The Sustainability Challenge
Nandan M. Nilekani
Co-Chairman,
Infosys Technologies Limited
January 26, 2008
Davos and after – beyond the conversations
Taking time off for a short post near the end of a busy Davos schedule.
It is becoming clear that even as we work together to address global issues, the recent events in the capital markets show that the world is becoming increasingly multi-polar.
Growth is now more distributed and broad-based with the emergence of multiple centers of growth spearheaded by countries such as India and China. As emerging economies continue to grow, they must be involved in the process of global governance. We need a more equitable representation of countries in global institutions for a constructive discussion on issues of trade and the environment.
At Davos, we are seeing the interconnectedness of our world across our panel discussions. Take, for instance, the dialogue on clean energy. We discussed bio-fuels as one of the alternatives. However, bio-fuels as a solution need to be seen in the light of sugarcane, corn and maize – a repository of agricultural produce – becoming sources of energy. This will affect the agrarian economy, the labor situation and burden the food supply chain.
But I think there is a growing realization that while there is the issue of equity with the developed nations about who contributes how much to the transition to a low-carbon economy, there is also a realization that it is in India's own strategic interest – since India is at a critical point of growth – to provide direction to that growth and create a system of incentives to create a low-carbon economy.
All these conversations we have at Davos have a subliminal effect – we absorb them, take them with us, assimilate them and revitalize our intellectual toolkit... I think that then starts flowing into academic pursuits, into business decisions, policy decisions... They manifest in the most unexpected ways.
Discuss this post on the BusinessWeek Bangalore Tigers blog  and the World Economic Forum blog
Previous blogs
January 25, 2008
How about a non-carbon global economy?
Yesterday in Davos, we saw a great deal of discussion around climate change and energy. Yes, there is a tremendous amount of innovation happening in various kinds of solutions related to efficiency, new sources of energy, etc. But my belief is that if we want to bring about real change, we need a global agreement on capping carbon, one that is equitable to both developing and developed countries. If we don’t succeed here, we won’t really be able to implement an effective system globally and it won’t drive incentives towards creating a non-carbon global economy.
Developing countries must have their right to develop
People in India and China are looking for a better life and mobility and higher incomes, and no one can deny them those aspirations. They are entitled to them like everybody else. What we have to consider is that on a per capita basis, India consumes 1.3 Gt of carbon per person compared to the US figure of 6 Gt  .
The global consensus needs to take this into account. The agreement should be fair to developing nations without compromising their growth. We need to arrive at a formula that is amenable to everyone. At the same time, developing countries must take proactive steps to bring in energy efficiency and explore renewable sources of energy.
From coal to coalition
Clean energy presents a big opportunity – you may even call it a profitable opportunity. The technology of generating and distributing power has not changed dramatically for generations. IT can make energy transmission and distribution more efficient. It can provide solutions for developing and managing smart grids on the lines of the infrastructure of the Internet.
To make this happen, we need a concerted private-public partnership. While utility and IT companies can work together to develop new technology solutions to optimize energy and innovate in energy distribution, governments must fulfill their part of the bargain by creating suitable policy frameworks.
Discuss this post on the BusinessWeek Bangalore Tigers blog and the World Economic Forum blog
January 24, 2008
Is the economy distracting us from climate change?
It’s nice to be back in Davos. I have been talking to delegates on a wide range of issues. The conversation here is dominated by a possible recession in the U.S. and a slowdown in the world economy. I just hope our preoccupation with the current financial situation does not distract us from climate change.
The carbon conundrum
Today, the atmospheric concentration of CO2 is 380 parts per million (ppm), up from 280 ppm at the beginning of the industrial revolution. Even as emerging economies achieve a higher standard of living, they exert increasing pressure on the world’s resources. We are consuming resources 25% faster than they can be replaced. We need to focus our efforts and be willing to make investments in our journey towards clean energy.
Bearing the cost of development
Ironically, while there is excess consumption of resources in certain parts of the world, many regions, particularly in the developing world, lack potable water and sanitation services. More than 1 billion people do not have access to drinking water and 2.6 billion people do not have adequate sanitation.
Action notebook
I spoke to a few people from the oil industry and they are convinced about the inevitability of a ‘carbon cost’ in the next five to ten years and they are already working that cost into their business models and investment decisions. If we really want a big push towards clean energy we must create incentives to migrate to non-carbon technologies.
I believe Information Technology can evolve sustainable models of development as energy efficiency is intimately related to technology. IT can help design smart grid solutions for utilities. With thoughtful engineering we can help design green buildings that harvest sunlight.
First, a change of attitude
Infosys can share its expertise in technology and business transformation to help companies become eco-friendly. First, by leading by example and showing that it can be done. Second, by exploring how we can use our knowledge to drive companies to go green.
We have over 80,000 employees working in development centers around the world. We are encouraging them to reduce their carbon footprint. Recently, we urged our investors to opt for paperless communication. I believe these small steps will catalyze the most significant change – a change of attitude.
Later today, I look forward to participating in a discussion on ‘Green IT’ and some fruitful discussions on climate change over dinner. If we channel our collective energies in the right direction, the environment can benefit from our growth and progress.
Discuss this post on BusinessWeek’s Bangalore Tigers blog and the World Economic Forum blog
January 23, 2008
Reflections on Davos 2007
Last year at Davos, the environment was on everybody’s radar. Ruminating on getting it right on sustainability  , I had enumerated the imperatives for both governments and companies and who should focus on what. I had also wondered if we would be able to create a framework that defines what needs to be done but also who does which part of it, and most importantly who pays for it.
Today’s world, tomorrow’s company
Much has happened during the last year. In July 2007, Tomorrow’s Global Company  , a report I had co-chaired along with John Manzoni - Group Managing Director & Chief Executive, Refining & Marketing, BP, identified three ways in which global companies can provide ever-better goods and services in a manner that is ‘profitable, ethical and respects the environment, individuals and communities’ in which they operate.
Climate change needs answers
At Davos this year, the concern over climate change has assumed greater influence, particularly with Al Gore’s Nobel achievement not very far behind us. We hope our discussions will create ample momentum to evolve sustainable models of development.
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Driving Innovation
Kris Gopalakrishnan
CEO & Managing Director,
Infosys Technologies Limited
January 26, 2008
India, Israel and lessons on innovation
On the last day here at Davos, I sense an ‘India’ flavor in the atmosphere. Maybe because it’s Republic Day in India. Or because everyone here is still talking about the India-themed dinner they enjoyed yesterday.
Yesterday Intel’s Craig Barrett spoke about how companies and countries can use technology for competitive advantage. The discussion then went on to India, how India has created an optimistic environment, and how Indian companies are now the challengers – they are going multinational, they are globally recognized, and they are leading global M&As.
But before we pat our own backs, let’s not forget Israel.
Yehuda Bronicki of Amdocs shared a very inspiring perspective on his country’s information technology scenario. Now, we know that Israel is second only to the US in having the largest number of companies listed on the NASDAQ. Many of them are smaller companies driven by a determined spirit of entrepreneurship, and most important, they have the backing of the government. The Israel story shows that companies, irrespective of size, can compete on a global scale if they focus on innovation. There’s a lesson here for India.
Microsoft’s Craig Mundie made a case for developing an ecosystem where companies can play a proactive role in mentoring talent through initiatives with educational institutions. It reminds me of a fascinating session on Web 2.0 that I attended at Davos last year. One year down the line, it is becoming clear that Web 2.0 can enable collaboration between companies and universities. We see that happening in some way already in India and it will be interesting to see how it impacts the global talent pool.
My interactions at Davos reaffirm my belief that the traditional hierarchy of companies is being replaced by networks. Networks do not obey strict organizational boundaries. We now have partners and vendors ideating together with companies. It is in such a scenario that innovation truly begins
Discuss this post on the Financial Times’ Davos Delegates’ blog and the World Economic Forum blog
Previous blogs
January 25, 2008
Simplicity – the hardest challenge for convergence?
On Thursday, I participated in a very interesting CNBC panel discussion with the futurists Paul Saffo and Peter Schwartz. We covered multiple scenarios ranging from the energy efficiency of tomorrow’s automobiles to the way news will be reported in the future. What’s significant is that a majority of the participants had a positive outlook of the world in 2020.
In the same vein, the session on Mobile Internet drove home the point that without simplicity and user-friendliness we cannot ensure widespread adoption of applications. With a multitude of devices competing in the market, we must work towards standardizing an easy-to-use browser or application development platform. If we succeed, the rate of adoption will grow manifold.
Innovation must get ‘personal’
Customer experience has been spoken about for a long time but experiences are becoming more and more relevant in the way customers choose products and services. With the consumer at the center of this evolution, personalization and user experience are key differentiators.
The form factor has limitations, so we must focus on the user experience. We need to design applications in ways that are more sensitive to user needs. We need to evolve ways and means to deliver applications conveniently and offer fulfilling experiences.
Modularize it
It was interesting that yesterday’s discussions on the future set me thinking of the scenario that Infosys has been talking about for the last two years or so. While our vision of a Flat World may seem unconvincing to some, what it really means is that with global sourcing we have been able to modularize innovation.
Take the drug discovery cycle for example – with modularization, collaboration and co-creation, pharmaceutical companies have been able to eliminate redundancies in the research process and bring life-saving drugs faster to the market.
Innovation from the inside out
It is clear that we live in an era of shrinking product lifecycles, where products get obsolete faster than it takes to make them. To meet customer demands, companies need to introduce new offerings in shorter time spans and earn customer loyalty not just by providing better service but through faster innovation.
One route to this is through co-creating with customers and vendor-partners. But internally, how do you create innovation hubs within the company? How do you leverage the power of the entire employee base in running the company? In other words, how do you internalize the power of social networks?
That's something for us to think about...
Discuss this post on the World Economic Forum blog
January 24, 2008
Has innovation finally gone democratic?
Innovation resonates in every discussion at the World Economic Forum. You may argue that it is a case of old wine in a new bottle. Agreed, it was always on the radar of companies, but now there is a refreshing change in the approach to innovation.
The opening session had Dr. Rajendra Pachauri speaking on sustainability and President Hamid Karzai discussing terrorism. These are pressing issues and I am glad we are making room for them.
But what’s significant about the mood at Davos this year is there is a growing realization that we need to collaborate more closely and innovate faster to meet the challenges of the 21st century.
Looking beyond the enterprise
Traditional R&D was monolithic and vertically integrated. However, the R&D lab as we once knew it is history. The Flat World has transformed innovation into an open, global and democratic process. As organizational hierarchies are flattened, we find that most of the nimbler organizations are transforming into network-based organizations. Today’s global company looks beyond the enterprise to think out-of-the-box. It encourages meritocracy and provides opportunities to tap into a global pool of talent.
The challenge from emerging economies
Consequently, emerging economies have a new role to play – that of challengers. As John Hagel, III and John Seely Brown wrote in their incisive analysis on ‘Innovation Blowback’ , the fact that emerging markets are generating disruptive product and service innovations is itself a warning call to companies in the developed world to urgently reposition themselves to deal with the offshore challenge.
A dynamic innovation ecosystem
A collaboration of partners with different types of expertise instills a regulatory mechanism – a system of checks and balances – that mitigates risk and increases the potential for success. I believe a dynamic innovation ecosystem driven by meticulous planning and execution offers an alternative to corporate mergers and realizes compelling innovative value.
With this in mind, I am looking forward to the session on ‘Exploring the Implications of the Mobile Internet’ today.
Discuss this post on Financial Times’ Davos Delegates’ blog and the World Economic Forum blog
January 23, 2008
A time for collaboration
In the journey of innovation, we have only taken our first steps. Last year at Davos, I was convinced that with the emergence of Web 2.0 , the opportunity for co-creation and collaboration is better than ever.
This year round, the WEF summit is themed around collaboration. The ubiquity of technology spurs faster innovation in the Flat World, and we see networks gradually transforming into hubs of innovation.
A ‘global’ network focused on action
At Davos, we connect with people who have similar perspectives, views and goals. Technology innovation serves the purpose of sustaining the spirit and longevity of these connections for greater impact.
We look forward to defining a collaborative approach to addressing pressing business and governance challenges that confront us. This year we are excited to participate in unveiling a powerful new online communication and collaboration space designed specifically for the world’s top decision-makers.
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