Multi Billion Dollar Investments in India

[Sandeep]

Yesterday Bill Gates announced that Microsoft would be investing 1.7 Billion dollars in Indian market. And this has come after SEMI India (Chip Manufacturing company) in partnership with AMD announced a 3 billion dollar investments in India, Intel announced a billion dollar and CISCO 1.1 billion dollar investments. India is rocking

But I wonder where from these hardware companies recruite people from? Indian universities doesn't have a degree which deals with electronic manufacturing, especially process side. Next few years I guess anyone and everyone with Electronic process knowleldge will get a job in India . Malaysia already have a good infrastructure for hardware parks, China ofcourse is a hardware giant. wonder why these companies got attracted to India?

Oneway I am happy, but I thought Infosys, Wipro or TCS had a good chance to compete with Microsoft if at all they decide to try their hand in operating systems. Man power is cheaper and we could have invested a good amount on R&D . But now with Microsoft also planning full fledged R&D in India, I guess we lost the advantage we had.

[Dhruv]

Labour in India is the cheapest. It's just that the infrastructure sucks so transportation kills a lot of the profit and adds a huge cost. PK should be able to speak at length about the lack of infrastructure in India.

Also the amounts of money you are talking about are good signs but still small in terms of absolute numbers when it somes to economies the size of say India or China esp as they will be over time rather than yearly investments. A good start but nowhere near enough.

[Sandeep]

PK should be able to speak at length about the lack of infrastructure in India.

Lack of infrastructure was a problem, is it the same even today? I think India is taking big steps in improving infrastructure.

Yeah, as you said it is a good start. Someone has to open up the market (Hardware), and I am glad CISCO/SEMI/INTEL are planning to do that. Somehow India wasn't able to attract more investments in this field.

And with companies like CISCO/MS investing in India, it shouldn't take much time for their competitors to announce their plans in India. Just like how Intel did as soon as AMD announced a 3 billion dollar expansion plans. I guess no one wants to loose a potential market to their competitor.

[Dhruv]

By infrastructure , I mean roads,rails and stuff. Still a huge problem compared to say China which is our main competitor. yes in China the stuff is really skewed to the East Coast but still that is what we are competing with.

Here is a chart form the latest version of the Business Week comparing workers across various places. Don't know how accurate this is but it does show that Indian labour is more competitive. It's the lack of numbers of skilled people (yes there is lack of that despite what everyone might say and it not only PhD's that one needs but a mobile grade 12/tech qualified factory worker i.e. tech college type worker which we need) and more importantly the lack of cheap/reliable transport. Someone once said, a year or so ago, it costs as much to transport a container 300kms in India as it does from India to the Gulf.

Anyway here is the BW link. http://www.businessweek.com/magazine/co ... 963028.htm

[PKBasu]

The biggest infrastructure bottleneck in India (and one that is beginning to add hugely to the cost of doing business in India) is power. The November 2003 Electricity Act was an excellent start in theory, but it isn't being implemented -- and power therefore remains a massive bottleneck, poorly provided and costing too much.
Highways have improved greatly, but are not really world-class (unlike China's east coast, or the whole of Malaysia and South Africa). Ports have improved dramatically, but are still far less efficient that the world-leading ports of Singapore, Hong Kong and even PTP in Malaysia. Our airports remain the worst in Asia (even Ho Chi Minh City's one is better than any Indian international airport!). The only area of infrastructure we are doing well at is telecommunications (particularly cellular, but also data). Thank goodness, as that is crucial to the IT sector's future.

[genius]

Oneway I am happy, but I thought Infosys, Wipro or TCS had a good chance to compete with Microsoft if at all they decide to try their hand in operating systems. Man power is cheaper and we could have invested a good amount on R&D . But now with Microsoft also planning full fledged R&D in India, I guess we lost the advantage we had.

TCS,wipro or infy are essentially services companies,though tcs and wipro had come with a few customised products.I am not sure how much high end work they do, if at all and how much topnotch research goes in India if at all.Most of the work is average /routine outsourced work done for comparative advantage ,hardly the 'changing world' sort of tasks that inspired bill gates or steve jobs and the best minds in those companies eventually start their own companies either due to frustration or ambition. Their vision is to eventually become a hybrid company with both products and services.

Infact India is still far away from doing high end work that will eventually result in world class brands like say sony or samsung.

If they are going to do quality products like OS, how are they going to find the best people for it? Even when Microsoft did its projects like word or windows NT in the 80's, it hired veterans of the DEC system or word perfect,i.e people with solid and proven product development experience .
How are you going to bring these experienced people from the US to india? As for the indians who work in Microsoft ,i am not sure how many of them can help in this gigantic endeavor or if they want to return to India from Redmond. It is like expecting a nonestablished test nation with little expertise to compete with a top class test nation with lots of porven expertise and talent already avilable.

[jayakris]

I have been hearing lately that there is a bit of grassroots development of small start-ups with a lot of "can do" spirit these days - the folks who are not as interested in the mundane outsorcing rat-race, but want to do some original things to prove that Indians can indeed do bottom-up product development. Some of these are primed by people who returned from abroad too. This is all anecdotal comments from mutliple sources recently - and it surprised me to hear that. Hope some noteworthy success stories will come out from this relatively "unhyped" sector.

Jay

[forpar]

The biggest infrastructure bottleneck in India (and one that is beginning to add hugely to the cost of doing business in India) is power.

why dont we produce power from nuclear souce in India? or we already doing it?

[Dhruv]

The biggest infrastructure bottleneck in India (and one that is beginning to add hugely to the cost of doing business in India) is power.

why dont we produce power from nuclear souce in India? or we already doing it?

Already doing it but our tech is not that advanced (comparitively) as after thr Russian breakdown things slowed down. Also very little pvt. sector involvement in the nuclear sector so as with most govt. projects they take time.

[Sandeep]

Even when Microsoft did its projects like word or windows NT in the 80's, it hired veterans of the DEC system or word perfect,i.e people with solid and proven product development experience .

Microsoft was a pioneer in this aspect, so they might have had a hard time in finding people with substantial knowledge in what they are trying to do. But it is not the same today, may be you still need to pay a bit higher than an average software engineer but it would still be no where near what MS is spending on Manpower for their R&D.

It is like expecting a nonestablished test nation with little expertise to compete with a top class test nation with lots of porven expertise and talent already avilable.

An element of risk is always involved. But I still believe it would have paid rich dividends if some software companies tried their hand in high end products. Especially with the kind of technical knowledge available in India. I don't think any country in world can compete with the amount and quality of software engineers India produce. And as I said coming up with a new OS system is not a totally new wiork in today's world compared to when Bill Gates started it.

I also think, Indian companies should explore new localities and countries and start few branches there too, before USA finds them out and hand over some projects to that country. Philippines, Vietnam also has cheap labour and are english speaking countries. Should target something like that so that we don't loose our competetive edge incase some new company springs up in those areas.

[shaili]

I have never undetstood the hype around the ITO and BPO sectors. They are just 'sweatshops'! And we INdians think we are just SO great that foreign companies want to do 'business' in india. Such a warped understanding.
Of course there are exceptions and there are many capable and creative individuals in the field of IT. But as a society we just get happy with too little. Money is all that counts for most.

You people talk of infrstructure - ha! what will you do with the garbage after the 'world-class' roads are made? Supposedly educated people litter the roads too. And what about the many new flyovers in India that are already leaking or have caved in.

Unless each person takes on their civic responsibility there is no sense in 'progress' or 'development'.

[genius]

Microsoft was a pioneer in this aspect,

In what? The dominant PC OS was CP/M for some time,word was not the first word processsor.i do not remember them being pioneers except their own custom technologies like .Net

But it is not the same today,

It is the same today.You need experienced people for so many things where they can make a vital difference. what has changed?

Especially with the kind of technical knowledge available in India. I don't think any country in world can compete with the amount and quality of software engineers India produce.

Its the brilliant ideas that can snatch/overturn markets,an ability to take strategic opportunities like the one taken by Bill gates(IBM's PC OS) and wozniak/Jobs(Apple 1 and 2),Linus torvalds(linux) that matter. i don't see this trend among Indians in IT.Though NRI names like vinod khosla(co founder of sun),sabeer bhatia crop here and there on less strategic ventures.This sort of talent knows no country though americans at the moment are more likely to find one than others.

And as I said coming up with a new OS system is not a totally new wiork in today's world compared to when Bill Gates started it.

It makes it way more tougher.You not only have something new and valuable to the table but offer a decent of the extensive features that windows does already and with windows NT running into millions of code now, one can well imagine what even a copy cat effort would take.

And even that gigantic effort does not ensure success.(IBM's OS/2 lost to windows in the 80's). Developers have to switch over from their familiar/favourite systems to you.Users have to find your ideas attractive.

Which investor will stomach such a "remote success high risk long term " venture? where will any indian company find the right people for such an effort when the vax/windows/apple veterans are mainly in the US.

Any wonder that one student Linus even remotely made such an effort only as a hobby!

Should target something like that so that we don't loose our competetive edge incase some new company springs up in those areas.

Inthe long term, cost advantage would obviously go.But how to go up the techological ladder compared to say west,japan and korea who already have several innovative projects running on their soil and proven expertise of previous innovations and talents is the question.It will not be remotely easy going in as the 'upstart'.

[genius]

But as a society we just get happy with too little. Money is all that counts for most.

Its the same everywhere.Its just a few exceptional indivduals or those top companies seeking to maintain/increase their brand undertake those ventures that make a difference in technology levels.

The IT sector gave a break to India as a preferred destination for business as we had something special to offer that most others didn't.(with India's minisucule share in the global trade, you can understand that most often we are not).Not the best work maybe.But it has generated several billions of exports every year and a secure market for th next decade atleast.

[puneets]

I have never undetstood the hype around the ITO and BPO sectors.

The hype is not that misplaced. The argument about BPO etc being sweatshops is also not wholly true. People who take up jobs in call-centers don't want to make a whole career out of it...its only a transition phase for them..and they make good money (compared to Indian standards).
Before the BPO boom, what could a BSc or a BA hope to earn..nothing..zilch. The BPO boom has atleast given people a chance to earn something...and move on with their careers. Lots of people take up a call-center job, earn some money..and then opt for MBA etc.

But as a society we just get happy with too little.

I can understand your feeling, but this applies to every society. Try telling this to a college graduate with a degree, but no job.

Unless each person takes on their civic responsibility there is no sense in 'progress' or 'development'.

This will NEVER happen. Government can create an atmospehere where people are encouraged to take civic responsibilities..but it can't force them. And to create such an atmospehere, it is very important to develop infrastructure, educate the people, and provide them a sense of pride about their country.

[shaili]

that is exactly the point. people are not in this on a long term basis. its all for quick bucks. it will help in money coming into india (read dollars), but like discussed in this thread, we are not building brands.

what do graduates earn??
i think we have too many graduates. and they all want white collar jobs and 5 to 6 figure salaries. how many people go in for technical training which helps in industry. its always - college mein seat nahin mili, achha vocational kar lete hain. always a last option. even for people who cant afford college or dont have required educational background.

work in a call centre - earn money - go for MBA.... that's what you say. so basically that is again 'white collarjobs'!! countries , economies and civilisations were never built on this alone. all this bpo stuff will not last long. many countries will surpass us soon. when IT companies start more manufacturing and r&d units in india, then we will know what manpower there is in this country.