N.R. Narayana Murthy on Globalization

Working in Paris for a French software firm in the 1970s prompted Murthy to re-examine his socialist instincts. He chose to return to India specifically to test whether entrepreneurship could improve Indian society, rather than chase a comfortable European career — a decision he frames as a duty of entrepreneurs to invent products and create jobs.

At Infosys, Murthy is credited with articulating and operationalising the global delivery model — the practice of executing software work from India against overseas client requirements. This model, with its time-zone arbitrage and cost discipline, became the structural backbone of the entire Indian IT services industry.

Customised software demand in the late 1970s and early 1980s, Murthy notes, was rising in the West while India sat on an underused engineering workforce. The founders spotted that mismatch early and bet that Indian suppliers could profitably plug into the global custom software supply chain from a Bangalore base.

When Yale's Nayan Chanda interviewed him in April 2006, Infosys was about to mark its twenty-fifth anniversary and had grown from a 1981 founding on two hundred and fifty dollars of capital into a firm with a market capitalisation of roughly twenty-two billion dollars. Murthy attributed the rise to luck, timing, and an early bet on two converging paradigms: the PC revolution and globalisation.

Murthy defined entrepreneurship as the courage to convert a powerful idea into wealth. He told YaleGlobal that the 1981 environment in India was deeply hostile to business, but that Infosys rode two parallel shifts: the falling cost of computing power unleashed software demand, and the globalisation paradigm made sourcing talent across borders acceptable.

He framed the opportunity as releasing the power of India's English-speaking technical talent to produce software for the global market. Even so, the first decade was marked by tremendous friction to business, and Infosys only truly accelerated after the 1991 reforms that came after India's foreign reserves had collapsed to about 1.2 billion dollars.

Defending the cheap-labour critique of Indian IT, Murthy reframed the value proposition as better value for money rather than cheap labour — for every dollar, Infosys delivered more. He also pointed to India's structural advantages: a billion-strong population, 3.5 to 4 million graduates a year, 450,000 engineers, and roughly 300,000 master's-level IT and applications graduates annually.

On China, Murthy was emphatic that any top-five software services firm had to operate there: it was a fast-growing ten-percent market, a sourcing base for global clients who wanted China coverage, and a talent pool whose engineering output was rising rapidly. He framed Infosys's China move as strategic necessity rather than opportunism.

Asked about western backlash against white-collar offshoring, Murthy's reply was blunt: people in glass houses should not throw stones. He argued Indian firms were merely executing the liberalisation and openness that Western governments had preached to India in the 1980s, and that Western corporations were becoming more, not less, competitive as a result.

Murthy endorsed the then-emergent concept of the globally integrated enterprise, telling YaleGlobal that Infosys's Phase Two M3+ programme aimed to extend the global delivery model beyond software into accounting, systems integration, equity research and customer service — turning India-based execution into a cross-functional corporate utility, not just a coding shop.