globalization forces

Headlines today in WSJ: Some in Silicon ValleyBegin to Sour on India

Labor wage-arbitrage is about to vanish for Indian firms in high-end skilled work. Companies such as Infy, WIT, SAY are facing a double whammy due to this:
a. On one hand, they have the rising labor rates
b. On the other hand, they have strong INR eating up their bottomline.

What's next?
Companies look to other offshore locations: Phillipines, Vietnam, Czech (I bet my money on it), Brazil, etc. Globalization forces are getting work from one low cost nation to another one.

Virtual work is also carried out and pretty well - check out this list/ranking of the coding market here.

What must one do?
Figure out what skills are sold at a higher rate and are untradeable. Create revenue streams in the same at places of the highest offered rates.
Along with this, always be in a nation of predictable (and preferably low) inflation.

MSFT's India research

MSFT has taken the research in India further ahead. This is one of the ways by which knowledge-oriented firms are tightly integrating their supply chains. They are having partnerships with IISc and IITs.

Check this link regarding the work they are doing. I feel that optimization of water usage in agriculture is an essential resaerch for India. Why is discussed in later parts. However, I end this segment with the conclusion that either MSFT is being a really good partner and enhancing their image in India OR MSFT seems to have struck a deal with GoI about helping India in whichever way they can for getting the GoI contracts :) In either case, it works for benefit of India. I hope the researchers/students pick up these projects and get them to the levels where by they become practical and freely available. For instance, Virtual India - a la Google Maps for India by MSFT !


About agri development in India.

As India becomes wealthier, the price of non-tradeable services and wages will increase as the general price level goes up (Balassa Samuelson effect). However, revenues from agriculture will not go up as much (they will go up a bit on count of better practices). Therefore, agriculture as an occupation will become less viable. Therefore, on cost-side, economies of scope and scale will happen ==> we will see consolidation due to smaller farmers finding it infeasible to compete. Mechanized farming will come into the picture as this consolidation happens and the fixed costs requried for mechanized farming start getting justified for the larger farmers.

Now, what must the Govt of India (GoI) do?
One of my mentors suggested that GoI must use agricultural subsidy to redeploy agri labor force to some other work.

I feel that this is an extreme step. I think that the education budget can be increased to create vocational institutes which will help ppl choose re-training themselves. If GoI does not have a budget for making the vocational institutes then they must
give monetary incentives (say, tax incentives) to private sector companies who can make provide it for profits equal to the tax incentives. If none of this happens then a social entrepreneur can take this up as a non-profit business concept.

MRO boom in India

In the current mini semester, I took a course called Marketing Applications of Data Mining (SAS was used as the mining tool) by Prof Alan Montgomery. The objective to take this course was learn analytical Marketing concepts and techniques (from an entrepreneurial and consulting perspective). That was achieved !

The course was fairly intense and demanding (with me having to provide atleast 10 hours a week). We had a presentation in which we had to present our marketing plan to the Sr. Management for a fictitious firm named Cell2Cell.

Recently, I read this article on India's possibility to become the market research hub of the world. Market Research Outsourcing or MRO is picking up pretty fast and one of the firms that's making headway is Markelytics.

I am unsure if this company wants to get bought by some other firm. However, I think, one of the Indian service providers must buy it before one of the MNCs or Google Analytics buys it. The reason to buy is that it can become one of the offerings for the consulting arms of these service provider firms and help them climb up the value-chain faster.

Besides, it can serve as an internal shared-services unit for other arms of the consulting firms. Consulting involves rigorous analytical research with hardcore data. Most of the consulting companies fail to do it and the consulting presentations are based on superficial research than an in-depth data-driven one (no matter how much they claim they dig, it ain't enough). As Dr. Montgomery says, "Data mining leads to amazing results and sometimes inexplicable ones !". However, data is data and hence, must be respected.

eSCM-SP best practices must be laid out by service providers such as Markelytics at an earlier stage to ensure that they can differentiate themselves and provide greater satisfaction than the regular vendors to the client. Clients will have to get ready with eSCM-CL as well.

india business conference

Date: 2/16
Theme: Investing in India: An Entrepreneur's Canvas
Organized by: South Asian Business Association
Experience:

The event started off with a panel's meeting. Panel included CMU's Ashish Arora, Madan Mohan from Infosys, Rick Russow from USIBC, and some others.

Citi India portfolio owner for CitiCards managed his session over Webex as his flight from NYC got cancelled. CEO of iGate, Mr. Sunil Wadhwani had come down for one of the speeches. Besides, Rick had one speech as well. Rick is remarkably aware about India's political, economic, and cultural panorama(Of course, he had coffees with most of the bureaucrats including Montek Singh Ahluwalia and deals with bureaucrats in Tamil Nadu quite often!) Last speech was by Vish Mishra, from Clearstone Venture Capital. Clearstone invests in India-centric ventures (for instance, BillDesk)

In between, there were breaks with Indian foodstuff lined up (samosas, dhoklas, etc). I was unimpressed by CMU's Indian populace who didn't participate at this event ~ doesn't talk well about the entrepreneurial spirit of the community at the school.