workforce and jobs?

AI is the new tool that's available for us, just like it completes our sentence for us. If you want to use AI, start training yourself. Newer technologies always increase productivity. I believe that if you stay relevant and keep up to date with new technologies, then as an individual, you will have a job, and as a company, you will be in the business. In the short term, the introduction of new technology always creates some challenges because you have to retrain and understand how it impacts, and sometimes there is a pause till you understand how to leverage this technology…but that is really what is happening now. Over the next ten years, I am very confident in saying that this will have a significant impact, but what that will be, we are trying to figure out. Every time something fundamental, something impactful has been introduced, the economy has grown faster and more jobs have been created.

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What is your SWOT analysis of the IT sector today?

The IT industry has experienced leadership. It is very profitable. It has a very strong cash position and has a loyal clientele. The (IT) sector has seen multiple technology transitions and survived. India has become the default location where the world comes for IT.

Individual companies will perform at different capabilities, will have different growth rates, and some may not actually make it.

In a diverse country like India, how can fintech firms boost inclusivity?

Fintech firms in India are already doing that with micro, small and medium enterprises (MSMEs), microenterprises, and even roadside vendors accepting cashless payments using QR codes. It is also helping people transfer money to their relatives in villages. In a developed country, the banks come to your home if you are very rich, whereas in India, the banks come to your home if you are very poor. In India, we have leveraged technology to increase and improve inclusiveness, and that's something which the entrepreneurs, regulators and the government, through the Digital India programme, have ensured. And that's a unique India model of development where we have put inclusiveness at the highest priority. I strongly believe that.

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Why are we not seeing more Indians giving back to their alma mater like it happens in the West? For instance, you have given nearly ₹100 crore to IIT-Madras.

Traditionally, in India, philanthropy has been targeted towards religion, education and healthcare, addressing today's needs. There must be a shift in mindset to support research. The second thing about research is that it is open, and the results are not guaranteed. When you look at philanthropy, they want results. But having said that, I'm seeing that support for research is increasing in India, which is how it should be. Support for research from industry also must grow. Our investment in research is 0.7% of gross domestic product (GDP). I feel that it should go to 3% of GDP as we transition to a developed economy. We need to transition to a product nation. We need to own more IP and create an economy built around value addition through IT. So, that transition must happen, which means we must increase investments in this interest.

What do you think about the growing creator economy and influencing becoming a new career opportunity for the younger generation?

Without social media, you cannot really be an influencer because a limited number of people will hear your voice, whereas here, your voice can be heard by the entire world. The power in the hands of the individual is tremendous, and people are realizing that you can use it for good or you can use it for bad. Everything has a dual use. It is in the hands of the people. And the influencer is a new mechanism that we have now (and that brings) some sort of democratization of how you take your thought leadership to the masses.

Why are corporates worried about the generation gaps?

Generation gaps have always been there. Every generation goes through that. Because you get new freedom, you get new technology, you get new conveniences, your wealth is increasing. All these things create this generational gap, and technology is one piece of that. So, it is not something to be perturbed about, really. As a parent, you will probably tell your child you can watch TV between this time and this time…as a manager, you have to bring rules into the organization. There is a reason why we need policies; we need behavioural changes, we need discipline.

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What are the key focus areas for the investments you and your family office are planning in the future?

India is going to go from a $3.6 trillion economy to $10 trillion within the next ten years and $30 trillion, possibly within the next 25 years (which is a huge) opportunity. The amount of wealth to be created is massive. Ten times what we are today. New businesses and multinationals are going to be created. If the economy must grow, we need these multinational businesses, and investments have to be made.

But all these investments are made with a profit motive. I'm personally interested in (healthcare and areas like ) neuro-degeneration. As people live longer, it is estimated that about 20% of people will develop neurodegenerative diseases as they age. Many countries have already transitioned to become an older generation. India, over the next 25 years, will transition to become an older generation country, so, we will also face the problem.

As we are a developing country and a developing economy, the cost for us is huge because there is no social security to help these older adults. The family (only) ends up taking care of them. Many of them don't have the time, money or inclination, so the societal costs are also going to be very large. And we don't have support systems. Only now we are starting to think about old age homes and places where there's assisted living. I want to support world-class research in India as part of the creation of IP, which will drive the economy, and I've narrowly focused on neurodegeneration, understanding the brain because it (comes) with the health angle.