[MUSIC PLAYING] DAVID SKORTON: Each year, the university honors, as you know, one Cornell alum as the Cornell entrepreneur of the year. The standards for this award are high and define entrepreneurship in more than monetary terms. The Entrepreneur of the Year must have started and successfully managed a business, contributed substantially to the turnaround or growth of a business, or managed a larger business with notable entrepreneurial achievements, must have contributed to the private enterprise system in ways that are an inspiration to others, must have used business skills and creativity to enrich humanity, and must have conducted all business and personal relationships with the highest integrity.
It is this combination of entrepreneurial achievement, community service, and high ethical standards that we have celebrated each year since 1984. And I'm delighted that several previous winners of this most distinguished and sought-after award are in fact here today, three of them participating in today's program, Jules Kroll, class of '63. Is Jules still here? There's Jules, wonderful.
And this afternoon, you're going to have a chance to hear from Kevin McGovern, class of '70-- Kevin-- and Jay Walker, class of '78. I didn't see Jay. Is he here? There's Jay, wonderful. And other Cornell entrepreneurs of the year are also on hand, which shows you, Ratan, how much everyone wants to celebrate with you, and also every year, celebrate this event. Other Cornell entrepreneurs of the year who are here are John Alexander-- John-- Irwin Jacobs-- Irwin, welcome-- and of course, Jeff Parker. Jeff, thank you for all you do.
The 2013 Cornell entrepreneur of the year comes from India, a country that is gaining every day an ever larger presence on the world stage thanks to many things, its status as the world's largest democracy, the rapid economic growth it has experienced in recent decades, and at one and the same time, one of the most advanced and ancient civilizations and one of the most up to date and groundbreaking current cultures.
Cornell is fortunate to have an alum, a member of the board of trustees, a mentor, and a friend who was a key player in that explosive and exciting growth as well as a global leader in philanthropy and in corporate responsibility. As chair of Tata Sons Ltd., the holding company of the Tata Group, Ratan Tata heads a conglomerate of over 100 companies, operating in 80 countries on six continents.
Early on however, his entry in the family business was not a foregone conclusion. He came to Cornell as an engineering student in 1955 but became fascinated with architecture in which he earned a bachelor's degree in 1962. By the way, Ratan, as you know, that's number one undergraduate, architecture. So I'm glad to say your degree is worth more now than ever.
He worked briefly as an architect in the United States before he was persuaded to return to India and to join Tata Sons. Gaining experience with various Tata companies, he rose quickly and was made chair when his uncle retired in 1991. Since then, he has altered and expanded the Tata Group in bold and visionary ways, selling off less promising companies, fortifying others, and launching bold, new initiatives. He has more than once triumphed over predictions of sure failure.
Under his leadership, the Tata Group has acquired such international corporations as the Corus Group, an Anglo-Dutch steel and aluminum producer, the Tetley Group, Jaguar, and Land Rover. And in 2009, as I'm sure many of you know, Tata Motors attracted worldwide attention with the launch of the visionary Nano, whose $2,500 price tag has made car ownership feasible for middle-class Indians.
Like many of Ratan Tata's business projects, the Nano represents both good business and good works. The sight of whole families squeezed precariously on a single motorcycle or scooter, a common site, as you know, in India and elsewhere in the developing world, inspired Ratan to take on the challenge of producing affordable, safe, personal transportation. He took a personal interest in the car's design and in finding ways to keep the price down and stable.
These and many other accomplishments have been widely recognized in our business world. In 2007, Ratan Tata was listed by Fortune magazine as one of the 25 most powerful people in business. And Barron's cited him as one of the 30 most respected CEOs in the world. In 2008, he made Time magazine's list of the world's 100 most influential people. Today, the Tata Group has 425,000 employees and a long history of treating these employees with respect and well.
The origin of the Tata Group lay in a textile mill opened in 1868 when our first matriculants were at Cornell. Astonishingly, for those days, the mill offered its workers pensions and compensated them in case of accident. The Tata tradition of corporate responsibility continued through the years and has been solidified by its current share.
Ratan personally holds only a small stake in the Tata companies, 66% of whose equity capital is held by philanthropic trusts. These trusts have created national institutions for science, technology, medical research, social studies, and the performing arts. The trusts also provide aid and assistance to non-government organizations, working in the areas of education, health care, and employment.
In 2007, Ratan accepted the Carnegie Medal of Philanthropy on behalf of the Tata family. And last July, he received a Lifetime Achievement Award from the Rockefeller Foundation for his innovative approach to business and philanthropy. Cornell too has benefited from the enormous generosity of the Tata Group. The Tata Education and Development Trust in 2008 committed $50 million to Cornell to establish two projects that would benefit India as well as Cornell, the Tata scholarship for students from India and the Tata Cornell Initiative in Agriculture and Nutrition, each a $25 million trust.
The University currently proudly enrolls 22 Tata scholars, bright, young people who otherwise might have not been able to attend Cornell. And the Agriculture and Nutrition Initiative is a long-term project focusing on India's integrated food system with the ultimate goal of reducing poverty and malnutrition. We are all deeply grateful to you, Ratan, not only for these endowments, but for your service on the Cornell board of trustees. Your wisdom has been and continues to be of immense value to each of us individually and to your Alma mater.
This December, Ratan Tata will retire from the chairmanship of Tata Sons. Not surprisingly though, he won't be simply relaxing. In his continuing role at the helm of the Tata trusts, he plans to continue his efforts to benefit India's poor with a focus on rural development, water conservation, and again, child nutrition. Ratan, I'm delighted that you have consented to a dialogue with me today, which will give our audience a chance to hear your thoughts on your career. And much more, would you please join me, and would you all please recognize the 2013 Cornell Entrepreneur of the Year, Ratan Tata?
Well, in about 10 weeks or so, you will retire as the chair of Tata Sons, a post, as I mentioned, you've held with great distinction since 1991. During these 20-plus years at the helm, the company has grown from a group of 84 localized companies to a modern unified and streamlined global corporation. And revenues have grown 12-fold. What were the key issues in leading such a long and sustained victory?
RATAN TATA: Thank you, David. It's difficult to define what might be a single factor. I'd say that I was very fortunate to have a change in India's economic scene. It happened about the same time that I took over as chairman. After several years of a controlled economy, India decided to open up to the world. Protection was removed. And you were able to operate on your own merit. And we had always been propagating an open economy. So I had the opportunity of doing the things that earlier would not have been permitted, entering areas that the government controlled before.
And unfortunately, some of India's enterprises spent the first four or five years of that liberalized period trying to protect protectionism. Whereas we had a sort of open field at that time to promote that. I think has been the greatest assistance I've had in making that happen.
The other way is our desire to go into high technology and to look overseas rather than India alone. We've historically been an inward-looking group. So I think put together, I was fortunate. And at the same time, the world outside was very big.
DAVID SKORTON: So in other words, you didn't do much. You just were at the right place at the right time?
RATAN TATA: That's right.
DAVID SKORTON: Yeah. Yeah, I think we pretty much buy that, don't we? Yeah. Well, maybe just by coincidence, you led Tata Sons through a period of just tremendous, tremendous growth. Undoubtedly, despite the change in the atmosphere, the change in the milieu, you had so much to do with this not only in your own company but for the entire country and for the world.
But such growth must have brought with it significant growing pains. Of all the challenges and all the things that you faced in those 20-plus years, what was the most daunting challenge? What was something that even today you remember?
RATAN TATA: I'd say there are two examples that I can think of. One is soon after I took over, I was this crusader for rationalization of the many businesses we were in. And we set out to define what might be businesses we should not be in and the prime target of that appeared to be the soaps and toiletry business that Tata had been in when in fact that my father had it for several years.
And it didn't seem to fit. We certainly washed hands and faces. But soap didn't seem to fit into anything else we were doing. And so I decided to do the most dignified sell off that I could. And then, I sold it to Unilever's, giving all the shareholders a new share, which is respected in the market, with an understanding that no employee would be touched for three years.
And the next thing I realized is that the whole world descended on me. I was the upstart that was changing employee for life. I was ungrateful. This was the beginning of the end. And the net result of that is for many years, I put aside my plan for rationalization. And we started to grow what we had.
The other example is a much more recent example, a bit of the empire striking back when we bought the last remnants of British steel and the last open automobile company, Jaguar and Land Rover. Both of them seemed to be good acquisitions that gave us a place in global steel and in automobiles.
And then, the financial economy has collapsed, in Europe particularly. We were not astrologers although we came from India. And there was no way we could know that that was going to happen a few months after we acquired them. So I gained a new title of being the most stupid person on this world to acquire these companies. How could I do that?
And while steel still suffers because of the economic situation in Europe, Jaguar and Land Rover, after going through a dip, have in fact emerged stronger than they've ever been before. And that title has been sort of rusted and put aside for the time being. And I will get out before it changes. So I think both of those at that time were fairly daunting. One of them is now quite appealing. But that, I would say, would be the two instances I can think of.
DAVID SKORTON: So turning around a small concern of 84 companies and bucking a change in the world economy, those are the most daunting challenges?
RATAN TATA: No, it's like walking and running.
DAVID SKORTON: Yeah. Amazing, amazing. I wonder if we could turn just a tiny bit to India now. As you know, you've been my guide and my guru about India. I might just tell our friends here that the first time I had a chance to visit under Ratan's kind stewardship, he said, well, David, I got you a little audience with the prime minister. And I was thinking a what we call a grip and grin in the business. And he said, well, sort of. It's an hour-and-a-half state lunch.
And that doesn't happen to me that often [? to ?] heads of state. And in that hour and a half that I had the honor of enjoying that lunch with Manmohan Singh, it became clear that he looked to you personally and to the Tata Sons as not the recipient of the change in the way of Indian economic policy that he himself had so much to do with when he was finance minister but quite the opposite. He viewed you as a moving force. And what role do you believe-- I know you won't talk about yourself. But what role do you believe Tata Sons played in the resurgence of the Indian economy in those years that you were describing?
RATAN TATA: Well, as I said earlier, while several groups were trying to protect or bring back protectionism, we were kind of the flag wavers of what he had tried to do economically in opening up the economy. So first of all, he viewed us as allies. Second, I think we walked the talk in terms of it wasn't superficial. We were really trying to grow in an open environment. We did several things that bolstered what he was trying to do economically.
So Manmohan Singh has been a friend in many ways. I'm not close to him. I respect him enormously. And the one thing we have prided ourselves on has been the fact that we have not succumbed to a fabric of loss of integrity. We have held the values and the integrity of the group. And certainly, that's something that Manmohan Singh is known for. There may be many criticisms of what he has or has done or has not done. Integrity has not been an issue. And I think he's respected us for that.
He perhaps has not been able to do as much on the cleaning up of a very pervasive environment in terms of crony capitalism, et cetera. But I think his view and ours is very similar. I need to also say that he doesn't often meet a university president for lunch.
And the fact that he met you and the fact that I think the meeting was a very productive meeting-- the meeting was. Maybe what followed was not. But I think he gained enormously from meeting a president who didn't spend his time talking about the great things that Cornell did but actually equated with him quite seriously. And I could have been tremendously embarrassed by that lunch. But [? I was ?] tremendously proud.
DAVID SKORTON: It's so nice of you. Our wonderful dean of the college of agriculture and life sciences is here. Kathryn Boor is somewhere. Oh, there she is. So I just want you to know, Kathryn. What happened was we walked in. I clumsily didn't know where the seat of honor was. Manmohan Singh showed me where we sat down. We got our napkins on our laps. And he said, President Skorton, what's the way forward for Indian agriculture?
And of course, being a cardiologist, I was the best person to help [INAUDIBLE]. Now, as you know by being a member of the board of trustees, a post for which I can never thank you enough for giving us the time and the wisdom and the vision to help guide the university through this similar period of financial duress, as you know, one of the things that the board has charged Vice President Mary Opperman and me and others with is to develop succession planning for the university leadership, which we are actually due to report to the board in December.
Given your plans to step down in about 10 weeks as the chair, I was thinking about your charge to us as a trustee and thinking that you must have just gone through such a process in the last year or two of succession planning. In general, what can a CEO, a university president, what can a leader do to prepare a company for successful transitions of leadership either at the top spot or other spots? What can we do, those of us who are leaders, to be better succession planners?
RATAN TATA: David, I don't know. I can only say that in our case, I tried to define a successor and failed. Fortunately, the board extended the retirement age by five years, which gave me a little more time to find a successor. We set up a search committee that I stayed away from and went through a process of defining likely successors.
We decided that Tata now had 70% of the revenue that came from overseas. So we also looked at people who lived abroad, not Indians alone. But the committee finally decided that the successor should be Indian. And they found a person, Mr. Cyrus Mistry, who has in fact been a director of Tata Sons for some time and a major personal shareholder to be my successor.
And I've interacted with him since last November. And it has been a period of great satisfaction in knowing that he shares the same values. He has much the same first inclination. And I feel that the company would be in very safe hands as it moves into a new era.
DAVID SKORTON: And as an aside, I thank you for the graciousness of introducing me to Mr. Mistry some months ago. To change gears a little bit again, I mentioned the criteria earlier for Entrepreneur of the Year. And some people identify entrepreneurship with startups, relatively small, contained companies.
But it seems to me, and many of us here, that you've brought entrepreneurial, nimble, agile thinking, innovative approach is to what by any measure would have been considered a very, very large conglomerate right from the beginning of your stewardship. What are the key challenges to thinking entrepreneurially when you're starting with an already large stage?
RATAN TATA: In the Indian context, where gray hair and years of experience seemed to connote knowledge rather than merit, however young a person may be, the thing I found that was most offensive to me as I worked through Tata was every time you had an idea, we've heard you, but this is the way we've been doing it for 25 years. And that's the way to go.
So when I became chairman, I publicly mutilated that theory to say that we encourage people to challenge the unchallenged and to challenge everything that was considered to be fixed. The younger part of Tata I think rallied. The elder part of Tata has considered this to be another quirk.
The one thing it did do is it encouraged people to come out in the open and express a view. And many of those were taken. And the one thing I would say that I have learned is that some of the best ideas have come from the strangest places. I would say not the strangest place but the most unexpected places.
And they have been good, sound ideas. Some of them have been held within people for a period of time. And I feel very happy that I've been able to unleash this because it has helped us to be open and more nimble-footed than we had ever been.
DAVID SKORTON: Well, it's like you to credit others. But I have learned that from you over the years that I've had a chance to study how you've done things. And we've had some issues in our campus from time to time. And I, too, have learned the importance of listening to people even without enormous titles.
I do think the gray hair bit is pretty much right on though in terms of wisdom. But one thing I--
RATAN TATA: I said that because we both share the same attribute or affliction.
DAVID SKORTON: Yeah, the only thing is you have quite a bit of hair left to be gray. One thing that's funny though, at a university, a place like Cornell, we never hear people saying things like, well, we've done it that way for a long time. It just doesn't happen, you know? Yeah, OK. Yes.
So once again, I want to switch gears. You mentioned and observed of course this almost incredibly challenging volatile and unpredictable period in the worldwide economy that we're facing, where it's almost impossible to know what might happen next. And my mind goes to the rank and file workers in our organizations who have less reserve financially, fewer options, and have to be thought about perhaps even more seriously at a time like this.
And thinking about your career, you've been known for a long, long time as a champion of sustainable development, corporate social responsibility. But in addition to the outward-looking role, you and Tata Sons have been very long known as looking inward to the employees and understanding that the better they do, the better the company does.
Why has it been so important to you and to your predecessors in the role to care so much about your employees and make them such a high priority? As I mentioned, the year that we had our first matriculants at Cornell in 1868, you were already doing these kind of things, your predecessors. How did this come to be that it was such a high priority?
RATAN TATA: I don't know how it came to be. But it started with the founder, who decided that he would make his employees shareholders in some cases-- and this is in the 1800s-- that he would treat them like colleagues, and that he would look after the interests of the employee and their families.
So things like maternity leave and things of that nature were created long before they became law. The five-day week or the weekly off also, those kinds of things, a mixture of compassion that comes from treating people as equals in a country that was very feudal happened at that time. And then, he and his two sons left everything they had in these charitable trusts.
So they really gave this into from their employees only into something that became a national effort. And it's been like that ever since all of us that exists that our family members have are salaried people with no vested interests in the equity of the company.
And oddly enough in India, those businesses that were family-run have since been carved up as each generation passed because a generation wanted this part to be carved off to their children and that part to this brother's children. And Tata has remained intact. And I think a great part of that has been there has been no vested interest in carving it up because we never owned it in the first place.
DAVID SKORTON: That's fascinating.
RATAN TATA: My predecessor used to say constantly that we were trustees of the stakeholders. And that was the job we had.
DAVID SKORTON: I wish we all could think about that lesson every morning as we get up. We would be better stewards of our own organizations. At least I could learn from that. How clearly I remember, if you'll permit me to embarrass you, when I was first learning about you and reading about you, I happened to be talking to a professional, a staff member at Cornell, whose grandparents were helped as employees of one of the companies a couple of generations ago by that kind of thinking.
And this gentleman told me. And you very graciously agreed. You may not remember to meet him for a few seconds before the excitement of a trustee meeting. And he told me for a couple of years afterwards that it closed an emotional loop for him to meet the current steward of a company who thought of themselves as stewards for the workers. So it's a wonderful, wonderful explanation.
Talk a little bit about your career at Cornell. And don't worry. I'm not going to share the many things that were considered in voting you Entrepreneur of the Year but were ignored in order to move forward with it. Because after all, you were an undergraduate at Cornell. And we know. We just know.
But I'm thinking about your Cornell preparation and your eventual ascension to the level you reached. Now, I'm going to say this gently lest I offend architecture graduates in the audience. But one might not normally associate a degree in architecture with preparation for a lifetime of leadership on the international business stage.
So what aspects of your Cornell education had the most important impact on you over the course of your career? And please don't tell me it was your buddies in the fraternity house. Please make it seem like something about the curriculum had a positive effect. It would really be great if you could do that.
RATAN TATA: I think I once mentioned to you, David, my first exposure to Cornell was a frightening one.
DAVID SKORTON: You did tell me that.
RATAN TATA: First into the United States, where I spent a few-- maybe a semester preparing for my college board exams, having gone to MIT because I started as an engineer, on a very rainy horrible day and then coming for an interview in Ithaca, which deceptively was a beautiful spring day.
And so having been admitted to Cornell with great gusto, I arrived there on a horribly gloomy, cold, rainy day.
DAVID SKORTON: Hard to imagine.
RATAN TATA: And I was part of a huge student body, which I'd never been. I think our freshman class was 2000 people. The first meeting that we attended, where we had to wear red hats, an announcement was made. You look on your left and you're right. One of the people on either side of you won't be there when you graduate.
Very well said. But it excluded you because suddenly the pressure was you might not be there. So it was a new paradigm for me in terms of work, what was expected, et cetera. But the anonymity that Cornell provided, I would say, would be one quick lesson I had.
The best thing that happened to me was having an education from Cornell. Architecture was dealing with people and solving problems. And perhaps in a surprising way, it equipped me very well for what I ended up doing.
It involved budgets. It involved finding solutions where people were involved and how they circulated how they used space, et cetera, and visualizing a project as it was meant to be. And to plug the College of Architecture, I think it's an exceedingly good but surprising way to be trained to go into general management because you're dealing with people and solving problems.
DAVID SKORTON: Thank you for trying to get me out of trouble on that architecture thing. I'm going to go off script for a second just to share something with the audience. You may not know that Ratan is a very accomplished pilot with some-- I don't want to get this wrong-- 7,500 hours to your credit?
RATAN TATA: Not quite.
DAVID SKORTON: 7200? Close enough for a university president.
RATAN TATA: It's like my age. You've broken the barrier on that. But maybe my [? way ?] through my dimensions. The number of hours I have, you'll have to do more research on.
DAVID SKORTON: Well, as I was about to tell them before you interrupted me, when I was learning about Ratan's early days in hopes of digging something up that might be useful-- part of a university president's job is to get some dirt on every trustee so that in a clinch you know you can work your way through it.
Anyhow, it turns out I understand that you sometimes took your fellow Cornellians when you were an undergraduate up for a spin in a plane and maybe scared them a little bit just for fun. So lest everybody think that butter wouldn't melt in your mouth, tell them a little bit what you did? And why would you do such a thing?
RATAN TATA: Well, you had to take your mind off the constant pressure that you had in the classroom. And I always was interested in aviation. So I flew at Cornell. I got my license there. And once you had this piece of paper, you thought you had the ability to be better than your colleagues. So it was always a question of getting your classmates up for a ride to look at the campus from the air and to share your expenses. That came after the flight.
And so we would constantly go up. And once in a way, particularly when a classmate was apprehensive, you would do a stall or a steep turn. It's quite safe. But on one occasion, a passenger got sick right over my shoulder. And then, both the smell and the mess in the plane became a real challenge to get on the ground without getting sick yourself.
DAVID SKORTON: Well, you may be happy to know that through a great personal effort of the current chair of the board, Robert Harrison, we have expunged your record at Cornell of all of these things. So in looking back now, it looks like you never did anything like that.
You mentioned earlier about solving problems. And the theme of this conference, as you know, is breaking apart problems to find better solutions. Of the many, many problems that you had to break apart and for which you had to look for solutions over the years, what problem or problems might you identify that you're most pleased with the solutions that you came up with?
RATAN TATA: Perhaps the most rewarding has been the creation of the Nano. As you said, it commenced with looking at families of four traveling on scooters, little kids, wife, et cetera, and seeing a couple of families spread all over the road because they slipped, and asking oneself, was there a safer or better way for a family to travel in?
After spending a lot of time trying to determine whether scooter or a two-wheeler could be made safer, then deciding that let's try to make a car, which would give them all-weather driving and could take a family of four or five. And going through that exercise and not giving in to urges to let the costs go up and actually producing a car that was under the given price, $2,500, when it happened, it was extremely rewarding. I would say almost emotionally unsettling thing the day we launched the car because no one-- certainly, I didn't expect the kind of response that we got the day we did this. So I'd say by far that would be the most rewarding thing.
DAVID SKORTON: Having seen those scenes on scooters myself in not just India but many other parts of the developing world, it's wonderful that you had the vision and had the wherewithal and discipline to see it through. It was a big thrill when you delivered a couple of Nanos for the Johnson Museum for us to take apart and view as a work of art and a work of design.
I want to turn now just for a moment to the corporate philanthropic and corporate responsibility aspects of what you have done. Recently, your counterpart at the Rockefeller Foundation, my colleague Judith Rodin, discussed the need for philanthropy to help individuals, institutions, and cultures. And I'm quoting here, "develop greater resiliency so that they can better endure the increasingly large shocks that economic and technological disruptions are creating." Do you agree with President Rodin in that regard? And if so, what steps do you see as important to address these issues through philanthropic methods?
RATAN TATA: Well, I think we have several fundamental [? self-points ?] in India which we need to address if we're going to have underlying prosperity. One is the availability of drinking water and water per se. The other is nutrition. The third perhaps is improved agriculture and agricultural produce.
Some of these are things that a private party can't do. They're too big for them to be undertaken. Well, we could showcase what can be done if you made these inputs in a series of places. And what we have tried to do is do just that and transform small communities into prosperous areas.
And when you see prosperity coming to that, it transforms that area and the people of that area in terms of aspiration for hygiene, the quest for better facilities, et cetera, because they can reach out and enjoy them. This is something that we would like to do more of. And this could indeed change the face of India over a period of time.
The real place that this should be done is with the government. But the government has priorities of their own. And I think there's a place for private enterprise to do something not philanthropically alone, even corporations.
DAVID SKORTON: Well, you certainly showed the way in many, many, many instances. I wonder if we could turn back for a moment to the strategy of acquisitions that you promulgated so successfully. And you led Tata Sons through a period of such striking and courageous and bold acquisitions of Tetley Tea, Daewoo commercial vehicles, the Pierre Hotel in New York. Finally, I figured out how it is you always get a nice suite at the Pierre Hotel.
And in particular, analysts just in the south part of Manhattan are raving about the turnaround that you've orchestrated with Jaguar and Land Rover, as was mentioned. What are the key factors? What was it that led you to think so strongly about the strategy of acquisitions, something that had not been done as aggressively and successfully till your time?
RATAN TATA: I think one of the driving forces of acquisitions overseas was the fact that in some of our businesses, we had massive market shares, 60%, 65%. And as India opened up, my view was how much more could we grow in those areas in India? So were there areas which we could grow into outside India that provided us with a good fit, either a gap in our product range or a technology that we wanted, et cetera?
It was never meant to be so heavily Western-oriented, Western Europe-oriented. That perhaps is a bit of an accident. What we had at that time thought was that we could take the attributes we had and transport them to Asia, Indonesia, Malaysia, Africa.
But those countries had internationalization plans of their own. And many of them looked West also. And we didn't fall into the area that they consider to be a giver of technology or a provider of goods. And the economic conditions of Western Europe led certain companies to be available and looking for people who would acquire them.
In each case, it was a leap of faith because the acquisition was bigger than the parent. The steel company was bigger than what we had in India. And certainly, Jaguar and Land Rover was larger than our passenger car activity in India. So it was then a question of being either bold or stupid to decide that, well, let's take it.
And then, there were cultural problems after we took them because then the question was, what are they going to teach us? How are they going to operate with us? And that was, in fact, the biggest challenge, bigger than the issue taking them.
DAVID SKORTON: Just fascinating. I haven't had a chance to tell you that I'm working on a very short essay from the point of view of higher education in the United States about the strategic importance of India and thinking about the India Institute of Science and other institutions that I've gotten to know through your mentorship.
But as I was looking at the strategic importance of India a little more broadly for the preface to this article, besides talking about the population and the culture and so on, one of the things that is apparent through the period of economic growth is the global importance of certain Indian companies, certain Indian conglomerates or individual companies. So how important is it, do you think, not for the future of India but for the future of Tata Sons, how important do you think it is for Tata Sons to take its place on the global stage as a powerful international brand, how important for the company?
RATAN TATA: The way we're structured, what we have is a single brand. We don't have a single brand in terms of all our companies. And therefore, taking a global position in the global stage would be limited to different companies in different businesses.
I think we could and we should in the steel industry. And we should in automobiles. And we should in-- maybe not so nice a word in today's context-- in software. I think in all those areas, India has the attributes of playing a major role if it has the right scale and size to undertake those sectors of industry.
In many other sectors, I think the availability of human capital is an important issue, which by and large, we don't promote. And what we need is the ties with institutions and institutions of higher learning like Cornell, where we should exchange or make possible an exchange of students and give them an opportunity to be exposed to what is a--
I don't think anybody could understand what I'm saying unless they come from a place like India in terms of the enormous difference in the way education is undertaken and how knowledge is transferred and how, in fact, innovation is created. Equality is total, as it is in the United States.
And I think the exchange of educational process is something that's usually not talked about because it's such a small part of India that actually has a chance to be educated here. And I think if we did more of that and could do more of that, there would be an even greater move in India to be on the global stage.
DAVID SKORTON: Well, as you know, we at Cornell so much want to work with you on that. The Tata scholars have been a terrific first step at the undergraduate level. One last question before the part of this I know you hate the most, which is me giving you the award.
But the issue of the next stage for you as being at the helm of the trust, why do you see it-- do you, and if so, why do you see it as important for entrepreneurs to apply entrepreneurial kind of thinking and entrepreneurial approaches to risk to philanthropic endeavors as they do to business? Because you have acted that way in the way-- bold things you have done in India and philanthropy have been high-need, high-risk, high-gain ventures in philanthropy. Why is it important to do it that way?
RATAN TATA: I think it's the same issue that I mentioned in business. Philanthropy has been run in India in a tremendously traditional manner. If I might use another word, it's charity, hand-outs initially to the less beneficial people. It has never tried to enhance the quality of life of the people.
And I think that involves infusion of technology, an entrepreneurial view, and importantly, trying to make the recipient and entrepreneur to make his own destiny. You can't have a country living on handouts. You can't have a country that prospers on just being subsidized.
What you have to do is to encourage entrepreneurship to exist for which I think you have to come forward as an entrepreneur. And you have to share the risk. And you have to allow them to share in the reward. And therefore, there's an opportunity in philanthropy to do things differently and to in fact always look at enhancing the quality of life of the people that you're trying to reach. And that, I think, is what is driving me now to create a new type of philanthropy which looks at prosperity and not at sustenance.
DAVID SKORTON: Well, as has been the case for many of our prior Entrepreneurs of the Year, I for one am looking forward with great anticipation and joy to the next phase of accomplishment for Ratan Tata. Would you join me in recognizing Ratan Tata?
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A conversation between Cornell President David Skorton and Ratan Tata, Cornell Entrepreneur of the Year 2013.