Every year Dataquest in conjunction with IDC India, conducts a comprehensive HR survey titled as the Best Employer Survey (BES). The purpose is simple to gauge the latest trends in the IT industry from the perspective of the employers and more importantly from the view point of the employees. Like every year, this year's BES also throws up some interesting surprises, the biggest one is the downfall of the domestic companies and rise of the foreign firms. The implications are quite obvious, Indian companies can no longer take foreign for granted, thinking that Indian employees will choose them over the latter. They need to buck up, as the IBMs and Accentures of the world are adopting Indian customs and amalgamating themselves in the Indian milieu. The flattening of the world had benefited Indian companies, now the foreign firms are going for the kill.
I would encourage, all of you to read this story on DQ website (the link given below) as there are a lot of graphs that complement the story. Hopefully, it will be accessible. Await your comments...(http://dqindia.ciol.com/content/DQTop20_07/employers07/2007/107083117.asp)------------------------------------------------------------------------------
The Other Side of the Flat World
American and European services firms have figured this out and are taking on the India-based firms head on in people management, even adapting global HR policies to suit Indian needs.
They're succeeding.
Friday, August 31, 2007
Smugness and Infosys hardly go together. Yet, in the spring of 2004, Nandan Nilekani had famously proclaimed that the global playing field "had been leveled. The CEO of Infosys was conversing with visiting American journalist Thomas Friedman. The change, according to Nilekani, had been brought about by technology and globalization. For once, Nilekani seemed to let go of his natural modesty as he extolled the strategies adopted by his company. And also by his other Indian peers.
Friedman was impressed. So much so that he called his wife from his hotel room to tell her that the world was "flattening". His book, World is Flat, eulogized the tactics adopted by Nilekani, Ramadorai, Premji and others, proclaiming a new world order. It was meant to be a warning note to the developed nations, particularly, America.
But even before Friedman loudly asserted it, companies like IBM, Accenture, EDS, CSC, and ACS the North American services firms were feeling the heat. Not only were these Indian firms taking their market share in IT services, many of them had listed in America and had soon become the darlings of Wall Street.
The Indians, of course, were beating them hands down in cost. A large part of that cost advantage came from Indias low-cost work force, which was equally good, if not better than the American IT workers.
It was time for them to tap that talent too. Between 2004-2007, almost all American firms and a few European ones significantly ramped up their Indian delivery. Today, for many of them, including the biggest of them all IBM have more workforce in India than in any other part of the world, excluding of course, USA.
In short, the success in the American (or European) marketplace is increasingly depending on how successfully you compete in the Indian market for talent.
While many of them were hiring rapidly, the Indian firms maintained that just hiring by paying more would not make them successful in India. Satisfying the needs of Indian employees which are very different from those in the US (say the need for job security)was not going to be easy.
Easy, it was not. But possible, it is.
This years DQ-IDC Best Employers Survey (BES) gives enough reasons to believe that the non-Indian firms are steadily mastering the art of managing Indian employees, because that has become the numero uno factor for success in the marketplace.
This years BES gives an interesting insight that seems to coincide with Friedmans flat world contention. For long, Indian services companies were making the most of tech democratization, going from strength to strength. But, somehow, non-Indian service firms have come to terms with the new order, and are bringing the battle to India. They have realized that the Indian workforce is the key to the future and have staked a claim.
The success in the American (or European) marketplace is increasingly depending on how successfully you compete in the Indian market for talent . When Indians started to pitch for American IT contracts, they were the challengers; the American firms were the incumbents. In the Indian talent market, the same phenomenon is repeating itself, with the order having been reversed. It is the Infosys and Wipros who are the incumbents; it is the IBMs and Capgeminis that are the challengers.
The survey results show that the world is indeed flat equally flat for all. Or, as they often say, globalization is a two way street. We have come a full circle.
Challenge to Indian Service
If Friedmans flat world was the new world order, call it the new, new world order. In BES07, four non-Indian services firms have made impressive debut. Now there are a total of five non-Indian services firm in the list. IBM, Capgemini, Cognizant, CSC, and Ness Tech these companies have either made a debut or have moved up in the ranking, while the Indian giants, but for TCS, have tumbled.
Non-Indian services firms have also learnt how to make best talent in this flat world It is obvious that Indian services companies that had been using the global service delivery model had a lot of faith on their people management skills. While these companies were bidding and winning contracts abroad against global service companies, so were the non-Indian service companies. Not only have these global companies set up base in India, they have also studied and adopted themselves to the Indian climate. Thus IBM India is just like any other Indian IT biggie, only more attractive due to the international lineage. The implications are loud and clear.
Non-Indian services firm have also learnt how to make best use of the not-so spiky world of ours.
The Charge of the Foreign Brigade
It is certainly not the first time that these non-Indian services firms have performed well on BES. Over the years, they have staked claim to quite many places on the Top 20 list. Last year, five non-Indian firms were on the list, of which three (Cadence, CSC, and Kanbay as part of Capgemini) are back again this year. There were six non-Indian firms in 2005 and over 10 in 2004. In fact in 2004, non-Indian firms topped 4 out of the 8 broad categories like image, culture, job content, etc, while they had topped 8 of 10 in 2003. Over the last few years, non-Indian firms have been recruiting heavily, for instance, IBM India and Cognizant added around 14,000 employees each in the last year itself and were amongst the largest recruiters in India. Little wonder these companies are gaining prominence in the BES.
By and large, the reasons remain the same over last year. The only significant change: overseas opportunities now matter more than growth opportunity. However, managers complain that the love for overseas is restricted to postings abroad for one-two years, unlike earlier. Most of them want to come back to India after a short overseas stint
Of the lot, Cadence has been the most persistent. It was ranked at the very top (#1) in 2003, came in #4 in 2004, #6 in 2005, and #5 in 2006. This year Cadence falls 9 places to be ranked #14because of a fall of 12 places in HR rankings. IBM India has been another regular in the BES, it was ranked at #5 in 2003, #3 in 2004, and #8 in 2005. It did not participate in 2006 and this year IBM re-entered the list again at #6. IBM ranks at #3 on HR rankings and #12 on employee rankings, meaning it still has a lot of work etched out for it. The other most interesting MNC debut this year was that of the European major, Capgemini that ranks at #6, with IBM. The interesting part being that it ranks #31 on the HR list and #5 on the employee ranks, a difference of 26 ranks between the two, the second largest in BES this year.
The change is evident. In the past these companies tried to fit the operations to the processes they had brought along with them. This was certainly not the best way, as Indian employees lay a lot of emphasis on inter-personal relationships. Indians not only work for a company, but, more often than not, are married to them. So while a good pay package was always good, it was never the be all of a job. Thus, a lot many employees preferred the hospitable and informal atmosphere at Indian companies rather than process driven MNCs.
Non-Indian companies have woken up to this unique characteristic of Indian employees and are changing themselves with a gusto. Take the case of Capgemini, its India center is not a clone of the HQ, but follows distinctive HR policies that are aimed at the Indian audience. IBM is trying to be more personal, with Sam Palmisano making frequent trips to India and displaying his love through huge get-togethers that seem like a typical Indian wedding. On the other hand, Intel, has taken a leaf out of the Tatas and is increasingly talking about its CSR activities. It would seem that these non-Indian services are adapting to the Indian work culture and beating the big Indian players in their own game.
Interestingly, growth opportunity and technology one is working on are the two parameters where people are fairly satisfied; yet they would change for those reasons. The toughest challenge for employers
The results of this transformation are there for all to see. Take the case of dream companies four non-Indian companies have made their place in the Top 10. The implication is clear: more Indians prefer non-Indian service firms to their Indian counterparts.
Even when it comes to work culture, non-Indian firms are scoring. There are four non-Indian services companies in the Top 10 with Infosys plummeting to #20 on the culture parameter. The myth that non-Indian companies pay better seems to be dispelled as there are only three non-Indian services companies in the Top 10 list. In fact Infosys is last at #20, preceded by IBM at #19. When it comes to satisfaction parameters, growth opportunity tops. Not surprising considering the industry is still growing at more than 30% and with that everyone is growing
The signs are ominous. There are still a lot of non-Indian firms, like HP, Oracle, etc that used to be part of the BES in the past but are not so now for a variety of reasons. Whereas companies like Microsoft, Accenture, EDS, SAP, Google, etc, that have been quite active in India did not participate in the survey. In the days to come, as these non-Indian services companies adapt further, they will continue to give the Indian companies a run for their employees.
Bangalore Tigers Tamed
But for TCS, the big Indian IT humpty-dumpties have taken a fall, especially the Bangalore tigers. The biggest surprise has been Wipro Technologies, which has dropped by 14 places and is out of the Top 20 list. The main reason can be its dismal performance on employee ranking. It is rated quite poorly on parameters like preferred employer (internal), appraisal, training, and culture. But has retained its HR rank, and is ranked at #3. Over the years, Wipro has had its ups and downs on the annual BES. In the first survey, in 2001, it was ranked a #8, rising to #3 in 2002, falling to #7 in 2003, to #18 in 2004, rising again to #15 in 2005 and #9 in 2006. There has been a lot of inconsistency in Wipros performance over the years, and for the first time, this year it is out of the Top 20.
On the other hand, Infosys has dropped by 4 places and is ranked #8. Like Wipro, Infosys also has performed badly on the employee rank, falling from #8 to #15 this year.
The drop could be attributed to the fact that the company has performed badly on the following parameters: preferred employer (internal), company image, salary, and others. In fact, on a lot of parameters Infosys is at the bottom, like appraisal, people, overall satisfaction, image, job content, culture. There seems to be a major discontent brewing among Infosys employees, all this while the company makes a media splash of its foreign interns.
The explanation offered oft times is that as both these companies are ramping up rapidly, there seems to be a tradeoff. Employees joining the organization now might be expecting the same informal atmosphere that used to exist half a dozen years back, for which these companies have been known. But that personal touch might have been lost in the huge number game. Whatever might be the case, one thing is certain, the Bangalore tigers need to get their act together.
A Giant on Top
While the rest of the Indian biggies have tumbled, TCS has, in a way, improved on its performance. This year too it retains its number one position in the overall rankings. In the HR ranking, it tops the list, though there is minor drop in the overall HR score due to low CAGR as compared to last year. But on the employee part, TCS has gone a notch higher and is ranked #3.
TCS is ranked at the top on two parameters: overseas opportunity and job security. With the company going more and more global, obviously the employees seem to be excited about the opportunities opening up. The employees also seem to be quite happy, as the company scored well on the preferred employer (Internal) parameter, as compared to last year.
Yet, TCS must pay attention to lower and mid-level employees as it is ranked #9 on the issue that the appraisal system was fair. It is ranked #10 for "I get regular and constructive feedback from manager/superior" and #8 "I get a sense of great professional and personal accomplishment from the work I do". TCS is followed by another Indian strong player, HCL Info, ranked at #2.
Size Does Not Matter
Year after year, there is a discussion on how well small companies have fared on the BES. When we talk of small companies it means relatively, in terms of the big Indian and non-Indian giants. This year there were close to eight small companies in the Top 20: iGate, RMSI, Synechron, Tavant, Accel Frontline, Cybage, AztecSoft, and Geometric. iGates performance has been truly impressive as it gained 26 places to be ranked #3.
These small companies have performed well on the employee ranking vis--vis HR, implying that employees are satisfied with things like salary hikes, payment at par with industry standards or, more importantly, that employees are encouraged to take risk at work. Most of these companies have ranked high on the employee ranking, like iGate at #2, RMSI #4, and Tavant #6. Only Synechron, amongst these companies, has been ranked high on the HR ranking, # 5, and RMSI is #8.
There has also been a change in the way employees perceive these companies. Take the case of image, there are three small companies that have come in the Top 5. Even on the preferred employer (internal) parameter, there are two small companies in the Top 5. Though in the dream company parameter, there is only one small firm (iGate) in the Top 5. Small companies score on the job content front, as was made obvious from the fact that four small companies appear in the Top 5. They are also ranked highly on the culture parameter, with three in the Top 5.
The small companies have also learnt the art of retaining: RMSI is ranked at #1 and iGate at #2 on the retention rate. Though attrition is high as well, as on the same parameter, there were three small companies in the Top 5.
According to some arguments, employee rankings are no real indicator of a companys success, as a sudden windfall to cash to employees or other emoluments like ESOPs could influence that. So these companies need to get their HR processes in place to be termed as the great Indian employers.
The Ones that Lost Out
This year there have been quite a few upsets in terms of companies in the last years Top 20 missing the list this time round. Seven companies, to be precise. As stated earlier the most notable was Wipro that has been ranked #22. The others are GlobalLogic (formerly Induslogic) at #21 and Nucleus Software at #28. Companies like NIIT, Sasken, Sierra Atlantic and Interra IT did not qualify for the employee round.
The main reason being a drastic drop in employee ranks. Take the case of GlobalLogic, while its HR rank fell by three places, its employee rank fell a whopping 15 places. In case of Wipro the fall was all the more drastic, with employee rank falling a whopping 19 places to be ranked #30. Nucleus Softwares employee rank fell by 13 places and it was ranked #26. These three companies fared badly on basically three major employee parameters, namely salary, appraisal and preferred employer (internal).
Meanwhile, there were other companies like Honeywell, Virtusa, Zensar, L&T Indo, Tech Mahindra, Nagarro, Mphasis, and Patni that are ranked beyond the top 20 and could find place in the coming year or years.
Roti, Videsh aur Tarakki
Salary, overseas opportunity and growth opportunity are the top three factors employees cited that would make them shift jobsthe same as last year. However, there is a slight change in priority. While salary and compensation did continue at top, this year, overseas opportunity has replaced growth opportunity as the No 2 factor. Surprising considering that the number of Indians abroad who want to come back to India is also on the rise.
The HR managers agree, however, with the finding, while offering an explanation. Many of them contend that overseas posting is still a big lure for employees; but unlike say ten years back, todays young IT engineers do not want to go abroad to settle there. "It is very difficult to find someone willing to be posted abroad for five-six years; but everyone wants a 1-2 years stint," says an HR chief. The reason, he explains, is saving some good money "so that you can come back, buy a property and settle in Delhi or Bangalore." So, in essence, it is a reaffirmation of the first point.
However, what is noteworthy is that in almost all the top parameters (except location), the scores have come down, meaning no single reason is now enough for changing the job. They want a better balance of everything.
When it comes to satisfaction about parameters, growth opportunity tops. Not surprising considering the industry is still growing at more than 30% and with that everyone is growing. Surprisingly, all talks of long hours/stress notwithstanding, most employees feel that they have a good balance of social life and work life. And most of them are happy about organization culture and work climate as well.
The BES also asked the employees to react to specific statements. The maximum agreement was in the area of peer relationships. As many as 84.2% employees strongly agree to the statement that "my relationship with my peers make for a better work environment". More than 81% strongly agreed to the statement that their colleagues help them when they need them. About 76% respondents strongly agreed that people in their organizations treat each other with mutual respect and trust.
The other area that got a lot of strong agreement to positive statements was company culture. Most employees (more than 70% in each case) strongly agreed about their employers value & ethics, fairness of business practice, honesty & integrity, and professionalism towards all stakeholders.
Not surprisingly, most of the disagreement and "somewhat" agreements were in the area of salary and compensation. Only 34% strongly believed that they are getting paid at par with the industry and 28% said they are not encouraged to take risk at work.
It is still a very positive feeling by Indian employees. Peer relations and organization culture are the areas employees are most satisfied about. The total agreement is obtained by adding the "Strongly agree" and "somewhat agree" responses
Attrition Down
While the Indian employees have become more confident and are demanding more salaries, the average attrition rate of the industry has, in fact, gone down by a percentage point. It currently hovers at around 14%, unlike 15% last year. The main reason for Indian employees leaving the company are: overseas opportunity and growth opportunity. Subsequently, retention rates have improved by a percentage point and are currently at 82% for the industry at large.
Being Fair(er)
As India marches on with high growth and rapid development, so do Indian women. Over the last many years, the percentage of Indian women in companies has been steadily rising. In 2007 it was 23.7% (from the companies surveyed). It has grown from 14.5% in 2004 to 19.7% in 2005 and 23.6% in 2006. A growth of 0.1% point is nothing much to cheer about though, there is a lot of work that needs to be done.
The number of people who strongly agreed that the company is sensitive to its women employees has dropped over the years from 66% in 2004 to 64% in 2006, to 63.32% in 2007. It could also be due to the fact that a lot of women employees in the workforce were able to voice their concerns this year.
Summing up, its obvious that Indian service companies are facing stiff competition from non-Indian service firms. The paradigms of the games have changed. Companies like Wipro and Infosys need to gear themselves against the turning tide. The war for the Indian employee is on, and at the moment the adaptive non-Indian firms seem to have an upper hand.
Much water has flown since Nilekani made the assertion about a flat world. He was indeed right, the playing field had been leveled, but one doubts if he counted on the fact that non-Indian firms could also use it to their advantage.
A flat world is certainly not a safe world.
Shashwat DC
Feature: India's Best IT Employers
Feature: CSR by IT companies in India
There is much difference between charity and social responsibility. If one were to gloss over the Indian history, almost all prominent thinkers have emphasised social responsibility, referring to it as 'Dharma'. So there was the Raja's dharma towards his population, the population's (jan) dharma towards the land and so on. Sadly, the concept of Dharma seems to have fallen out of favor for Indian corporates, like any other capitalist entity their sole focus seems to be in amassing wealth. The little that they do, they do it as a favor.
Take the case of Indian IT, not many companies have a CSR policy so as to state, and even those that do, have it just in writing. Most of the companies are having small itsy-bitsy projects on education, etc. There is the famous case of a multinational that adopted a village and made a lot of hue and cry about it, and next year it even took away the computers that it had installed.
The good thing is that it is the MNC's itself, who have brought the concept of CSR in India. And Indian companies need to learn from them. The notable exception will always be the TATAs. Today, every Indian citizen takes the name of the company with immense respect, only because of the amazing work done by the company. And to think of it, they were doing it for over a century, when the concept of CSR wasn't even born. So, to be honest, Tatas have been the only ones who have lived by the Dharma, the rest are more or less Adharmis (sounds a wee bit too harsh).
Anway, I had done an extensive article for the Dataquest, where I had examined CSR policies of various companies, namely IT and how they are faring. Here is the story....
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The charitable side of Indian IT
There is one kind of charity common enough among us… It is that patchwork philanthropy which clothes the ragged, feeds the poor, and heals the sick. I am far from decrying the noble spirit, which seeks to help a poor or suffering fellow being… [However] what advances a nation or a community is not so much to prop up its weakest and most helpless members, but to lift up the best and the most gifted, so as to make them of the greatest service to the country.
-- Jamsetji Tata
Tata is more than a surname in India. Tatas are one of the largest industrial conglomerates in India, yet the fame of the group is not indebted to company’s economic prowess. The name symbolizes trust and ethicality, an intangible asset that has accumulated over a long period of time. Parents are known to have beatific smile when their wards join any Tata company. Not many years in the past, employees would put up with lower salaries, just because it happened to be a Tata company. The answers are not really that hard to find.
In the late nineteenth century, when Jamsetji Nusserwanji Tata founded the group; corporate ethics or social responsibility were coins that were yet to be minted. Still, Tata took a wholly different approach. He talked about human resource management, giving back to the community and philanthropic initiatives. His successors followed suit and over time Tata Group transformed from being just another a corporate entity to a trusted brand name. Intel is another company that has been fairly active in India. “Under the umbrella of the Outreach program, Intel in India has been working to increase literacy, specifically in science, mathematics and computer literacy. We have invested substantial efforts and money in CSR projects in India. Our main focus has been in the K-12 (children up to 12 years). We have different projects running, like Intel Teach, wherein we have a fairly comprehensive training program for teachers to learn computers. We have trained around 6,00,000 teachers in 14 states in India,” says Timothy McGuill, Asia Pacific Region PA (India Public Affairs), Intel.
IBM too has initiated a host of CSR projects in India mainly targeted at increasing computer literacy among the children. “IBM’s philosophy is not just to get involved in community but also to stay involved in order to bridge the digital divide that exists in the society. Hence, most of our corporate community relation initiatives are ongoing campaigns, designed to impart education to lesser-privileged children across age groups through technology. IBM’s Community initiatives – internationally and in India – focus on education and children,” says Jalaja Pillai, manager (Corporate Community Relations), IBM India.
It is fairly obvious that the CSR in India is still linked to individuals, so Narayana K Murthy is a driving force behind Infosys Foundation, while Azim Premji is the inspiring light behind Wipro’s philanthropic arm. Corporates have to yet to truly awaken to the underlying economic benefits that can accrue from CSR.
By involving employees, companies achieve two things; it results in better employee morale as it gives the worker a sense of belonging towards the company. Secondly these employees turn into brand ambassadors for the company and spread the word around. A beaming employee is worth more than a full-page advert.
There are also some unique and interesting projects taken up by companies. For instance Sapient India’s MD Soumya Banerjee had auctioned to slave a day to any employee. Eventually, the silent auction went for Rs. 35,000 that was donated to charitable causes.
This brings us to the essential question, is CSR just another branding exercise, a way to create a favorable impression among the stakeholders and public at large? That was a view that was prevalent a few years back, but gradually that is changing as well. Many corporates now understand the need for CSR and are pretty serious about it as well. While HR dept is often entrusted with the task to carry out CSR projects. A few companies have gone ahead and established a small team to look into such activities.
Yet some challenges persist, as Mcguill from Intel says, “currently the CSR activities are happening in lot isolation. These dots need to be connected in someway.” For instance, he talks of an occurrence, where Intel and a competition were funding a computer literacy program in the same school itself. “There is a lot of overlap that could be avoided and needs to be avoided,” he says.
The government also needs to be more aware of CSR and needs to implement policies and strategies that promote it. Not just from the regulatory point-of-view but general welfare, there could be incentives like tax benefits for companies that are rated highly on CSR quotient. Companies could also look at reporting their CSR spend in the annual reports according to international benchmarks like, ILO Conventions, UN Millennium Development Goals, etc.
All in all, the seeds have been sown and the saplings are taking root.
Feature: CIA's take on computer, IT, Internet and so much more...
Quite recently, CIA declassified a whole set of confidential documents, known as the 'Family Jewels'. It is certainly not the first time CIA has done that, over the years there have been many such occassions. But this time, there was a lot of hype around it. Being an IT journalist, I was quite curious whether the gents at CIA were keeping a track of the way the humble computer evolved? So, I got cracking and was pleasantly surprised to discover that the agency really kept a close tab on the 'wonder of computers'.
Not only that, I chanced upon lot of documents that detailed how the Soviets were failing in their IT designs, or how India was emerging as an IT powerhouse and why China would not really succeed in its modernization efforts. The problem was all these documents were scanned as images (at times quite unreadable), so I had to take a printout of quite many that seemed interesting (I have a fat dossier now) and manually type the text in.
It was quite an effort, as I was a wee bit worried, that some journo sitting across the globe at Time, or even BBC, might be working on the same concept. Anyways, after many 'long nights' the story was done and was published on CIOL. The story gives an idea of not only what CIA thought about computers , but also how it has evolved over the years. I am quite confident, that it makes quite an interesting read....(http://www.ciol.com/content/2170798471.aspx)
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CIA on computers, technology and Indian IT
Culled from the declassified documents of CIA, here is a look at how technology and computers were shaping our world over the years. Of course there is lot of Bond, James Bond-like action involved...
Wednesday, July 21, 2007
The left-facing bald eagle perches atop a 16-point compass star. Metaphorically, the star denotes search for intelligence and information outside the dominion of the US Additionally, the compass star rests upon a shield, symbolic of defense and fortification. The emblem or the seal of Central Intelligence Agency (CIA), the premier surveillance and security agency of the US government, more or less says it all.
Shrouded in a cloak of secrecy, CIA carries covert work across different continents and countries. Not many know, what all the agency exactly does and there is little that the agency doesn’t, according to the few that happen to know and have spoken out. Established just after the Second World War, in 1947, CIA’s mandate is to obtain and analyze information about foreign governments, corporations, and persons. The agency or the company, as it is often referred to as, is also mandated to effect propaganda and handle public relations for the US administration. And finally, it is also, consigliere and caporegime of the reigning US President; ever ready to do his bidding.
Over the years, there have been many accusations and charges against the CIA, ranging from recruitment of Nazi scientists and SS officers to hiding information about UFOs; experiments on unwitting American citizens to concerted efforts to assassinate Cuban President Fidel Castro. There have also been allegations that the Agency had alliances with opium lords in Burma, Thailand and Laos; an assassination program in Vietnam; complicity in the toppling of Salvador Allende in Chile; recruiting and training Economic hit men, the arming of opium traffickers and religious fanatics in Afghanistan including a certain Osama bin Laden; the training of murderous police in Guatemala and El Salvador; and involvement in drugs-and-arms shuttles between Latin America and the US, the list just keeps going on.
But then, most of these is just speculation, and there is little proof of them. Unless and until the agency itself admits it, albeit obliquely. Over the past few years, the Agency, has been declassifying records under the Freedom of Information Act. These declassified records range from elaborate reports to short summaries on a range of issues, right from Cold War to Desert Storm. All these documents can be accessed from CIA’s website (http://www.foia.cia.gov/), using simple search functionality. There were quite a few documents, dubbed as the ‘Family Jewels’, were declassified recently.
Now, it is a well known fact that the agency has also been has been an avid technology user, it was even supposed to own quite a few U2 planes and reconnaissance satellites. Its obsession with technology is two-fold: one for its own use and second what other nations might be using to get an edge over the US Right from the onset, the agency has been making confidential reports and assessing technology. The big push for the same came in fifties with the launch of Sputnik satellite by comrade Stalin in the erstwhile USSR.
So, how could the agency miss the irrepressible computer, the miracle machine that was also evolving more or less around the same time? It certainly did not, on searching the term ‘computer’ on CIA’s website, one gets around 517 declassified documents, from the oldest on German textile industry using computers as a tool published in August 1945 to the latest on WMD search in Iraq dating from September, 2004.
Studying the documents is like taking a trip down the history, a proverbial time machine. One gets to know what really people thought about the wonder of the machine, what were the possibilities according to the people way back then and how things have changed.
A competent ‘mechanical slave’
In 1960, Joseph Becker authored a paper on “The Computer – Capabilities, Prospects and Implications”. The report talks about how “intelligence negotiates for the services of an obtrusive, demanding, but enormously competent mechanical slave.” That’s how the computer has been defined, a competent mechanical slave. First up, Becker distinguishes between two types of computers, one is the analog and the other is digital. The analog, he tells us, is more or less a mechanical device that “gives measurements of a continuum, notably time, direction, distance, or velocity, processes them mathematically as desired and displays the results in some measurable form.” A speedometer is an example of an analog computer.
A digital computer is like an abacus, he states. Digital computers deal with discrete numbers. “Numbers may be used to represent the layers of the alphabet or verbal symbols, the digital computer is the machine that has the major promise for handling the verbal data if intelligence,” he states. 
The paper gives an instance of an digital computer, “Electronic computers like Remington Rand’s UNIVAC or IBM’s 700 series process numbers at speeds measured in millionths of a second, have an immense storage space or “memory” function precisely and accurately, and can process letters of the alphabet when these are numerically coded, treating them internally as if they were numbers,” states Becker as if he was wonder-stuck. In fact, it is this wonder that really strikes you. Don’t we get impressed when we see a humanoid like Aibo doing things, imagine what people must have thought way back then.
Becker talks about how there is a notion that “digital computers are endowed with near-human or even super-human qualities”. And discusses how a seasoned computer operator will argue that on occasion the machine has a ‘personality of its own’ and “his emotional involvement with the machine is such that research being done in man-machine relationships to arrive ay the right mix of human factors for happy and efficient work with a machine as colleague or subordinate.” It seems that the computer back then had a sort of halo to them. But he states emphatically, that the computer do not “think” but are driven through pre-determined set of operations.
In the future, Becker states, these computers would be extensively used in civilian and military work due to their high-reliability and faster processing. He lists out the different component of the EDP system as: input equipment, the computer, storage area, control mechanism and finally output devices. Becker also talks about a ‘recent innovation’ i.e., automatic programming. He talks about IBM’s Fortran language that makes a programmer’s job quite easier, as it contains only “38 statements”.
Becker also talks about how hardware technology continues to forge ahead, with the use of ‘cryogenic techniques and micro-miniaturization of circuitry’. “In the days to come very complex circuitry can thus be built into a cube of stacked wafers the size of a lump of sugar,” he says.
Yet, Becker’s prediction about the future of the digital computer is real attraction. “Looking ahead, designers foresee the day when refrigerated computers the size of portable TV set will operate on wall socket power. It is symptomatic that one of the serious design problems facing the computer engineers is that of minimizing the length of connecting wires, which becomes more and more critical as components get smaller and signal speeds approach the speed of light,” he states.
Looking back, one can say that he was not much off the mark, quite soon, the use of transistors curtailed the need of connecting wires and then of course there were the ICs. In the report, Becker further details the application of the computer and hints at how CIA could benefit immensely from computerization, namely through having a central digitized repository of documents. He also talks about the use of computers for automated translation of documents in foreign languages and to study photos in a better way. He also gives a sort of warning, “if we profit from the experience of industry during the past few years we should be prepared for some radical changes in the organizational structure as a result of the introduction of machines.” It could be that he was talking of labor substitution. All-in-all, the paper is quite detailed in its examination of the mechanized phenomenon, and he sure was not much of the mark.
The clandestine and conniving Soviets
One thing is for sure, after the Sputnik debacle. The CIA kept a hawk eye on all going on behind the iron curtain. Through out the years, there have been numerous reports and assessments on how well or how bad the Soviets were faring. Sometime, they would be quite premonitory in nature, talking about how USSR was rapidly deploying technology and specifically computers to good use. But more often then not, they debunked the Soviet efforts, it must have been quite a relief to the supreme commander at the White House.
One such report from 1977, titled “Soviet RYAD Computers: A Program in Trouble,” talks about how the Soviets were unable to succeed in creating clones of the IBM 360 series. “The USSR continues to experience serious delays in the development production, installation and effective use of its RYAD computers, which form the cutting edge of the Kremlin’s modernization program,” the author states. The reason according to the report was fairly simple, Soviet computers had been designed mainly for scientific applications and had insufficient internal memories.
In the report there is mention of how the Soviets had tired to clandestinely copying from the IBM 360 series. And also they were funding different hardware initiatives across Eastern European, namely in Bulgaria, Poland, East Germany, and others. Even then they were failing, quite miserably so as to say.
That was from the hardware point-of-view, another report goes on to state, how USSR was also trying to source Western software and computer applications that could be replicated at Moscow and other places. And just like the case in hardware, they were failing miserably in software as well. “The leadership of the Soviet software R&D community recognizes -- as revealed in open-source literature – that the USSR’s software industry is technically backward. The Soviets know that, if this problem is not corrected, Western countries will be to extend their domination of advanced information-processing technologies for decades to come,” the author mentions.
Theorizing on possible reasons the author states that the lack of success with hardware might be the reason for the software industry. “The USSR is struggling with limited success to acquire and put into use the computer hardware that would be vital to a modern software industry,” it states. According to the report, to overcome this limitation, the Soviets were trying to source software from Western nations clandestinely. They were trying their hands at data sources codes, simulation software, algorithms for application development, utilities programs, etc. Later on, in another paper, there is a big hint that India might have a role to play in the technology transfer to the communist state.
India; an ally or a threat?
Americans were loath to the idea of the Russians (rather the Soviets) playing around with their machines or software. Under no circumstances did the US government want the Soviets to get hold of IBM machines or software of any kind. Thus for them, every State that had affable relationship with the Soviets was a threat. And India happened to be one such State. 
In June 1985, there was a report published under the title, “India: A Growing Role in Technology Transfer.” Even after declassifying it, the agency has censored close to 70 per cent of the report (there is still a lot they don’t want the Indians to know). In the report, the author not only talks about the danger of India passing out the bits, bytes and ICs to the Soviets, but also in a small way captures the change that was taking place at that time.
There is a lot of talk of how prime minister Rajiv Gandhi was technolizing India and introducing a slew of reforms to that end. “Gandhi has introduced sweeping economic reforms that promise to encourage imports of sophisticated western technology and boost India’s ability to manufacture its own high-tech products. As a result, India will offer an increasingly attractive target for Soviet science and technology collectors in the years ahead,” the report warns.
It also talks about how after decades of slow and uneven growth, India had developed sizeable heavy industrial sector and an impressive economic infrastructure, and was poised for an unprecedented expansion into high-tech areas such as electronics and computers.
“We believe the scope for such growth is vast – India boasts a brand range of scientific activity and a large reservoir of highly educated and technically-trained manpower,” the author states. Adding that, “Gandhi is eager to make Indian high tech goods competitive in world markets, and the development of computer software exports is receiving particular emphasis.”
The alarm bells were ringing due to the close Indo-Soviet relationship. But there was an interesting observation as well, that even the Soviets might not like India to be more techno-savvy.“For the Soviets, India’s growing interest in expanded ties with the West and its quest for advanced technology present both a challenge and an opportunity,” the author mentions.
It seems that the American government had shared its concern with the Indian counterparts, as there is a mention about Indian security practices as well. “Indian officials believe their security procedures are adequate to deny the Soviets access to Western technology with the government, the military and public sector enterprises.
Six years after the report was published, USSR ceased to exist and the Indian economy was liberalized. Thus one could safely assume that the American fears might not have materialized or whether they actually did.
The coming of the Internet
The CIA was also tracking with interest the evolution of the Internet. The main concern of the agency was quite obvious: the Soviets could use it to steal information. A report “Soviet and East European Computer Networking: Prospects for Global Connectivity” published in 1990 list outs those concerns. The main concern for the agency was triggered by the entry in April 1990 of the USSR, Bulgaria, Czechoslovakia, Hungary, and Poland into the European Academic and Research Network (EARN). “The entry is likely to have a profound effect on scientific communities throughout the Soviet Union and Eastern Europe. The Soviet Akademset network, for example will become considerably more value if it provides a reliable bridge to vast foreign networks,” the author states.
There is also the story about the genesis of the Internet and talks about the “primary networks in the West”, and it sure is quite informative in a brief manner. “The best example of a government-subsidized research network is the Internet, which grew out of the US ARPANET project. Starting in the late 1960s, computers at the US Government, military, and commercial organizations conducting government-sponsored research were interconnected to permit the transfer of research data and maximize the utility of computers at various sites of the network. ARPANET spawned similar network, such as the US National Science Foundation-sponsored NSFNET to provide remote access to its supercomputer centers, and these networks themselves interconnected (inter-networked) – the result was termed the Internet. The Internet carries only unclassified information, and it now extends to many foreign countries,” the author states.
In the same report, there is an interesting story about what could be the first “primed” hacking attempt. Dubbed as the ‘Hanover Hacker’, the report details the Soviet attempts to hack US systems to gain information. The interesting thing was that they employed the help of programmers in West Germany (which was then an ally of the US) for the act.
“We have already learned about one Soviet effort to carry out illicit technology transfer via the Western research networks, the case of the ‘Hanover Hacker’. According to press reports, West Germans, acting at the direction of a Soviet handlers, engaged in a form of espionage over the Internet, Breaking into user accounts on computers in the United States and Western Europe by exploiting poor network security – including easily guessed or default passwords – the Germans stole proprietary or otherwise sensitive data. Although none of the data was classified, some of it could be considered ‘technical data’ that might have been restricted from export to the USSR by COCOM,” the author states.
But he seems to be quite baffled by the Soviet attempt. “According to the information provided to the press, the Soviets paid a considerable amount of money for the information and stolen passwords they received, The sum of the damage caused by the hackers – even bearing in mind the possible effects of the transfer of technology – does not seem to be substantial enough to warrant the expenditure. The operation’s exposure, however, could be considered a fluke (the hacking was not detected by any intelligence or police agency in any of the affected countries – it was discovered and pursued by a US academic researcher) and the Soviets may have anticipated far more productive future collection from the use of stolen passwords,” he states.
Beyond that, there is not much on the Internet, maybe there is oodles of reports that are waiting to be declassified.
Unmade in China
It was not only the Soviets that the Americans were worried about, they were also keeping an eye on the fledgling dragon, so as to say. China was also looked upon with distrust and was not thought to be capable of succeeding in its modernization efforts.
A report was published in 1986, titled, “China: Science and Technology Modernization.” The evaluation is quite pithy, that China though aspiring to be a big technology powerhouse could not really become one. “China has had little success in civilian applications of high-priority, advanced-technology sectors such as semiconductors, computers, and telecommunications. This failure will in our view hold back advancement in other high-priority areas, such as the development of automated production capabilities and communications networks for business and governments,” says the author.
Even then, the authors do note that energy and focus of the Chinese authorities in its modernization efforts. There is often the talk of how the senior government officials were quite serious about the S&T modernization and had set stiff goals that had to be achieved.
The goals were to commercialize technology, increase acquisition of foreign S&T, and finally breaking down of the barriers between civilian and military research and production.
But it was a tough task, according to the authors, as work conditions tend to be poor and key skills – such as computer specialists – were still in short supply. The big plus for the modernization efforts were the hundreds of Chinese students that were returning after being educated in Western universities. They were exposed to Western technology and could be a great help in the change.
Yet there was some amount of wariness. “China’s S&T modernization program creates both opportunities and problems for the United States,” The good thing was that there were already signs of a much more “open China.” But a powerful China could also be quite assertive. “China’s growing S&T capabilities and accompanying improvements will increase Beijing’s ability to project power against the nations on its periphery,” the author states.
There is the talk of how China may be able to narrow somewhat the gap in selected industrial technologies with the industrialized world over the next decade. “The degrees of narrowing is uncertain, but catching up fully with the West in any of these areas is very unlikely.” The general outlook for progress in high-priority areas was summarized as below:
Microelectronics: Gap will widen
Computers: Gap will widen
Telecommunications: Gap will remain or widen
Automated manufacturing: Gap likely to persist
Transportation: Gap will remain fairly uniform
Energy: Gap will narrow
Special structural materials: Gap will narrow
Biotechnology: Gap will narrow
“Of course, China will try and avoid becoming overly dependent for technological assistance on the United States or any other country,” the author adds.
In retrospect, one can safely say that the author (or authors) could not have been more off the mark. The transformation at China did go out pretty well, so much so that foreign firms are shifting almost all their manufacturing capabilities to China. The country no longer is dependent on technological assistance but is a global powerhouse of the same.
The world in 2015
Among the many reports, there is one that is quite interesting, titled “Global Trends 2015: A Dialogue About the Future with Non-government Experts.” The report was published in December 2000 and does crystal ball gazing into the future. It is quite an entertaining and speculative view of the future. As we are currently, somewhere in between (in terms of time), it still makes for an interesting read.
“The integration of information technology, biotechnology, materials sciences, and nanotechnoloyg will generate a dramatic increase in innovation. The effects will be profound on business and commerce, public health, and safety,” the report notes.
It also states that in the following years, the time between the discovery and the application of scientific advances will continue to shorten. 
There are many observations on the political and security trends, economic dynamism, regional interaction, regional trends. But lets talk specifically about the IT front. “Local-to-global Internet access holds the prospect of universal wireless connectivity via hand-held devices and large numbers of low-cost, low-altitude satellites. Satellites systems and services will develop in ways that increase performance and reduce costs,” the author states.
The report goes on to list the countries that will play an important role in the IT revolution. “Among the developing countries, India will remain in the forefront in developing information technology, led by the growing class of high-tech workers and entrepreneurs. China will lead the developing world in utilizing information technology, with urban areas leading the countryside. Beijing’s capacity to control or shape the content of information, however, is likely to be sharply reduced,” it says.
“Discoveries in nanotechnology will lead to unprecedented understanding and control over the fundamental blocks of all physical things. Developments in this emerging field are likely to change the way almost everything is designed and made. Self-assembled nanomaterials, such as semiconductor ‘quantum dots,’ could by 2015 revolutionize chemical labeling and enable rapid processing for drug discovery, blood content analysis, genetic analysis, and other biological applications,” the author adds. There is also the mention of how by 2015, information technology will make major inroads in rural as well as urban areas around the globe.
But there is also a rider. “The rising tide of the global economy will create many economic winners, but it will not lift all boats. The information revolution will the persistence of poverty more visible, and regional differences will remain large.”
There is quite some thought that is given to Indian IT. Obviously, it must have been the success of the Y2K that must have woken up the Agency to the potential of Indian IT.
“India’s economy, long repressed by the heavy-hand of regulation, is likely to achieve sustained growth to the degree reforms are implemented. High-technology companies will be the most dynamic agents and will lead the thriving service sector in four key urban centers- Mumbai, New Delhi, Bangalore, and Chennai. Computer software services and customized applications will continue to expand as India strengthens economic ties to key international markets,” the author adds.
On China, the author is unwilling to bet, saying that, “estimates of China beyond five years is fraught with unknowables.” But he is emphatic on Russia’s decline. “By 2015, Russia will be challenged even more than today to adjust to the expectation for world leadership to the dramatically reduced resources it will have to play that role,” he states.
So this is how the world seems in 2015, India continues to go stronger thanks to IT, so does China, but not Russia. We are half way through; it remains to be seen whether in the next few years the authors would be proven right or wrong (they seem to have miscalculated Russian resilience, Vladimir Putin seems to be doing quite well for himself and his nation, as of now).
Computers @ CIA
After talking about computers across the globe, once chances upon a rare report that gives an idea of how the computers at CIA had evolved. In a report, “30 and Thriving” published in 1991, there is the talk about technology changes at the agency. At the onset, there were the AIWAC, which was a total-batch-processing system used for U2 measurements and worked on paper tape. It was the agency’s first digital computer. Next came IBM 407 and 1401, they generated “blip sheets” -- massive paper printouts with up to seven carbon copies of historical data and blank data-entry forms. The 1401 were an improvement as they had four magnetic tape drives, and “8,000 bytes of memory”!
In 1962, came the Univac 490 systems, with 32,000 words of memory and were used for measurement and information procession. Further advancement came with the Univac 494 that brought the wonders of remote-batch processing. The agency went in for the Univac 1100s series in 1975 and in 1986, they were complemented with Sun terminals, it was then that the “light pens were replaced by the mouse.”
As of 1991, the year the report was published, the agency had two Uniysys 1100/93s’ and one Unisys 1100/91. “Together,” the author says proudly, “these systems offers 160 million bytes of memory (approximately 152 MB) and 146 billion bytes (approximately 135 GB) of storage and process 48,000 transactions a day.”
Another document honors Albert D “Bud” Wheelon, responsible for the creation of the Directorate of Science & Technology at CIA. Wheelon was mandated to create the department in a jiffy, post the Cuban missile crisis in 1962. In the report there is a quote by a person who eulogizes Wheelon and talks of how the research at CIA and other agencies have helped the progress of science.
“S&T research contributing to the processing and analysis of vast amounts of information which the agency collects daily. Research in improved data extraction, automatic database generation, machine translation and information retrieval – in multiple languages – have been major efforts supported by interagency groups, often led by S&T officers, and in several cases have led to commercial products. How else will the analyst or policymaker get the right amount of information in the form he wants on his desk when he needs it?” he says.
“The forerunner of the Pentium chip came into being because of some visionary officers in the S&T who believed in a radical concept – the RISC processor – worked with industry in the early 1980s to see that it got a fair chance – now look where we are,” he adds while giving other examples like tools for urban planners, 3D software, and facial recognition tools, etc. that have come from the agency stables.
So this is how the world of technology has evolved over the last years. Surely there are hundreds of thousands of documents and reports that have yet to see the light of the day. At least we can be sure of one thing after reading all these “Family Jewels.” There is so much more that we really don’t know. But we do know that the bald eagle is keeping an eye on all of us, making discrete notes.
