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Special feature on Dr. Romesh Wadhwani and Wadhwani Foundation in Fortune India

How to create jobs by the million

Serial Entrepreneur and philanthropist, Romesh Wadhwani is bringing Silicon Valley smarts to a daunting mission: Creating 25 million jobs in India by in the next 5 years.

On his first trip to the U.S after being elected the Prime Minister, Narendra Modi met a select band of CEO’s, investors and educationalists at a New York Hotel. The purpose: connecting with Indian diaspora to discuss ideas that could turbo charge India’s growth. Modi jammed with the likes of Fransisco D’souza, CEO of Cognizant, Shantanu Narayan, president and Chief executive of Adobe systems and Nithin Nohria, dean of Harvard Business School. But, in sheer audacity of vision, few could match Romesh Wadhwani, the 68-year old investor, serial entrepreneur and philanthropist. Wadhwani’s plan: to create 25 million jobs in India in the next 5 years, by driving skills development and promoting young entrepreneurs. Modi was impressed.” It was not just the idea, they bonded at the passion level too,” says Dr Ajay Kela, president and chief executive of Wadhwani Foundation, which will be spearheading this initiative. Wadhwani set up the foundation in 2000 to offer skills training and encourage job creation in emerging economies, such as Pakistan, Malaysia and Indonesia. The India chapter, which is the biggest, is headquartered in Bengaluru.

Dr. Romesh Wadhwani

Dr. Romesh Wadhwani

“The economic greatness of a country is fueled by strength and vitality of its entrepreneurs”, Wadhwani had told me two years ago, when he was in Delhi. That thinking has not changed. Every year some 12 million young Indians join the workforce, according to a recent EY study and 64% of the population is likely to be working by 2020-2021.That’s at the heart of India’s much wanted demographic dividend, which is supposed to propel its GDP, but Wadhwani sees a huge disconnect between job creation and GDP growth. The key he says, is to ignite bottom up, inclusive growth through job creation, something China has successfully done, rather than jobless GDP growth. It seems a perfect match with the priorities of the Modi government, which is throwing its might behind job creation through three high-decibel programmes-Make in India, Smart Cities and Digital India and the prime minister invited Wadhwani to come to India to speed up Wadhwani’s efforts. (This comes in the wake of the sterile period from 2005, when only 3 million additional jobs were created, whereas 60 million job-seekers were entering the work force).

Wadhwani’s big idea has always been high impact job creation through entrepreneurship-and he sees his job as creating entrepreneurs. That said 25 million jobs is an “incredibly hard target” he admits. To help achieve that, the foundation plans to take its existing entrepreneurship courses (offered today in some community colleges in the US and around 500 colleges in India) to over 5000 institutes across India. If even 10 students from each course are inspired to set up their own ventures, that will create half a million startups. If each of these startups employs 10 people (which roughly is the number a startup employs), it means five million new jobs created that year.

To fund this, Wadhwani has promised to donate $100million (631.7 crores) through his foundation last year. And when Modi launched the Skill India campaign on July 15th to mark the first world youth skills day, the tycoon reached out from his silicon valley home, via a video message and committed another $1billion to the foundation.

Any such-well intentioned programs have fizzled out in the past, but Wadhwani says he has a blue-print that will work. His model is the U.S based Small Business Innovation Research Programme, where 13 government agencies give seed-grants to start ups .Over the years, it has become a major contributor to America’s innovation and entrepreneur system.

Broadly speaking, Wadhwani’s plan involves creating thousands of new startups and helping existing small and medium sized enterprises (SME’s) scale up. The foundation’s affiliates National Entrepreneurship Network (NEN) and Skills Development Network (SDN), will be at the forefront of this effort. At the same time, the foundation’s own team is being ramped up, and Wadhwani says he plans to have between 300 and 500 people on board by 2020, up from the current 150.

“We are not playing a lone hand,” he says when I ask how one organization can create so many jobs despite the math adding up on paper. “We are looking at public-private partnerships that include the central government, the state governments and any other private organizations aligned to our kind of work.”

Meanwhile Wadhwani Foundation plans to scale up the operations of 1 million SME’s, through funding, technology upgrades and access to new market opportunities, which could generate another 10 million jobs or 10 jobs per business. Another 10 million jobs will be generated through SDN’s upskilling programs. “Philanthropy for us is a science, data crunching is the basis of scale up and strategy,” says Atul Raja, executive Vice-President, Marketing, Wadhwani Foundation. Take the smart city project, for instance. While the government will provide the physical infrastructure for these cities, the foundation will act as a knowledge partner and develop the necessary skills of those working there.

The foundation has signed two memoranda of understanding (MoU) with the Ministry of Social Justice and Empowerment and the Ministry of Skill Development and Entrepreneurship. Two more are in the pipeline, to be signed with the ministry of defense and the ministry of science and technology. But there is a rider. The foundation will put in money only if the government invests a bigger amount in the same project.

“We are telling the government that we already have tried-and –tested models for training entrepreneurs and upskilling workers. But, we can only scale up if you become our partner,” says Kela. He cites the MoU with the Ministry of Defense as the model. The foundation was pledged $100million over 5 years, provided the ministry chips in with $1billion for a research initiative on a small-business innovation to fund 10,000 entrepreneurs in small businesses that can use IT skills to develop smart defense equipment. Kela points out that India is the biggest importer of arms and ammunition (worth nearly $20billion a year), but “given support and funding, we can easily become a key supplier of smart equipment to the world. “He wants to replicate the model in manufacturing, energy, infrastructure and retail-high-impact industries that create the most jobs.

The foundation is partnering the government to introduce 25,000 grants across sectors. The government will contribute the funds, while the foundation will work as a knowledge partner and help create the ecosystem. Kela says the stars have aligned for ‘Project India’, courtesy the governments push to skilling and entrepreneurship, and it’s willing to walk the talk by setting up a separate ministry. “The PM’s commitment is extremely encouraging, “adds Wadhwani.

It sounds impressive- and more than a little ambitious. Creating 25 million jobs in 5 years is far easier said than done. On the plus side, Wadhwani Foundation affiliates NEN’s entrepreneurship development program is a part of several college systems. NEN, initially tied up with premier institutes like IIT’s and the IIM’s , trained their students and faculty and later expanded across 500 institutes. It is now targeting 10 times that number, creating many MOOCs (Massive open online courses), and increasing its network of mentors from the current 4,000 to 20,000.

There have been several successes already: N.D Shashank who set up Practo Technologies; Vijay Sharma of Exotel; and Next Gen co-founders Abhishek Humbad and Richa Bajpai.

And what about the massive scale-up that the project requires to meet its ambitious target? “The only way to do that is create a vibrant, thriving silicon valley-type ecosystem where all stakeholders can prosper through linking up and connections,” says Sashi Chimala, Executive VP at NEN. Except that Silicon Valley took years to build that universe and Chimala has only months to launch it in as many cities as possible. Chimala, a native of Andhra Pradesh and also a valley entrepreneur, credited with launching six companies, joined the organization just eight months ago, after his return from the US, sitting in Bengaluru office, sipping coffee, Chimala doesn’t sound too worried about his target.

“ We have selected 5 cities—Chennai, Bengaluru, Delhi –NCR, Indore and Hyderabad—and four sectors—pharmaceuticals, retail, hospitality and healthcare—which will our focus areas this fiscal for scaling up or building new businesses, “ he explains, adding that one-to-one and down hall meetings with entrepreneurs, mentors and investors have already started in Chennai to utilize the power of networks. ”The idea is to understand and resolve issues that are preventing bankers and venture capitalists, and angel investors from funding entrepreneurs and small businessmen, “he says .The ecosystem will be extended to 20 more cities over the next 5 years. NEN has also identified 500 SME’s, 1500 student entrepreneurs and 100n startups for further intervention to create 10,000 jobs this year.

If NEN’s task is to look after the demand side of employment, SDN is developing the supply side of skilled individuals. The network was set up by Wadhwani Foundation in 2011, to train high school and college students, as well as those in entry-level and mid-level jobs, to fix the skill gap. SDN has tied up with Ministry of Human Resource Development and several state governments to provide vocational education in 150 high schools, 18 university grant commission-affiliated colleges, and 100 companies, says SDN’s executive President Manish Mohan. It has developed a number of multimedia curriculum on a cloud platform and plans to use open- source videos and mobile technologies to obviate the need of text books and instructors. The platform is expected to train over 2 lakh people in 2015-2016 and three million students a year by 2020, besides introducing the program in 50,000 schools and 10,000 colleges.

Just like Chimala, Mohan has his task cut out. SDN must ensure 10 million placements by taking its vocational training from the current six to 20 states, from 1400 to 50000 schools, and from 1,04,000 students to 50 lakh. The task is challenging but not unachievable, believes Mohan, given the networks’ success in states like Haryana and Himachal Pradesh. Corporates came to these semi-urban schools to hire students for their front-end jobs and spoke highly of their job readiness. Himachal Pradesh witnessed a greater success rate with more than 500 students being picked by the visiting companies.

THE PASSION, THE PLANNING, and the pace for this project reflect the entrepreneurial culture so cherished by Wadhwani. After all the India jobs project is his brain child, and so, must bear his touch. People who know Wadhwani trust his Silicon Valley smarts- and obsession with results which dictate even his philanthropic missions. The white-haired, soft-spoken Sindhi was born in Karachi, and later moved to India with his parents. As a toddler, he underwent a series of surgical procedures after contracting polio. But that did not prevent him from a remaining a topper throughout.

His success can be largely attributed to his tenacity. So when the authorities at IIT Bombay denied him admission for the second time (The first time he was underage), with the medical officer saying he would not be able to walk the long corridors of the buildings, Wadhwani was on the war path. “I had never allowed polio to interfere with my work or ambition. And I was not willing to take it lying down. I saw that the doctor was a little over weight and challenged him to race me to the college gate. Once he realized that I was dead serious about my admission, he gave in. The race never happened, “he says with a chuckle.

Those early experiences of discrimination because of his disability made him study the field in detail when he began his career as a philanthropist. He is convinced that disability management that revolves around welfare, reservations and short term (and short sighted practices) will not deliver results.

He believes that the solution, again, is gainful, mainstream employment. That’s why he started this Opportunity Network for Disabled. “Today, businesses have , begun to recognize the business value that exists with the disabled in terms of increased productivity, inclusivity, loyalty [retention], and quality of output ,” he says. After his UT years, he moved to the U.S., where he enrolled at the Carnegie Mellon University for a masters in electrical engineering in 1969, finished it in 1970, and got his doctorate in 1971. “That’s the quickest ever. I believe the record still stands,” he says. From there, he started his career as a serial entrepreneur, a seemingly

Strange option. “I come from a middle -class background with no history of Entrepreneurship”, he says. His first startup (“Unless you count the canteen I set up in Hostel No. 2 [at ITT Bombay] as my maiden venture “) was Compuguard Corporation, set up in 1972. He ran Compuguard for 10 year and made it a $10 million business before selling it off. “It was a mediocre venture at best and I made a lot of mistakes,” he says. “I didn’t pay enough attention to the basics -product quality, talent management, or customer relationship.” Next he took over American Robotics a company launched by the Rockefeller family. Developing industrial robots was all the rage back then. But after a few years, when Japan started dumping robots in the U.S, the company started making heavy losses. “I stayed in the business for eight years as I thought it was my moral responsibility to pay back the $40 million that venture capitalists had invested. And I ensured that they got most of the money back” says Wadhwani.

He joined the boards of several technology firms in 1990 and moved to Silicon Valley with wife Kathy and 4 year old daughter.” I loved the deeply passionate, highly competitive, though casual, environment of the valley, which had attracted the best and brightest technology minds of America,” he says. A year later, he launched Aspect Development, a collaborative software solution for business-to- business market places. Wadhwani made Aspect a successful public company and then sold it to i2 technologies for $9.3 billion in 2000.

Today, he is chairman of Symphony Technology group, where he has launched 22 high-tech companies—the first time he has launched so many companies in one go.” This is my last start-up and it is for keeps, like the foundation,” he tells me.

So, which Wadhwani is it who is propelling the ambitious job creation program? The name board on the door of his fifth floor cabin in the Bengaluru office gives me the answer, it does not have his name on it; merely says Wadhwani Foundation.