Wednesday, June 08, 2005

Feedback: 'Banglore: Hot and Hotter' by Tom Friedman

Hi Tom,

I think you are getting carried away by this Banglore thing and India’s Technology Prowess. (Thomas Friedman, New York Times, June 8 2005; ‘Banglore: Hot and Hotter’. Here are my two cents:

• I do not think it is the question of visit by an American President or Vice President to Banglore, which is the issue. They do not need to visit Banglore to address the questions which America is facing. Rather they would need to visit Silicon Valley to seethe effects of not catching with Banglore.

• I am an Indian Techee working in Valley for last 8 years; born, brought up and educated in India. I am in a Valley company where we work very closely with one of the top 3 Indian outsourcing firms. I visit Banglore every year, we have constant visitors from there to here and from Valley to Banglore. Basic impression is infrastructure is a big problem and things do not seem to move fast or at all.

• I will give one example: Silicon Valley has been in recession and bust for last 4 years. But in all those4 years I have observed that state of California has effectively executed more than $1 Billion of road and traffic improvement projects. This is when traffic is less than boom time. We know that, that was the money earmarked for these 8 to 10 project before the boom and tax was collected from people anyway. But the effect is out of 10 top traffic congestion spots in the Valley, around 8 are addressed. Some of the most notorious ones are gone. I drive on those new roads quite often so I am sure on these facts. Moreover, there are more than Billion Dollars still in pipeline for Road and other Transportation projects (BART and so on). We can criticize very much the bill that Congress is passing about Transportation, but the fact is we are talking some more serious money on the way for Valley and many other regions. (Texas is building monster road infrastructure, all by private money.) While all this is happening in Banglore, State of Karnataka and GOI could not build the Hossur road connecting Banglore city and the Electronic City (around 20 Km long, say about 15 miles max). All due to the politics and corrupt system. Every time I visit, (last 2 years I have done that and propose to do again by year end); I see the same thing. There is lot of debate about double-decker road and so on. But nothing in practice. It is total inability to solve the fundamental issues.

• What about Banglore new Airport? I am hearing that story for last decade. Totally politicized issue and still a long way. By any reckoning, it will be at least 5 years before it will be build up. Mean while during the recession time San Jose, CA spent around Quarter Billion or more to upgrade the existing Airport. They would spend more in the next 5 years.

• I just don’t see how you forget these colossal failures. In Banglore there is a plethora of governmental agencies where all the fight is going for sanctioning and executing these projects. It is regular turf war and no one wants to give up. And by the way, these agencies are not serving some kind of democratic aspiration of Banglore or around natives. You have got District Offices, Banglore Municipal Corporation, Banglore Metropolitan Development Authority, Karnataka State Government and finally Government of India. At low level, each of these agencies is a cesspool of corrupt officials fighting for their survival. Casualties are these projects.

• My comment on all this is – ‘Laxmi (the Indian Goddess of Money and Wealth) is knocking on the doors of India, but these fools will not leave their bad habits to welcome her’. If you talk with any Indian around you, that person can explain you the gravity of this statement.

• Go to Pune and other cities of Maharashtra. Check how much was electricity load shedding in the last summer. Check how much is still there. There is appalling shortage of electricity. For a decade they are stuck with this Enron project of 2000 Mega Watt. Silicon Valley undertook the public hearing for a Calpine Private Electricity generation project some 4years back, gave the clearance, sanctioned the project, the project is done and putting 600 Mega Watts of electricity into the grid. Done and move on. The whole politics of Maharashtra (the real leading state of India) has been around Enron project for the entire decade.

• While this is happening, Union Minister Maran is making rounds with Valley companies asking for projects. He is happy for getting some response from Intel. That is fine, but it is more important that these ministers do what they can change in India. Then it will not be necessary for Mr. Maran to visit Valley, but companies will come on their own to India.

• Another thing with executives of these outsourcing companies. You have to take their word with pinch of salt. You need to understand that they are in the selling mode. It is like asking benefits of Vioxx to Merck executives. They are bound to spin the topic. What is the reality? We in my company are doing the outsourcing for last two years. We made number of attempts for farming out entire projects to Banglore. Most of them do not pan out. We need constant supervision and involvement from here. Finally, the company is also adding lot of engineers here along with the Indian team. And the employee turn over and engineer skills problems are perennial at Banglore. Executives from outsourcing company have stopped talking about this talk of ‘high value’ addition to our business. And by the way, my company pays legitimate dough to this outsourcing company.

• So we need to be circumspect about all these outsourcing companies. You do not want to be a free sales man for them. Correct way would be talking to their customers about how they are happy and do they want to go to the ‘ideation’ stage. What about the serious monetary risk American companies take? As far as I know of Indian SW Industry, Indian companies do not take the risk of putting money for product development. In the end, it does not matter who develops the product; but who paid for the development and who owns the right. Except TCS and to some extent Infosys, none of these companies have spend and intent to spend lot of money on their own for product development. They all prefer to do this subcontracting. That is where they do not have to spend any money of their own. It is pure renting business. You should see how Managers and Executives from these outsourcing companies always try to push ‘engineering bodies’ on our plate at our cost! Tom, you need to visit Valley and talk with engineers in trenches, not the executives only as you did in your last visit.

• Few countries in the world make Oil for export to all over the world. But still those oil production facilities do not provide work for all Labor of those countries. How many engineers really you would need to write all Software needs all over the world? Will those engineering jobs ensure jobs for every person in India? No. The point is there is a real limit about employment generation potential of SW industry. Or rather believing that it will substantially address the employment issue in India is too simplistic. The best hope is it kick starts the process. Main employment in India will have to come from other sectors too – apart from outsourcing. That is what the current Indian PM, that great Sardar, understands. He is India’s real hope. (Many Indians are proud for the Trinity instead of Banglore - ShikhPM Dr. Sing, Muslim President Dr. Kalam and Christian Real Power Lady - Sonia in the land of Hindus.)

• So when you see the limited potential of employment due to outsourcing, add to that the competition coming from other countries – East Europe, Australia and eventually China. One Ukraine or Romania is a strong force to make the dent. English advantage is with India, no doubt; but others can overcome that. So imagine after 5 years when Wipro or Satyam or Infosys may have to reduce their work force in India. How easy will it be? Will Indian society accept job losses as smoothly as American did (and are still doing) in the last recession? With Globalization, it is just matter of time before things change in any given industry in any given country. So India will face those blues too. The real question is how well India handles those downturns. You get a simple news of potentially one weak Mansoon season (2005) and Bombay Stock Market goes down on that news. So what is needed is real strength in institutions and society to take these body blows which may come along the way.

• Many Indians and large Indian Media think (likes of Times of India, Bennett and Coleman newspapers) that the boom in India is permanent or will last for decades. It is possible. But there will be ups and down. So what you need is a measured approach. The real danger here is Media and society intellectuals do not remain critical. NYT has Tom Friedman who can fearlessly criticize American Establishment. But more and more you find Indian media in this perennial ‘celebrate mood’. I know how was Valley Media during Dot Com and subsequently. I feel American Media and Intelligentsia, just due to sheer variety, has strengths to remain critical on many occasions. It is not just my personal observation, but many of friends of my age group (30 to 40 years) who share that indeed ‘critical eye’ is absent in India. Being critical of Politics, yes that is there in Indian Media. But tomorrow’s world is more than simply traditional Politics. There are lot of other players and lot of complex issues. You want society to have an ability to see all these issues with a critical perspective. No doubt you were dot on the target when you mentioned China not having this ability. Sure, they do not. But I am afraid that Indian society as a whole may not have the adequate supply of this maturity. When you have a society where the average age is around 28 and more than half are teenagers or younger; it all suddenly look bit worrisome than the first impression.

Umesh Patil
June 9, 2005
San Jose, CA.

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