March 18, 2008
U.S. Gains Intellectually (and Otherwise) From Indian Immigrants
Indian nationals in the United States, including those allowed in the country on student and H-1B visas, have contributed to almost 14% of all U.S. global patents. [Source: Economic Times].
It's a benefit, extraordinarily difficult to quantify but tangible nonetheless, worth remembering as we debate caps on H-1B visas.
Posted by John at 4:54 AM | Comments (0) | TrackBackJanuary 31, 2008
Congestion in New Delhi
The number of privately-owned cars in New Delhi is rising at the rate of 1000 a day, according to this National Public Radio report.
Posted by John at 6:05 AM | Comments (0) | TrackBackJanuary 28, 2008
India's Consumer Sector Grows and Moves Beyond Necessities
McKinsey estimates that household spending in India will quadruple by 2025, creating the fifth largest consumer economy in the world. India is in twelfth position now. McKinsey believes that India's most affluent consumers will outnumber not only the comparable demographic in China but the entire current population of Australia.
The country's rising amount of aggregate disposal income will change the proportional amounts spent on necessities such as food and clothing. While 61% of Indian household spending was devoted to food and clothing in 1995, by 2025 this proportion will drop to 30%, McKinsey estimates. Spending on transportation, personal products and services, education, recreation, and health care is forecast to expand in aggregate from 22% of Indian household spending in 1995 to 52% by 2025.
See more here.
Posted by John at 4:12 AM | Comments (0) | TrackBackJanuary 26, 2008
India Facts of the Day
Shashi Tharoor, blogging from Davos, offers some very interesting facts on India:
Posted by John at 5:38 AM | Comments (0) | TrackBack--One hundred fifty of the Fortune 500 companies have established R&D operations in India.
--In 2002, more people traveled by train in one day in India than by plane in an entire year.
--Of the 300 million children in India between the ages of 6 and 16 today, 270 million will reach adulthood without the benefit of a formal education.
December 17, 2007
Chinese and Indian Scientists Welcomed Home with Open Arms
The San Diego Union-Tribune offers an extensive look at the loss of top Chinese and Indian scientists, due to visa problems and more attractive research funding offers from their homelands:
. . . One-fourth of all patents filed in the United States are filed by foreigners, [Vivek] Wadhwa said.
"Those are the people we are sending back home, where they will compete with us," he said.
Returnees are coveted employees because they bring with them the experience of working in U.S. industry.
Yu Liang Huang has the experience on both sides of the Pacific that Chinese companies wanted and U.S. companies are just now growing to appreciate. After pursuing postdoctoral work at Ohio State University, he worked for several years as a consultant to British and U.S. biotechnology companies trying to do business in China and, later, at the now-defunct San Diego bioprocessing company Egen.
Posted by John at 4:22 AM | Comments (0) | TrackBackBut when Huang decided to start his own bioprocessing company, Generon, he did it in his native China.
The company licenses early-stage compounds out of U.S. companies or research institutes or forms strategic partnerships that allow the clinical development of the drug in China. The goal is to complete early clinical testing and then bring the drug back to the lucrative U.S. market.
Labor costs in China are cheaper than in the United States, and the local and central governments of China offer monetary support, help making necessary business connections and assistance in securing licenses and other needed approvals, Huang said.
"It is hard to get to this level in the United States," the 45-year-old CEO said. "So right now we have to enjoy that advantage provided by China, and maybe later we can return to the U.S."
November 27, 2007
Indian Investment in the U.S. is Getting Significant
According to India's Economic Times, 34 firms headquartered in India, representing a wide variety of industries, have invested $6 billion in the U.S. this year alone. These firms employ 40,000 people in a wide variety of industries, including hotels,
Tata Group alone has made $2 billion of acquisitions in the U.S., employing 16,000 people, 5000 of which are local. Among the Tata holdings in this country are call centers in Milton, FL and Reno, OH which operate around the clock. Both centers are hiring, by the way.
Posted by John at 4:02 AM | Comments (0) | TrackBackNovember 26, 2007
In the Developing World, "Lifestyle Diseases" Dwarf Other Healthcare Problems
A perverse indicator of rising global incomes and declining poverty rates is the rapidly rising incidence of chronic diseases such as heart disease, strokes, and type 2 diabetes. These "lifestyle diseases" now comprise the greatest share--over 60%--of death and disability worldwide. The science journal Nature reports:
Posted by John at 6:32 AM | Comments (0) | TrackBack. . . Some 80% of chronic-disease deaths occur in low- and middle-income countries. They account for 44% of premature deaths worldwide. The number of deaths from these diseases is double the number of deaths that result from a combination of infectious diseases (including HIV/AIDS, tuberculosis and malaria), maternal and perinatal conditions, and nutritional deficiencies.
Over the coming decades the burden from CNCDs [chronic non-communicable diseases] is projected to rise particularly fast in the developing world. Without concerted action some 388 million people worldwide will die of one or more CNCDs in the next 10 years. With concerted action, we can avert at least 36 million premature deaths by 2015. Some 17 million of these prevented deaths would be among people under the age of 70 . . .
Indian Mass Migration
Posted by John at 3:40 AM | Comments (0) | TrackBackGoldman Sachs, which has published projections about the Indian economy, predicts that 31 villagers will continue to show up in an Indian city every minute over the next 43 years — 700 million people in all.
November 18, 2007
Reclaiming a Past Heritage of Technological Innovation in China and India
In the 15th century, both China and India turned away from their history of invention and innovation and began to coast. The Economist examines why:
In his book “The Lever of Riches”, Joel Mokyr settles on a simple explanation for China's technological stagnation: the country's imperial state lost interest. Its purposes were better served by continuity than by progress, and there was no rival source of power and patronage to pick up the threads it dropped. Roddam Narasimha of India's National Institute of Advanced Studies reaches a similar conclusion for India. “Up to the 18th century, the East in general was strong and prosperous, the status quo was comfortable, and there was no great internal pressure to change the global order,” he writes.
Posted by John at 12:09 PM | Comments (0) | TrackBackThat diffidence no longer hampers either state. Both China and India are now restless with technological ambition. China's government does not have the luxury of choosing between progress and stability; it cannot enjoy social peace without economic advance. For the past 30 years it has tried to turn the clock forward. By 2015 its research scientists and engineers may outnumber those of any other country. By 2020 it aims to spend a bigger share of its GDP on research and development (R&D) than the European Union.
India, for its part, surveys the future with uncharacteristic optimism. Its technological confidence has grown immeasurably thanks to the success of its software and IT firms. The heirs to Aryabhata and Brahmagupta, India's digital ambassadors have won acclaim for their mastery of ones as well as zeros. . . .
November 13, 2007
Omens of the Age in China and India
PetroChina becomes the world's first trillion dollar company, and news reports pegged India's Mukesh Ambani as the world's richest man. Not so fast, reported his company, Reliance Industries, Ambani's wealth is only $50 billion, still behind Bill Gates' estimated $63 billion net worth.
Isn't it interesting, and two omens of our times, however, that both benchmarks occur within days of each other?
Posted by John at 3:52 AM | Comments (0) | TrackBackNovember 9, 2007
This Just In: China and India to Drive Energy Demand
The World Energy Outlook 2007, produced by the International Energy Agency, offers forecasts for future energy demand which will surprise no one:
--Worldwide energy needs are expected to grow by 55% from 2005 to 2030.
--Developing economies will account for about three-quarters of this increase, with China and India alone accounting for 45% of the gain.
--Among energy sources, coal use will experience the greaterest increase, jumping 73%; China and India will account for most of this increase.
--$22 trillion in supply infrastructure spending will be required to meet worldwide energy demand by 2030.
An executive summary and the complete report can be found here.
Posted by John at 2:56 AM | Comments (0) | TrackBackSeptember 1, 2007
India: Where Everything and Its Opposite is True
Prospect has a thorough profile of India and its contradictions, where one-third of the country is illiterate, yet seven of the country's technical institutes hover at the top of global surveys and the graduates of these institutes are highly prized by employers worldwide. Outside of the United States and Russia, India has more dollar billionaires than any other country, yet 300 million Indians live on less than $1 a day.
Indeed, India is a country where "everything and its opposite is true":
. . . .For a country that was born of partition, has had a history of separatism, and that encompasses such linguistic, ethnic, social, religious and geographic variety, it is strange that even critics talk of India as if its legal unity was sufficient guarantor of its actual unity. Statistics that combine the city of Chennai, in the stable southern state of Tamil Nadu, with a village in newly constituted Jharkhand state, in eastern India, are likely to deceive as much as those that try to encompass both Denmark and Kosovo.
"India" could have been many other things—an even larger, undivided India, but also a much smaller one, or just a cluster of ancestral formations. Only the British empire and then the resolve of the leaders of the independence struggle ensured that the ancient yet amorphous idea became a single nation state. Sixty years later, there is a functional Indian state that is a rising world power despite its huge variations—but there is also a dysfunctional Indian state that cannot realise the social purpose that the idea of national citizenship is meant to provide. . . .
Read the entire article here. [Thanks to Arts & Letters Daily for the pointer.]
Posted by John at 6:56 AM | Comments (0) | TrackBackJuly 30, 2007
China the Biggest Driver of Global Growth
For the first time in modern economic history, the IMF predicts China will be the biggest contributor to global economic growth this year. Further, China, Russia, and India, taken together, will account for half of the world's growth this year. See this Times story for more details.
Posted by John at 6:51 AM | Comments (0) | TrackBack
June 24, 2007
Economic Development Subverts the Indian Status Quo
Led by the technology industry, freer enterprised based economic development in India is disrupting the caste system, reports the Wall Street Journal:
For thousands of years, advancement in India has been restricted by its caste system, which is enshrined in the country's dominant Hindu religion. While Brahmins, the highest caste, are said to stem from the mouth of Purusha, or Universal Man, Dalits were considered so impure they were left outside the structure altogether. Castes -- which often can be identified by a person's last name -- reach into every part of Indian society.
But India's rapid economic expansion -- and its booming high-tech sector -- are beginning to chip away at the historical system that reserved well-paying jobs for upper castes and menial jobs for Dalits. With annual gross-domestic-product growth exceeding 9%, companies that have hired tens of thousands of workers in recent years are looking beyond their traditional sources of employees. High-tech firms, both foreign and domestically based, are at the forefront of that search. As a result, some Dalits are rising into India's middle class. . . .
Jane Jacobs would be proud; this story reminded me of this quote of hers we used in Tidbits last year.
Posted by John at 1:46 PM | Comments (0) | TrackBackApril 26, 2007
A "Pandemic of Cancer" in Asia by 2020
Cancer death rates in Asia are likely to spike by 2020, affected as many as 7 million people a year by 2020. News-Medical.net reports:
Parkin who was speaking at the. . . Asia accounted for about half the 7 million cancer deaths worldwide in 2002, with 23 percent in China alone. . . .
According to Donald Maxwell Parkin, a senior research fellow at Oxford University in Britain, Asia already has most of the world's stomach and liver cancer cases but could well have as many as 58 percent of all cancer cases in the world by 2020, and about 65 percent of all cases by 2050.
The WHO is also warning that Asia's annual death toll from cancer, currently at about 4 million, could reach 6.4 million by 2030 if current trends continue. . . .
Once a disease more common in wealthy nations, experts now say cancer is increasingly afflicting developing countries due to tobacco and alcohol abuse, unhealthy diets and the lack of exercise; limited access to key cancer treatment technology in developing countries will worsen the situation.
Richard Horton, editor of the British medical journal Lancet has forecast a pandemic of cancer, the like of which has never been seen before. . . .
Researchers say cancer already kills more people worldwide than AIDS, tuberculosis and malaria combined. . . .
Posted by John at 8:23 AM | Comments (0) | TrackBackIndia Poised to Become World's Second Largest Steel Producer in a Decade
Based on the planned increases in steel making capacity in coming years, India may become the world's second largest steelmaker in less than a decade. Industry capacity is set to rise three-fold to 120 million tons by 2016 from today's 44 million ton capacity.
Japan, the world's number two steel producer, has 116 tons of capacity, while the U.S. is third with 98 million tons. China is the number one producer by far, with about 418 million tons of capacity.
See this article for further information.
Posted by John at 4:06 AM | Comments (0) | TrackBackApril 23, 2007
Emerging Multinationals from Developing Countries
A rising group of companies from China, India, and other emerging economies are seeking to go global because of ease of communications and travel, as well as the availability of talent for hire from consulting and other corporate advisory firms. The result is likely to be a phenomenon more complex than when Japanese or Korean companies started going multinational:
. . . [Boston Consulting Group's Harold] Sirkin says that over the long run, the entry of the new multinationals into the U.S. market will be a "bigger deal" than the previous arrival of Japanese or Korean businesses, if only because countries as big as China and India are likely to spawn many important companies. "We'll see the next Toyota coming from China and the next Samsung coming from India," he said.
Posted by John at 8:42 PM | Comments (0) | TrackBackThe new multinationals represent a far more complex phenomenon than a surge of imported products, which can be blocked or reduced by tariffs and quotas, experts say. These companies will be buying assets, and while political disputes may block some deals, as in the case of a Dubai group aiming to buy American ports or of Haier trying to buy Maytag, there does not seem to be any stopping of the broader trend.
The emerging multinationals will also be building new plants in the United States and offering services and products that are in great demand, like the IBM computers now sold by Lenovo.
But Sirkin is optimistic that the U.S. economy will continue to flourish. "There are a lot of imports coming in from China today, but what's our unemployment rate?" he said. "It isn't 43 percent. We've responded." [Source: International Herald Tribune]
April 5, 2007
Humility Will Help Young Asian Companies in Their U.S. Entry
Young Asian companies from China, India, South Korea, Singapore, and other countries are planning on entering the United States market, Brad Gambill, managing director of Innosight Asia, tells Inc.com:
From what we see, a little more than half [of young Asian companies] want to move into the U.S. market at the time they're developing their home markets. They see the U.S. as the Holy Grail, where the wealth and the prestige are. At the same time, we're beginning to see a shift where companies view their home markets as more attractive. Part of that is driven by [University of Michigan professor] C. K. Prahalad's work on what he calls the bottom of the pyramid, which has persuaded people that there's money to be made in poor and developing countries. . . .
Moreover, their attitude gives them, in general, a greater chance at success, says Gambill:
. . . Another thing you don't find among entrepreneurs in Asia is a sense of entitlement. Many companies in the U.S. just assume they're going to be successful. Asian entrepreneurs are more aware of their fragility. There's no arrogance. So they take smarter risks than Americans. They have more sense of the scarcity of resources so they do a better job managing the resources they have. They're more frugal, more focused on getting a return on investment. If you want to know what gives these companies staying power, look to humility.
Every successful (or soon to be successful) entrepreneur has a healthy ego; that's just part of the entrepreneurial DNA. Based on my own personal experience with entrepreneurs in the U.S. and in China, however, I agree with Gambill's assessment. Many of the Chinese entrepreneurs I've dealt with have a healthy sense of their limitations. Their humility--a healthy questioning of their own views--causes them to listen and be more observant of threats and opportunities, which does indeed result in "staying power".
Posted by John at 4:32 AM | Comments (0) | TrackBackMarch 22, 2007
Counting Engineers Correctly in China, India, and the U.S.
A team of Duke University researchers, including entrepreneur and educator Vivek Wadhwa, have looked at the numbers of engineers produced in the United States, China, and India. While recent press reports have focused on the gross numbers of engineering graduates (which shows China with a substantial advantage), Wadhwa and his other team members found that the reality is much more subtle.
Chinese statistics, which suggest the country graduates about half a million engineers a year vs. roughly 133,000 in the U.S., are likely apples to oranges comparisons. The national government has encouraged students to pursue engineering studies, so much so that average class sizes have increased and graduate quality, in all but China’s top universities, has declined. China, in fact, is actually suffering from a lack of top quality engineers:
Our interviews with representatives of multinational and local technology companies revealed that they felt comfortable hiring graduates from only 10 to 15 universities across the country. The list of schools varied slightly from company to company, but all of the people we talked to agreed that the quality of engineering education dropped off drastically beyond those on the list. Demand for engineers from China’s top-tier universities is high, but employers complained that supply is limited.
At the same time, China’s National Development and Reform Commission reported in 2006 that 60% of that year’s university graduates would not be able to find work. In an effort to “fight” unemployment, some universities in China’s Anhui province are refusing to grant diplomas until potential graduates show proof of employment. The Chinese Ministry of Education announced on June 12, 2006, that it would begin to slow enrollment growth in higher education to keep it more in line with expected growth in the nation’s gross domestic product. Although Chinese graduation rates will continue to increase for a few years, while the last few high-enrollment classes make their way through the university system, we expect that the numbers of engineering graduates will eventually level off and may even decline.
At the same time, Indian and Chinese students are much more likely to receive engineering PhD degrees, and China’s trends are particularly favorable. Consequently, China’s future in this regard appears very bright:
In the United States, close to 60% of engineering PhD degrees awarded annually are currently earned by foreign nationals, according to data from the American Society for Engineering Education. Indian and Chinese students are the dominant foreign student groups. Data for 2005 that we obtained from the Chinese government show that 30% of all Chinese students studying abroad returned home after their education, and various sources report that this number is steadily increasing. Our interviews with business executives in India and China confirmed this trend.
The bottom line is that China is racing ahead of the United States and India in its production of engineering and technology PhD’s and in its ability to perform basic research. India is in particularly bad shape, as it does not appear to be producing the numbers of PhD’s needed even to staff its growing universities.
As it becomes increasingly lucrative for Chinese and Indians with advanced engineering degrees to return home, the United States will suffer, as we have a deficit of natives earning advanced degrees. Over time, unless we make create more incentives for students to continue their studies and therefore develop the ability to conduct advanced research, the U.S. will fall behind, relatively speaking. It’s not a question of producing raw numbers; the issue is producing enough high quality, in the form of PhDs.
Read the entire report, “Where the Engineers Are”, by following this link.
Posted by John at 9:08 PM | Comments (0) | TrackBackMarch 20, 2007
Worldwide Mobile Subscriber Growth Overwhelming Based in Emerging Economies
Other than the United States, the world’s fastest growing mobile phone markets are all in emerging economies:
Developing countries now account for more than half of mobile subscriber growth worldwide, with the top 10 adding around 285 million new subscribers in 2006 alone.
With the exception of the U.S., the world's top 10 mobile growth markets are all in countries considered to be "emerging" in Asia/Pacific, Africa, and Latin America. . . . [Source: Unstrung.com; thanks to Smart Mobs for the pointer.]
Posted by John at 6:26 AM | Comments (0) | TrackBack
February 25, 2007
Viet Nam and India Compete with Canada for Citizens
An editorial in the Asian Pacific Post, an Asian publication in British Columbia, laments the exodus of Viet Kieu (overseas Vietnamese) and NRIs (non-resident Indians) back to their homelands. Viet Nam and India are competing for citizens they regard as significantly accretive to their economy:
Vietnam recently announced that it plans to woo the country’s 2.7-million strong diaspora.
These are mainly Viet Kieu (overseas Vietnamese) who fled during and after the war that ended in 1975 to start new lives in about 100 countries, including Canada.
To mark the recent Tet celebrations, the government threw a gala event for more than 1,000 returnees at a new convention center outside Hanoi.
President Nguyen Minh Triet also pledged that Hanoi will soon allow visa exemption for Vietnamese holding foreign passports. . . .
New Delhi acutely aware of the financial and intellectual clout their prodigal children carry has a specialised Ministry of Overseas Indian Affairs to deal with their needs.It has also permitted them to hold dual citizenship for the first time.
So far an estimated 50,000 overseas Indians have applied for the new “overseas citizen of India” status. The actual number of Indian nationals resettling in their homelands is said to be much higher. . . .
Posted by John at 5:33 AM | Comments (0) | TrackBackFebruary 24, 2007
Tata Buying Chrysler?
Stephen Richter, writing for The Globalist, speculates on what the reaction would be if Tata, India’s largest automobile manufacturer, purchased Chrysler:
MUMBAI, INDIA — Following Tata’s recent $12 billion acquisition of the former British Steel, Ratan Tata, chairman of the Tata Group and Tata Motors, announced today that his group was buying the Chrysler subsidiary from DaimlerChrysler for $1.
Dieter Zetsche, Chairman and CEO of the newly renamed Daimler Group, explained that the sales price was attractive for his group since Tata assumed all health care and pension liabilities for the U.S. employees of Chrysler. These liabilities are estimated to amount to about $20 billion.
Mr. Tata explained that he saw a lot of upward potential in the Chrysler acquisition. “We are proud to have become the owners of one of the Big Three motor companies in the United States.”
He added: “It is true that the company, as well as its two U.S.-based competitors, GM and Ford, have fallen on hard times. But I see this as the consequence of a failed product marketing and development strategy, which we are uniquely positioned to fix.”
“What top car manufacturers need in the future, given all the tremendous pressures on the global environment, is the ability to build small cars that are safe, reliable and technologically advanced,” he said. “That is the traditional strength of our group.” . . .
A leading member of the U.S. Congress, John Dingell, the Chairman of the Energy and Commerce Committee in the House of Representatives, was livid.
“I am deeply ashamed that it has come to this. I am 80 years old now — and have steadfastly and successfully fought for more than five decades to protect the interests of Michigan carmakers. This is a disgrace — one of the crown jewels of the U.S. car industry owned by a bunch of Indians. The President needs to convene the Committee on Foreign Investments in the United States immediately to ban this transaction.”
Faced with the brewing political storm in the United States, Mr. Tata, the head of the Tata Group, was unfazed.
“Success in business requires a long-term view, which is exactly what we bring to this transaction. Yes, it will take years to bail Chrysler out of its current doldrums. Hopefully, we can turn the company around faster than GM and Ford will take,” he said. “In our analysis, there is only room for two of the Big Three to survive.” . . .
Read the entire “news story of tomorrow” here; while Richter’s view of the future is open to debate, the political reaction hypothisized is almost assured, in my view. The reaction would likely be about the same as a Chinese auto company buying Chrysler.
Posted by John at 7:59 AM | Comments (0) | TrackBack
February 4, 2007
India and Milton Friedman
In the mid 1950s, the Indian Finance Ministry engaged both John Kenneth Galbraith and Milton Friedman to make economic policy recommendations for the newly independent country. Galbraith’s top down, state heavy philosophy was adopted; Galbraith went on to serve as the United States ambassador to India from 1961 to 1963.
After four decades of stagnation, the Friedman philosophy began to be quietly implemented; controls on foreign trade and investment have been loosened. The Indian economy has been on tear and is currently one of the fastest growing in the world. Ironically, today’s worry about India is expressed in this week’s Economist.
[Thanks to Division of Labour for the pointer.]
Posted by John at 10:11 AM | Comments (0) | TrackBackJanuary 31, 2007
India to Surpass China? Think Again . . .
Or so says Barbara Crossette, writing for Foreign Policy. Among the reasons she cites, China’s adult literacy rate is over 90%, while in India it’s only 61 percent. While one quarter of primary school age Indian children are not in school, in China that number is close to zero.te in China is above 90 percent. In India, it’s 61 percent. About one quarter of primary school-age Indian children are not in school. In China, the figure is practically zero.
Posted by John at 4:05 AM | Comments (0) | TrackBackJanuary 9, 2007
Indian and Chinese Millionaires Drive London Real Estate Prices
Thirty years ago, who would have forecast a headline like this one: "Millionaires from India, China drive London property prices".
Posted by John at 4:30 AM | Comments (0) | TrackBackJanuary 3, 2007
To Stay Competitive, Outsourcers Must Outsource
ComputerWorld reports that India's share of global outsourcing has fallen from 80% to 59% in recent years, as the offshore services market has become more global and more competitive. Even sizeable Indian offshore firms like Infosys and Tata Consultancy Services are outsourcing operations to other countries such as the Czech Republic and Uruguay. The need to find workers with specific IT skills, language, and cultural skills is driving this trend.
Countries benefitting from this trend include the Philippines, Central and Eastern European countries, Brazil, Canada, and Mexico.
Posted by John at 7:41 AM | Comments (0) | TrackBackDecember 7, 2006
China and India are Real "BRICs", Brazil and Russia Are Not
So says John Lloyd and Alex Turkeltaub in a Financial Times editorial:
Few concepts have gained more currency among business people and politicians in recent years than the idea of the Brics – the giant, emerging economies of Brazil, Russia, India and China, whose weight and influence is supposedly changing economic and political realities. Grouping the four, however, obscures a simple fact: while the rise of China and India represents a real shift in the power balance, Russia and Brazil are marginal economies propped up by high commodity prices. This difference has profound implications.
The fundamental difference between China and India on one hand and Russia and Brazil on the other is that the former are competing with the west for "intellectual capital" by seeking to build top-notch universities, investing in high, value-added and technologically intensive industries, and utilising successful diasporas to generate entrepreneurial activity in the mother country. Chinese officials, for example, are committed to developing 100 world-class universities, with a focus on science and engineering; India boasts one of the most dynamic information technology sectors outside the US. Both countries face challenges but they are taking the steps necessary to generate sustainable economic growth.
Conversely, say the authors, Brazil and Russia are now buoyed by high commodity prices but are not investing this windfall in long-term economic development and are not attracting top talent.
Posted by John at 3:52 AM | Comments (0) | TrackBackNovember 2, 2006
Overseas Deals by Indian and Chinese Companies Set 'to Explode'
Posted by John at 4:52 AM | Comments (0) | TrackBackRecent overseas acquisitions by Chinese and Indian companies are the "tip of a very large iceberg" driven by the rapidly changing structure of global trade, according to Mervyn Davies, the chief executive officer of Standard Chartered.
Mr Davies, in Beijing for a board meeting of the bank, said he expected a huge explosion in cross-border deals as the assets of companies in fast-growing economies were realigned with the new structure of the global economy. . . .
Trade and cross-border financing businesses, as well as mergers and acquisitions, were all increasing, pulled by growing trade between the developing countries. "Over the next 10 to 20 years, a big phenomenon in the world will be Chinese and Indian companies, once they have scale in their own markets, expanding overseas," said Mr Davies.
October 15, 2006
Give a Man a Fish, and He's Fed Today; Give Him a Cellphone, and His Business Flourishes
The Washington Post offers a look at how cellphones are helping India's fishermen and farmers improve both productivity and realized prices for their commodities:
For the millions of fishermen who work off of India's 4,350 miles of coastline, change is rare.
"The two crucial changes that have happened in my lifetime," said Jayan Kadavunkassery, 37, an Andavan crewman in a pink button-down shirt and a lungi, "are the inboard motor and the mobile phone."
Posted by John at 4:57 AM | Comments (0) | TrackBackRajan said that before he got his first cellphone a few years ago, he used to arrive at port with a load of fish and hope for the best. The wholesaler on the dock knew that Rajan's un-iced catch wouldn't last long in the fiery Indian sun. So, Rajan said, he was forced to take whatever price was offered -- without having any idea whether dealers in the next port were offering twice as much.
Now he calls several ports while he's still at sea to find the best prices, playing the dealers against one another to drive up the price.
October 12, 2006
The Power of India's Entrepreneurs Overcome the Drag of the State
Gurcharan Das, former CEO of Procter & Gamble India and author of India Unbound, writes in a Financial Times commentary that the story of India is the story of an entrepreneurial class triumphing over a "bungling state":
India today stands at the cusp of something big. Growth should not only continue, but accelerate because half the population is below the age of 25, and this can yield a demographic dividend. But it will only happen if it continues to reform. There is a vast, unfinished reform agenda. Public debt is too high, which discourages investment in needed infrastructure. The public sector is still too large (even though much smaller than China’s) and uses resources inefficiently, diminishes the potential for employment, and is a drag on growth. Severe labour laws cover only 10 per cent of workers but, once hired, they cannot be fired.
Posted by John at 4:12 AM | Comments (0) | TrackBackWhat does all this mean for international investors? Unlike China, the Indian state is not particularly friendly and businessmen do not get the red carpet treatment. In fact, they have to put up with a frustrating bureaucracy and miles of red tape. It is true that in recent years competition between the Indian states for investment has reduced some of the earlier bureaucratic irritations. While the judiciary may be slow, there is justice at the end. Corporate governance has improved amazingly. Because India opened up late, competition in the marketplace is still not severe. Investors report that, once established, the rewards are large, enduring and more certain. Some companies have said they are more likely to make profits in India than in China.
What most impresses investors, however, is India’s vibrant, positive and innovative middle class, and this contrasts with the bungling state. International companies have discovered that English-speaking Indian employees are highly skilled and their biggest asset. This is why Indian employees have been steadily climbing to the top in many multinational companies.
India’s rise is obviously good news for its people. But it is also good news for investors abroad who can benefit from a society which has triumphed over the state. This is a more durable environment for private enterprise. India’s rise teaches that rapid economic growth is attainable in a democracy if you get the policies right. Until 1991 India’s policies were wrong. India’s greatness lies in its self reliant and resilient people, who responded to the reforms. And when the state fails them today, they do not complain.
When teachers and doctors do not show up in government primary schools and health centres, they open up cheap private schools and clinics in the slums, and get on with it. The simple lesson is that open societies, free trade and multiplying connections to the global economy are the pathways to lasting prosperity.
October 10, 2006
Heart Disease More Potent in Asia than the West
Professor Mark Woodward of the University of Sydney and Professor T. H. Lam of the University of Hong Kong with some alarming comments on how much more potent strokes and cardiovascular disease are in Asia relative to the West:
Obesity was shown to have at least as great an effect on Asian populations as smoking, and the dangers of raised blood pressure were also highlighted. "Blood pressure appears to be even more of a risk factor [than in the West], and this is thought to be due to high salt intake. It is more of a problem in rural areas where there is no refrigeration and salt is used to preserve food," said Professor Woodward.
The incidence of stroke in China is four times that in Western countries, and cardiovascular disease tends to strike Asians 10 years earlier than it does their Western counterparts, the data showed.
"Heart disease is striking earlier because of the rapid rate of change of lifestyle. Another hypothesis is that a sudden increase in obesity has an even greater effect on a population that was not well nourished in the first place," said Professor Lam.
"There is no sense of urgency at government level and a very low level of awareness among the public. We are not being alarmist when we say that the fattier diet, reduction in physical activity, and smoking are extraordinarily worrying."
This dim perception among the Chinese about the severity of the problem of cardiovascular disease is further confirmed here.
Posted by John at 4:24 AM | Comments (0) | TrackBackOctober 7, 2006
China and India on Different Paths of Technological Development
The Economist, citing an OECD report, on the different paths of technological development taken by China and India:
. . . They have roughly the same population, but China spends 2.5 times as much on technology as India does. It is already the world's largest mobile-phone market, and the second-largest market for PCs. Moreover, at the end of 2005, China had around 110m internet users, compared with 51m in India; and today China has 430m mobile-phone users, versus 120m in India. The two countries are adopting technology at different paces and in different ways.
Posted by John at 4:30 AM | Comments (0) | TrackBackChina's lead is partly the result of co-ordinated government action. Centralised economies can pour resources into projects and direct the development of entire industries, something that is much harder in India's sprawling, bureaucratic democracy. For mobile phones, China established a second state-owned operator to challenge the incumbent, while India's operators remained tangled up for years in legal fights over a botched regulatory framework. China has also tried to develop its own technical standards so that it can avoid paying royalties to foreign firms for using intellectual property.
A further difference is that China's manufacturing strength means high-tech gear is available locally at low cost, whereas India must import it, explains Sacha Wunsch-Vincent of the OECD, who helped write the report. India has focused more on software and services, which can be delivered via networks without bureaucratic interference, unlike physical goods. But both Chinese and Indian firms are now setting up shop in central and eastern Europe, as a low-cost stepping-stone towards European Union countries, notes Mr Wunsch-Vincent.
October 2, 2006
A Union Puts Its Finger in the Dike on Competition for Medical Services
Paper mill worker Carl Garrett, who works for Blue Ridge Paper Products of Canton, North Carolina, was preparing to head to India for shoulder operations which would have cost $20,000. The same procedures in the United States cost $100,000. The savings to the company, amounting to $50,000, would be shared with Garrett.
Garrett's union objected, as the Christian Science Monitor reports:
Garrett, who belongs to the United Steelworkers, would have been the first union member to go overseas for medical care. But after his pioneering trip became public, the union stepped in and threatened to file an injunction to stop it.
In response, Blue Ridge Paper withdrew the proposal to send its employee to India for surgery. So two days before Garrett was to leave, he had to unpack his bags.
The union, which recently negotiated a new contract with the milk-carton factory containing healthcare provisions for its members, worried that volunteer trips overseas to receive medical care would soon become mandatory even for children and the elderly as companies seek to cut costs and increase profits. . . .
Garrett's trip was intended to be a test case for Blue Ridge Paper's plan to offer its employees and their dependents the option of seeking medical care overseas beginning in 2007. For several years, the company failed in its attempt to obtain discounts from healthcare providers for its 5,000 covered workers.
The self-insured company decided to contract with IndUShealth, a Raleigh, N.C., firm that sends patients to Indian hospitals for major savings compared with American hospital care.
Garrett quickly volunteered, mostly for the financial incentive. The operations he was scheduled to have would have cost $20,000 in India compared with about $100,000 in the US. The trip was expected to save the company $50,000, and he was being given a share of the company's total savings. Aside from not retiring in medical debt, Garrett was eager for the opportunity to see the Taj Mahal as part of a two-day tour before his procedure.
But the plan alarmed the USW. "We made it clear that if healthcare was going to be resolved, it would be resolved by modifying the system in the US, not by offshoring or exporting our own people [to receive medical care]," says union representative Stan Johnson, who stepped in to stop Garrett's trip. The USW has more than 850,000 members. . . .
The irony of the union's position is that their inflexibility is going to cost them members, and it won't save any jobs in the U.S. medical system.
[Thanks to ParaPundit for the pointer.]
Posted by John at 4:48 AM
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September 28, 2006
India Needs Management Talent from Abroad
India needs expats to fill its near term business management needs, reports the Christian Science Monitor:
According to the head of Evaluserve, India's need is great. He and others agree that India already has an abundance of domestic talent. But if it wishes to compete globally, it must have global resources - in other words, it must be fluent in the language and culture of its clients.
Posted by John at 8:51 PM | Comments (0) | TrackBackThat's where the expats come in. "We are not only an India-centric company," says Ashish Gupta, head of Evaluserve India. "So to have this mingling of cultures is very, very important to us."
In all, he estimates, India will need more than 100,000 expatriates by 2010. In 2002, the government reported that 13,000 expats were working in the country. Yet the need goes beyond language skills to the highest levels of management. "In India, most business is at the start-up stage, so we need managerial talent," says Sudhakar Balakrishnan, director of Adecco Consulting in Bangalore.
Indians themselves have filled some of this shortfall, as more are staying here rather than venturing abroad - reversing decades of brain-drain. The need for foreigners remains, however, whether it is for foreign companies establishing their presence in India or for Indian companies wanting experienced Western executives.
September 26, 2006
Coronary Disease May Cost India $236 Billion Over the Next Decade
India has over 60 million coronary patients, and over two million Indians die of coronary disease each year. The $236 billion estimated societal cost of this disease includes treatment costs and loss in productive working days.
The Hindustan Times reports further:
The WHO [World Health Organization] has warned that Indians, being genetically prone to cardiac disorders, are likely to constitute about 60 per cent of the world's cardiac patients by 2010.
Posted by John at 4:50 AM | Comments (0) | TrackBackStatistics show an alarming incidence of heart diseases among youngsters in India, said SK Gupta, senior cardiologist at the Indraprastha Apollo Hospital.
Cases of heart diseases (per 1,00,000) increased from 145 males and 126 females in 1985 to 253 males and 204 females in 2000.
"According to one estimate, more than 260 people are succumbing to the diseases for every 1,00,000 people."
Gupta said the prevalence of coronary heart diseases among the urban population was more than three times compared to the rural populace.
"Changing lifestyles, no focus on physical exercise and growing work pressure in urban setups are contributing to the spread of this menace," he added. . . .
"The situation is really grim in India. As the number of deaths is growing gradually, the country is losing productive working days, which in turn is a loss to the economy," said K Srinath Reddy, head of cardiology, All India Institute of Medical Sciences.
Upendra Kaul, chief cardiologist at the Fortis hospital, said that due to lifestyle problems nearly 10 per cent of the urban population and around three per cent in rural areas were suffering from coronary heart diseases.
"More shockingly, over 30 per cent of these patients are young (below 40 years). The disease is certainly affecting their income by eating into the productive workdays. This indirectly has a negative impact on the country's economy," Kaul said. . . .
September 13, 2006
Diabetes: "The Price of Progress"
Chronic disease quote of the day in today's New York Times story on the worldwide diabetes problem:
"Diabetes unfortunately is the price you pay for progress," said Dr. A. Ramachandran, the managing director of the M.V. Hospital for Diabetes, in Chennai (formerly Madras)."
As incomes rise in the developing world, the incidence of diabetes is as well:
In Italy or Germany or Japan, diabetes is on the rise. In Bahrain and Cambodia and Mexico — where industrialization and Western food habits have taken hold— it is rising even faster. For the world has now reached the point, according to the United Nations, where more people are overweight than undernourished.
Posted by John at 6:10 AM | Comments (0) | TrackBackDiabetes does not convey the ghastly despair of AIDS or other killers. But more people worldwide now die from chronic diseases like diabetes than from communicable diseases. And the World Health Organization expects that of the more than 350 million diabetics projected in 2025, three-fourths will inhabit the third world.
"I’m concerned for virtually every country where there’s modernization going on, because of the diabetes that follows," said Dr. Paul Zimmet, the director of the International Diabetes Institute in Melbourne, Australia. "I’m fearful of the resources ever being available to address it."
India and China are already home to more diabetics than any other country. Prevalence among adults in India is estimated about 6 percent, two-thirds of that in the United States, but the illness is traveling faster, particularly in the country’s large cities.
September 12, 2006
Asia's Demographic Time Bomb
Finance and Development, the quarterly magazine of the International Monetary Fund, devotes its latest issue entirely to global demographic issues, including an article on Asia's aging population. Notice how quickly China's old-age dependency rate, only slightly higher than that of India, Indonesia, Malaysia, and the Phillippines a few years ago, jumps by mid-century relative to those Asian neighbors:
Interestingly, China's urban population is aging most faster than that of rural areas:
Posted by John at 2:20 PM | Comments (0) | TrackBackChina's situation is unusual in several respects. Its elderly population already dwarfs those of many industrial countries. But, more important, the pace of aging in its urban centers (where about a third of the population lives) has been far greater than in the rural areas, reflecting both sustained lower fertility and higher longevity. Even with migrants to the urban areas included in the urban population, the end of the demographic dividend period may emerge much earlier in urban China (say in 2025–30) and much later in rural China (2035–40). Many critical policy issues will rest on how urban-rural differentials are addressed (across and within provinces), at both the family and the policy level. The oft-mentioned gender gap—the shortage of women relative to men (because of differences in the birth and survival rates of boys and girls)—will also be an important issue to be reckoned with in China.
September 3, 2006
India Wants a $2 Billion Medical Tourism Industry in Six Years
India hopes medical tourism will be a $2 billion industry by 2012:
Posted by John at 5:15 AM | Comments (0) | TrackBack"We are going to aggressively promote the fact that India is second to none in terms of its doctors," the tourism minister, Ambika Soni, said in Delhi. "You get treated by the best doctors, you check into the best hospitals and you save yourselves four-fifths of the cost of treatment in the U.S." [International Herald Tribune]
The Problem is Too Much Food
William Saletin, science and technology writer for Slate, in a Washington Post essay:
Kentucky Fried Chicken and Pizza Hut are spreading across the planet. Coca-Cola is in more than 200 countries. Half of McDonald's business is outside the United States. In China, animal fat intake has tripled in 20 years. By 2020, meat consumption in developing countries will grow by 106 million metric tons, outstripping growth in developed countries by a factor of more than five. Forty years ago, to afford a high-fat diet, your country needed a gross national product per capita of nearly $1,500. Now the price is half that. You no longer have to be rich to die a rich man's death.
Posted by John at 4:30 AM | Comments (0) | TrackBackSoon it'll be a poor man's death. The rich have Whole Foods, gyms and personal trainers. The poor have 7-11, Popeye's and streets unsafe for walking. When money's tight, you feed your kids at Wendy's and stock up on macaroni and cheese. At a lunch buffet, you do what your ancestors did: store all the fat you can.
That's the punch line: Technology has changed everything but us. We evolved to survive scarcity. We crave fat. We're quick to gain weight and slow to lose it. Double what you serve us; we'll double what we eat. Thanks to technology, the deprivation that made these traits useful is gone. So is the link between flavors and nutrients. The food industry can sell you sweetness without fruit, salt without protein, creaminess without milk. We can fatten and starve you at the same time.
And that's just the diet side of the equation. Before technology, adult men expended about 3,000 calories a day. Now they expend about 2,000. The folks fielding customer service calls in Bangalore are sitting at desks. Nearly everyone in China has a television set. Remember when Chinese rode bikes? In the past six years, the number of cars there has grown from 6 million to 20 million. More than one in seven Chinese has a motorized vehicle, and households with such vehicles have an obesity rate 80 percent higher than their peers. . . .
August 18, 2006
Cities in China and India Dominate the World Rankings of Smoky Cities
Statistics compiled by the World Bank reveal that cities in China and India take 18 of the top 20 spots on the world's list of most smoky cities:
Particulate matter levels top out at 177 micrograms per cubic meter of air in New Delhi. The rest of the top five include Cairo, Calcutta -- officially "Kolkata" since 1999 -- Tianjin and Chongqing, all with levels above 130 mikes per cubic meter. Guiyang, Chongqing, Tehran, and Taiyuan lead in acid-rain precursor sulfur dioxide; for this pollutant, 14 of the 20 highest rates are in Chinese cities. Milan, a bit curiously, has the ignominious lead in nitrogen dioxide levels at 248 micrograms per cubic meter -- twice the rates of Beijing and Mexico City and five times that of Bucharest.
Posted by John at 5:38 AM | Comments (0) | TrackBackBy comparison, the residents of New York and Los Angeles inhale 22 and 36 mikes of dust in each cubic meter of air. Parisians are healthier still; Paris' 12 micrograms per cubic meter is the lowest for the 110 cities in the Bank's survey. Perth, Melbourne, Stockholm, and Oslo are just a bit higher at 13 micrograms; the least-smoky developing-country city is Capetown, at 15 micrograms. (But Capetown has a high nitrogen dioxide count; the gas is pumped out by a power plant north of the city.)
The health consequences, according to the U.S. Environmental Protection Agency, are rather serious: "High particle levels, have been associated with problems such as reduced lung function and the development of chronic bronchitis and even premature death." But comparing the 2002 survey to one done in 1999 gives reason for cautious optimism. Seventy-three cities report lower levels of smoke and dust, and only 19 report higher levels. The sharpest improvements are Manila's 30 percent drop, from 60 to 42 micrograms per cubic meter, and the 20 percent drops in Paris and Mexico City. But Birmingham (in England, not Alabama) seems to have gotten smokier, reporting a jump from 17 to 26 micrograms per cubic meter. Accra likewise reports a 29 percent jump and Kuala Lumpur and Singapore 17 percent each.
[Courtesy: PPI]
July 27, 2006
Offshore Product Development Exploding in India
Offshore product development, or OPD, made up only 13 percent of the $21.2 billion earned by India’s IT services firm last year. But a report released Wednesday notes that segment has increased tenfold in the past five years and is likely to constitute a bigger chunk of India’s software development industry going forward.
In the first organized study on OPD—another is due next month from Booz Allen Hamilton—Forrester Research said product development accounted for only $300 million in sales in 2001 but will exceed $3 billion this year.
Posted by John at 9:05 AM | Comments (0) | TrackBackThe trend started in a small way with multinational companies such as Texas Instruments, Intel, Siemens, Philips, and others having their own "captive" development centers in India. When smaller firms followed their example, many failed because they could not invest large amounts in monitoring and communicating with their teams on the other side of the globe.
Sudin Apte, a senior analyst who leads Forrester’s office in India, told RedHerring.com that several midsize firms began to outsource their product development work to third-party service providers such as Wipro and TCS.
Companies offering specialized offshore product development such as Symphony Services and Persistent then sprang up to meet the growing demand, and now similar companies are thriving.
OPD will continue to grow as demand increases; not just software companies but from vertical sectors such as automotive and industrial controls that rely more on embedded software than before. These industries will depend on offshore skills to compensate for their lack of internal expertise and limited software development process capabilities, said Mr. Apte. . . .
July 2, 2006
To Continue Its Rapid Growth, India Needs More Reform in Government
Writing for Foreign Affairs, Gurcharan Das, former CEO of Procter & Gamble India and the author of India Unbound: The Social and Economic Revolution From Independence to the Global Information Age, argues that India's growth, driven by entrepreneurism, is occurring in spite of heavy state involvement in the economy. To reach it