Tuesday, October 4, 2005

Factor India globally

cyber age: ND Batra: From The Statesman

Advantage India
High quality guaranteed

India’s $700 billion economy, growing at a leisurely pace of seven per cent, is a small potato for a billion people, even if you add to it another $ 350 billion of the shadow economy. India needs a sustained growth of eight per cent or more to be able to absorb a projected 75 to 100 million-strong labour force during the next 10 years, apart from lifting the 25 per cent people still below the officially defined poverty line.

The world has come to know India’s cognoscenti, the knowledge class, its comparatively transparent legal system, and the substantial number of graduates and post-graduates coming out of its science, technology and management schools.

Even Asian telecom giants like Flextronics and Kyocera, are beginning to look at India with refreshing eyes, following the footsteps of European and US multinationals such as Motorola, Daimler-Benz, Pfizer, and GE. It seems the macroeconomic environment for doing business in India is improving. Girja Pande, Asia-Pacific director of Tata Consultancy Services was quoted in Reuters as saying, “People come to India for cost (savings) and stay for quality.”

I don’t know how widespread is this sentiment abroad about the quality of India’s BPO, but if this could be turned into a mission statement for corporate India, certainly the country has a great economic future.

The expectation is that India would be another China, not a replacement, mind you, but one more driving engine for the world economy. China has been providing a well-trained and disciplined work force to attract technology transfer and FDI from Japan, Taiwan and Hong Kong, helping it to grow at a nine per cent annual rate during the last two decades. China has the good fortune of being surrounded by industrialised and wealthy countries, which have been providing it with many growth opportunities. In contrast, India is surrby some of the most conflict ridden and failing states.

But India must overcome and find another route to rapid economic growth. Probably a most amazing piece of news came from Europe that German publisher Springer Science + Business Media plans to publish works in German in India, apart from expanding its existing English language publishing.

India has been known for its excellent editorial skills in English but to expand its grasp to other European languages is a great leap. Reuters too has moved some of its editorial functions to India. If the trend continues, India might emerge as a global publishing hub. Because India is a multi-lingual nation, with a deep and widespread respect for learning and the learned, Indians pick up foreign languages much more quickly than other people.

The world has yet to be aware of India’s linguistic advantage. Besides English, there are millions of Indians with a superb command of French, Portuguese, Spanish, Arabic and Farsi. For Springer Science, India has come to play an important strategic role. The success of the company’s English language publishing in India has led to its increased confidence that German language publishing too could be done in India, which shows how big is the potential for the outsourcing of publishing in India from the USA, Germany, England and may be France.

Echoing Pande’s observation — attracting the foreign customer with cost saving, but keeping him with high quality — Haank said: “It is undeniable that the financial attractiveness played a role in coming to India, but this is not unique to India. For the type of work we do, India offers not only a highly educated, but also industrious work force.”

According to a recent IMF, twice-yearly World Economic Outlook report, “If India continues to embrace globalisation and reform, Indian imports could increasingly operate as a driver of global growth as it is one of a handful of economies forecast to have a growing working-age population over the next 10 years.” It is expected that in the next five years, Indian exports would double and imports would triple, which would impact global economic growth for the simple reason that no single country can grow without triggering growth elsewhere. Economic growth is not a zero-sum game.

So what can India do to make itself attractive for boosting regional and global trade links? Meet the energy challenge because rapid growth, “rising incomes and accompanying urbanisation and industrialisation” will put tremendous pressure on “a tight global energy market,” as the IMF report said. The situation could become more dangerous when oil producing countries like Iran try to tie up business deals not with supply-and-demand but on a quid pro quo basis in international politics.

India must break its economic insularity. At present it accounts for just 2.5 per cent global trade compared to 10 per cent in case of China. Barriers are many — high tariffs, limits on inward investment, restrictive labour laws, strangling red tape and poor infrastructure — but not insurmountable.

More than anything else, India needs fiscal discipline, including the control of its runway deficit (eight per cent of GDP); and more importantly streamlining state finances.

India needs to engage in a new kind of public diplomacy that should present a vision that knowledge-based industries such as auto design, pharmaceutical research, healthcare, information technology, financial and accounting services, publishing and back office legal research are not only cost effective but they are of the highest quality.

Corporate India should guarantee quality in no uncertain terms: Money back if not satisfied.


  1. The study of the genesis of capitalism in America will reveal the not unsubstantial contribution of the preaching of the Puritan fathers in the New England area which was later on codified by that great sage Benjamin Franklin as ‘virtue and proficiency’. By virtue he meant punctuality, frugality and honesty. These twin pillars of virtue and proficiency, if I reckon rightly, made America what it is today [never mind if this concept was lampooned elsewhere as ‘they make tallow out of cattle and money out of men’].

    India in spite of all her spiritual background propounded by her forest dwelling ascetics lacks the ethos that fosters the growth of the virtues mentioned. Scam chasing scam in regular succession, politicians as well as central ministers playing hide and seek with the law and law enforcers, sham universities spouting like mushrooms and many more unsavoury facts have wrought havoc with our body politic. I am not speaking about Bihar in particular which hangs like some obscene pudendum on our national corpus but about our whole country. I am not aware what is the story in China which accounts for 10 percent of the world trade and how transparent its legal system is; but can India ever make an impact if she allows these malignant sores to prey on her entrails? Can corporate India be ever aloof from these all entangling tentacles? How many palms have to be greased before a project can be undertaken?

    Fiscal discipline, for that matter any form of discipline, requires the ability to say no to an easy life and easy money. ‘Man must earn his daily bread by the sweat of his brow’ as it is said, should be ingrained in the minds of our youth before they venture out to take on the world.
    Mere proficiency in the IT, ITES and publishing industry will not suffice in the long term.

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