Shiv Nadar
Shiv Nadar is an Indian industrialist and philanthropist who founded HCL, one of the first Indian computer companies and now one of the country's largest information technology groups. He is among the wealthiest people in India and has consistently been ranked as its most generous philanthropist, having given a very large proportion of his fortune to education.
HCL Technologies, the listed services business that emerged from the group, is among the largest Indian technology services companies alongside Tata Consultancy Services, Infosys and Wipro. Nadar stepped down as its chairman in July 2020 and was succeeded by his daughter, Roshni Nadar Malhotra, who became the first woman to chair a listed Indian information technology company.
Early life and education
Nadar was born on 14 July 1945 in Moolaipozhi, a village in the Thoothukudi district of Tamil Nadu in southern India. His father was a judge.
He studied at several schools in Tamil Nadu, took a degree in pre-university studies at the American College in Madurai, and then studied electrical and electronics engineering at the PSG College of Technology in Coimbatore, graduating in 1967.
Career
Early career and founding HCL
Nadar began his career at Walchand Group's Cooper Engineering in Pune and subsequently joined Delhi Cloth Mills, where he worked in the company's nascent data products division.
In 1975 he and a group of colleagues left to start Microcomp, a venture selling teledigital calculators. In 1976 the same group founded Hindustan Computers Limited, later HCL, with initial capital of around 187,000 rupees. There were six co-founders.
The circumstances of the founding are essential to understanding what followed. IBM left India in 1978 rather than comply with the Foreign Exchange Regulation Act, which required foreign companies to dilute their shareholdings to minority positions, and its departure removed the dominant supplier from the market overnight. Import restrictions made foreign computers expensive and difficult to obtain. The effect was to create, by accident of policy, a protected domestic market in which an Indian company could develop hardware that would otherwise have had no chance against imports.
HCL introduced an indigenously developed microcomputer in 1978, at a point close to the introduction of comparable machines in the United States, and built a substantial business selling hardware to Indian government departments, banks and companies through the 1980s.
The transition to services
The protection that created the company was removed by the economic liberalisation that began in 1991, when import restrictions were eased and foreign manufacturers returned. Indian hardware manufacturers could not compete with global producers on cost, and most of them did not survive.
HCL's response was to move into software and services, which became the basis of the modern company. HCL Technologies was established in 1991 and listed in 1999.
The Indian technology services industry that developed through the 1990s rested on a straightforward arbitrage: a large supply of English-speaking engineering graduates, paid a fraction of American or European salaries, could perform software development and maintenance work remotely. The Year 2000 date problem provided the opening, since it required enormous quantities of routine remediation work that Western companies were unwilling to do themselves, and it established the credibility on which the industry subsequently built.
HCL's distinguishing emphasis within that industry was on infrastructure management and on engineering and research and development services, reflecting its hardware origins. Where competitors concentrated on application development and business process work, HCL built a substantial business running clients' data centres, networks and systems, and doing product engineering for technology and industrial companies.
Employees First
Under Vineet Nayar, chief executive of HCL Technologies from 2007 to 2013, the company adopted a management approach summarised as Employees First, Customers Second, on the reasoning that in a services business the value is created by employees at the point of contact with the client, and that the function of management is therefore to support them rather than to direct them. The approach involved unusual transparency, including publishing managers' appraisal results to their teams, and it received a great deal of international attention including a book and Harvard Business School case studies.
Succession
Nadar stepped back progressively, relinquishing the chief executive role and then, in July 2020, the chairmanship of HCL Technologies to his daughter Roshni Nadar Malhotra, who had been involved in the group for more than a decade and had led its holding company. He retained the position of chairman emeritus and strategic adviser.
The transition was watched closely in India, both because promoter succession at large family-controlled companies has frequently been contentious and because the appointment of a woman to chair a major Indian technology company was without precedent.
Philanthropy
Nadar's philanthropy is concentrated on education and is unusual in Indian corporate life for its scale relative to his wealth and for its focus on institution-building rather than on donations to existing bodies.
The Shiv Nadar Foundation, established in 1994, has created a series of institutions.
SSN Institutions, founded in 1996 and named after his father Sivasubramaniya Nadar, comprise an engineering college in Chennai that has become among the better regarded private engineering institutions in southern India.
VidyaGyan, established in 2009, operates residential schools in Uttar Pradesh providing free education to academically gifted children from rural families below a defined income threshold, with the explicit objective of taking children who would otherwise have no route out of subsistence agriculture and preparing them for competitive university entrance. It is the part of the programme Nadar has spoken about most.
Shiv Nadar University, established in Greater Noida in 2011, is a private research university offering a broad curriculum rather than the narrow technical focus typical of Indian private higher education.
Shiv Nadar Schools operate in several cities on a fee-paying basis, and the Kiran Nadar Museum of Art, founded by his wife in 2010, holds one of the most substantial private collections of modern and contemporary Indian art and admits visitors without charge.
Nadar has appeared at or near the top of Indian philanthropy rankings for many consecutive years, and the cumulative value of his giving is measured in the billions of dollars.
Honours
Nadar received the Padma Bhushan, India's third-highest civilian honour, in 2008, for services to trade and industry. He has received honorary doctorates and a number of industry awards, and has been recognised repeatedly for philanthropy.
Assessment
Nadar belongs to the first generation of Indian technology entrepreneurs, those who began before the industry existed and in an economy whose regulation made most enterprise difficult.
The achievement has two parts. The first is that HCL built computers in India in the 1970s, at a point when almost nothing comparable was being attempted anywhere outside a handful of countries, and did so competently. The second, and commercially more important, is that the company survived the removal of the protection that had made the first possible. Most Indian hardware manufacturers did not; HCL's conversion into a services business of global scale is the reason it is one of the four large Indian technology companies rather than a historical footnote.
The criticism that can be made of the sector generally applies to HCL as much as to its peers: the Indian services industry was built on the cost of labour rather than on the ownership of intellectual property, and forty years on it remains predominantly a supplier of effort rather than of products. The companies concerned have tried repeatedly to move up the value chain and have succeeded only partially, and artificial intelligence, which reduces the quantity of routine software work required, is the most serious challenge the model has faced.
The philanthropy is of a different order from most Indian corporate giving both in scale and in method. Building universities and residential schools for rural children produces results over decades rather than in a reporting period, and the decision to do that rather than to endow existing institutions has been the consistent pattern of it.