Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Thursday, 13 December 2018

CAPITALIZE WHAT WE ARE GOOD AT / OUR COMPETITIVE ADVANTAGE


Leveraging our Engineering Talent

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I have no quarrel with our ( about to be released ) “ Industry Policy “ which plans to raise the share of “ Manufacturing Sector “ in our GDP from the current 16 % to 25 % by 2022 ( - when GDP is targeted to reach $ 5 Trillion )


No doubt our Policy Makers must have figured out the  CAPITAL INVESTMENT  that will be needed to reach this target ( Land – Buildings – Machinery – Inventory  etc )


It would be interesting to know what “ Incremental Capital Output Ratio “did they assume for the “ Manufacturing Sector “


They might have , even some ideas on the possible SOURCES for these funds ( I hope , other than raising taxes ! )


But , if “ Manufacturing Sector “ and “ Service Sector “ were two horses in the GDP race , I would bet on the “ Service Sector “, especially from the following view-points :


·      Capital Investment per Job created “ would be much lower ( may be 10 % of  Mfg. Sector ? )

·      Jobs created would be much higher  ( may be 5 times of  Mfg sector ? )


·      Time ( to create those jobs ) would be much shorter ( months instead of years )

·      Export of “ Services “ are much easier than export of “ Goods “


·      Quality of our “ Services “ are comparable – or even better – than from other countries

·      We will , soon , have the desired quality / quantity of Internet connectivity , all over India


·      We are turning out thousands of Graduates each year though some need “ Skilling “

·      Salaries of our Engineers are 20 - 25 % of similar hires in USA – EU – Japan – UK etc



HERE IS SOME EVIDENCE :



Highlights :

Years    /  No of  MNCs   /  Centres  /  Employees  /  Total Spend ( $ Billion )

===============================================

2016    /  943   /   1208   /   343,000   /   13

2017   /  976   /    1257   /   396,000   /   15

2018   /  1005   /  1295  /    435,000   /   17

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The numbers do not include MNCs’ IT and BPM ( business process management )
Including these , Zinnov had estimated that there were 1,571 centres and 815,000 employees in 2016


Types of Industries putting up Centres ( mentioned in this article ) :

·      IT – Automation – Banks – Professional Services – Telecom – Media – Entertainment
===================================================

Context :

Brain Inc 2.0     21  Aug  2017  ]     

 

Where I wrote :

 

·        5 lakh ( 500,000 ) engineers work in “ Tech R&D firms “ in India


o  $ 22 Billion was the worth of their work in 2015-16


§  This will nearly DOUBLE to $ 40 Billion in 2020

 

Now consider this :


·         By employing 5 lakh engineers , India’s “ Tech R&D Firms “ earned $ 22 billion . That
          works to a billing of $ 44,000 per man-year of R&D ( Export of Services )


·         I presume that the “ Manpower Cost “ constitute approx. 50 % of Billing Rate ( rest
          being OVERHEADS and MARGIN )


·         Hence , Indian R&D firms must be paying an average of $ 22,000 per year to its
          employees ( approx. Rs 1.2 lakh per month )


·         As against this , both , Indian as well as American firms pay ( on an average ) ,
          $ 88,000 per year to H1 B visa holders
         


·         With this kind of “ Cost Advantage “ , is there a possibility to do better than the
          projected earnings of $ 40 billion in 2020 ?

It is high time our Policy Makers launch a new initiative ( of Export of Intellectual  Property ) , called :




During an Interview with Business Line ( 16 April 2016 ) , the then CEO of Infosys , Vishal Sikka , said :

We have to re-imagine the notion of services


In support of my belief  in the potential re-imagination of this “ Service Sector “ , allow me to quote Peter Diamandis   {  https://www.diamandis.com/blog/topic/web-3-0  ]  :


·      The Spatial Web is also giving way to “virtual company headquarters” and completely virtualized companies, where employees can work from home or any place on the planet


·      Delocalize with VR, and you can now hire anyone with Internet access ( right next door or on the other side of the planet )


·      Web 3.0 is changing the way we work, where we work and who we work with.
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13  Dec  2018






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