This is the third in a series of five interviews with entrepreneurs who are attending the third annual Global Summit of Leaders this week at Royal Roads University in Victoria. Chocko Valliappa joins leading CEOs and business owners from eight countries, moderated by school alumnus Dean Lindal.
Mr. Valliappa is a fourth-generation entrepreneur from India, whose great-grandfather started out in textiles and went on to become the world's largest operator. His great-grandfather later founded an engineering college and over the years Mr. Valliappa's family has built it into a small private university. They later branched out into coffee plantations and real estate.
His father managed to attract Texas Instruments to India in the early 1980s, the first IT services company to enter the country. IT has since become a $120-billion industry. Mr. Valliappa launched an incubation business in the mid-1990s and brought in companies such as Cisco and Oracle. In 1999, he started processing work for his own Vee Technologies, which now does a lot of work in health care, finance and accounting services. Its offshoot, VeeCreate, performs mechanical engineering design on an outsoucing basis.
Question: You have a rich family history that spans four generations of business owners. A lot of family businesses fail when they are passed down to new generations. How has yours managed to not only survive, but prosper?
Answer: The key to our success is that we've always followed what we've got. It's actually a saying in the Shastra, which is an Indian book on how to live life and how to manage businesses, and it says "what you got from your forefathers is their gift to you. What you do with what you have is your gift to them."
That epitomizes what we do. We continue to do what we've been given but at the same time, you'll notice each generation has followed its own path, whether it's moving into coffee plantations and trying to merge that, or getting into real estate and building that into a warehousing business, or in my case, moving into the technology area.
Question: You've launched several initiatives over the course of your career. Which one do you consider to be the most innovative and why?
Answer: This would have been in the year 2000 when I launched Vee Technologies as a back-office processing centre. It hadn't been done before, so IT, because of Y2K, came to be outsourced in a way where people from India started to fly places for the first time to help fix Y2K problems. That's when the world was introduced to Indian talent: engineers coming in and working from outside.
But in the year 2000 work hadn't been taken back to India and actually processed. That's what we did. And that was a pioneering initiative in business process management, in terms of bringing work to where people are. And that's actually gone well. India now has close to $50-billion in that business.
Question: You've mentioned that there are only about 300 Canadian companies operating in India, which seems extremely low given the size of the market. What sectors present the greatest opportunity for Canadian entrepreneurs who want to do business there?
Answer: Those 300 companies account for about $6-billion in revenue, which is the Canadian contribution to India-Canada trade. I think Canada's been a relatively shy country in terms of investment overseas. If you look at a small country like Switzerland, it probably has more investment than Canada has.
Canada over the years has developed certain competencies in terms of energy. India is a hugely energy starved country: $137-billion is required for the Indian power sector alone. Less than 12 per cent of Indian power comes from gas, for example, and gas is a big thing. India has a huge gas initiative. We actually have a 1,000-km pipeline, commissioned a few weeks or a few months ago by the Gas Authority of India, for a pipeline from Mumbai to Bangalore.
We're actually currently looking at investments in that area because the gas pipeline is going over our land, so it makes sense to get some allocation out of it. Gas is one great initiative, there's also solar, wind and other alternative energies because 57 per cent of India's power comes from thermal, and thermal isn't good. So there's huge scope in that.
Pulp and paper is big in India in terms of consumption. And also water. India is one of the few countries that's going to run out of water much earlier than other countries. The Ganges River has, I think, a $100-billion initiative to clean it up.
Moving a little more into the defence area, in the next 10 to 12 years India will be spending $100-billion. It's one of the largest defence importers in the world. There's a 50 per cent offset initiative in certain areas and that's a huge opportunity for Canadian companies to look at.
When Canadian companies come in and do this type of work in India they can also transport that work to the outside world.
Question: How have you helped build bridges between Canada and India?
Answer: Canadians actually helped us in terms of building the community education system, for the country as a whole, but we were lucky to be chosen as the college they would do it through, Thiagarajar Polytechnic. The Association of Canadian Community Colleges contacted us, brought out professors here, trained them, and after five years said 'this project is over. We want you to go and seed what you've learned with other initiatives in India, with other colleges and other states in India.'
As an offshoot of that we did a joint venture in '96-'97 with New Brunswick Community College's Miramichi campus, where we set up an e-learning centre called Sonaversity. It was a centre for content creation, and a team of Canadian professors and students came to India, stayed there for six months and built the whole ecosystem.
I think it's benefited us a lot because before the Canadians, our profile of students was between the ages of 18 and 21, but then they told us learning should be from cradle to coffin, and the community as a whole came in.
Anyone's welcome to come and have a look. We call it the CIICP, the Canada-India Institutional Co-operation Project. It's a testimonial for what Canada can do for India and help the country. India is a young country today. Fifty-two per cent of India is under 25 years old, and 40 per cent is under 17. It has bigger opportunities available today in terms of skills initiatives, educational initiatives, and things like that.
Question: How do you take that really young, emerging work force and harness it?
Answer: There are two options for a country like Canada. The population of Canada is probably slightly more or equal to the population of Delhi, so you have a huge land base and very few people.
You have two choices. One is to allow massive immigration, which is probably too radical given the Canadian visa policies. The other option is to get work done in places like India.
I think America has done well in terms of outsourcing many areas of work, and I believe that the way forward for the world is to avoid isolated pockets of development. When you have them, you can have a guy from a cave in Afghanistan go and bomb a big city and cause global terrorism.
But if you are integrated with the world you can be insulated. Every morning I get up and I look at the weather in Scranton, Pennsylvania. Why? Because a lot of work for us comes in from the scanning centre in Scranton. If Scranton has a snowstorm, it'll mean 500 people out of work.
I'm coming out with a paper to say that the best way to beat terrorism is to develop close relationships. The way to foster a closer relationship with the world is to integrate. As long as someone's livelihood is dependent on somebody across the world, they see reason, and there's economic prosperity.