Where’s our Trade Minister Mr Cameron?

I agree with Iain Dale (click here)on the huge ommission by Cameron on appointing a city heavyweight to the vacant International Trade Ministers’ portfolio. Surely, this isn’t the right signal to send when you’re trying to develop a commerce based foreign policy. UKTI, whilst being ably steered by Andrew Cahn, could do with a vocal champion who undertakes the role with as much gusto as Lord Digby Jones, combined with the phenomenal practical experience that Mervyn Davies brought to the role.

In any case, if you’re interested, I’ve done or am doing the following media on Dave’s visit to the motherland:

BBC Radio 5 Live with John Piennar
Hindustan Times
BBC Radio Wales Breakfast Show
Indian Express
BBC Radio 5 Live with Gaby Logan
BBC Asian Network
Reuters
BBC World Service News
Al Jazeera English
BBC Radio 5 Wake Up To Money
BBC Breakfast Business News with Simon Jack
BBC Breakfast News with Sian Williams & Bill Turnbull
BBC News 24

Any new insights you can provide are welcome.

Thanks.

Britain must adjust to being the junior partner with India, also

The following is an article that’s been carried by Reuters, written by me (http://blogs.reuters.com/great-debate-uk/2010/07/26/britain-must-adjust-to-new-relationship-with-india/)

Last week, on his first Prime Ministerial visit to the United States, David Cameron conceded that Britain was the “junior partner” in the special relationship. Next week, I fear that at the end of the much anticipated visit to India, he may yet again, have to concede that Britain is the junior partner in this ever increasing important relationship.

I attended an event some years ago in which the then Director General of the Confederation of British Industry (CBI) — Digby Jones — evangelised the need for UK Plc to embrace India, not for nostalgic or historic reasons, but to secure their survival. He explained “in the fullness of time, the past 250 years will be seen as a mere blip, an anomaly, in which India was subjugated. The future belongs to a resurgent India”.

It’s difficult to argue otherwise, just take a look at some of the statistics that stand out:

• Almost 25 percent of the world workforce will reside in India within the next 15 years. The average age of its citizens will be a youthful 29 in 2020, whereas in Western Europe the average stands at 45. India’s demographic profile provides a huge opportunity for her in the next century.

• India has a middle class larger than the entire population of the US — some 300 million residents, armed with a disposable income and looking for new avenues to spend their cash. The spectacular thing is that India’s middle class isn’t confined to its big cities or metros as they refer to them, but to far flung corners of the country in what are second and third tier cities, representing new markets — the Holy Grail as far as some of the world’s biggest fast moving consumer goods companies are concerned.

• Just today, I read a tweet from someone I follow on Twitter about how the Indian Prime Minister’s Economic Advisory Council has forecast GDP growth at 8.5 percent this year and nine percent next year. Now, compare that with all the talk of Britain having avoided a double dip recession as a result of the growth in our economy at a measly 1.1 percent.

That David Cameron understands the need to forge a stronger relationship with India is not in question. He’s made all the right noises, starting with a pro–India election manifesto culminating in the Queen highlighting her government’s desire to cosy up to the sub-continent in her first speech in the coalition era. He’s packed this visit with an unprecedented number of Cabinet Ministers signalling his intent on developing a wide-ranging cross departmental affair with India.

But the true question on the minds of crystal ball watchers, like me, is to work out whether this visit will fundamentally change the way we work with India or whether it’s just about style, something Cameron’s been accused of frequently.

In either case, in true Indian fashion, Cameron will be welcomed with open arms; and his eagerness to strengthen the bilateral relationship will be warmly reciprocated. Howeve securing the future prosperity of British jobs and industry will be on India’s terms, as the senior partner, unlike those set by the East India company some 250 years ago.

Bhopal – a sad day for justice in India

I haven’t had the opportunity to comment on Bhopal in any manner, so here I offer my quick thoughts:

More than a quarter of a century on, Indian courts deliver a verdict on the Bhopal tragedy which took over 8,000 lives within hours of a lethal gas being accidentally pumped into the air. It’s estimated that over 25,000 people have died as a result of the leak.

Only seven employees, including the Chairman of Mahindra & Mahindra who was the Chairman of Union Carbide India, have been given jail terms of a maximum of two years. They’ve been given bail and it’ll probably take years for the appeal to come to court.

I’m outraged and astonished at this verdict. If, in the context of India’s rise on the global stage versus China, people cite India’s legal system as the jewel in its crown, then I’d urge them to take a real look at this tragic situation.

There’s not much I can add to this blogpost apart from state my astonishment, disappointment and anger at the system.

What can one say apart from stating that today is a sad day for justice, a sad day for India!

Why America Needs To Start Educating Its Workforce Again

I thought this was a great article, so have copied & pasted it here for your convenience. It was written by Vivek Wadhwa on Mar 27, 2010 in Techcrunch (http://techcrunch.com/2010/03/27/why-america-needs-to-start-investing-in-its-workforce-again-2/)

Starts here:

Ask any old-time IBMer, and you will hear stories of IBM’s legendary workforce-development practices. When a manager identified a manufacturing worker with promise, the company would teach him how to dress, how to speak to clients, and how to service products. These technicians would then be trained to be computer programmers, sales reps, or product managers. IBM president Thomas Watson, Sr., considered education so important that, in 1932, he started a mini-university for employees, the Endicott schoolhouse (http://www-03.ibm.com/ibm/history/exhibits/vintage/vintage_4506VV2034.html).

That was until the ’70s. IBM still provides good training, but try getting a job there today: unless you have just the right skills, you won’t even score an interview. New recruits don’t receive the year or so of training that was common; they get a few days of orientation, after which they’re expected to be productive. It’s the same at Microsoft, Google, Apple, and almost every tech company. Unless you have the alphabet soup of technologies on your resume, you’ll get nothing more than an auto-response to your job application. If you do get hired, it’s up to you to stay current or get booted out with the first dip in sales. American corporations consider their workforce to be disposable — like ball-point pens and cigarette lighters. Gone are the days when a company would train a factory worker to become a computer programmer or offer lifelong employment. It’s all about quarterly revenue and profits now.

Large corporations do offer some employee training programs, but managers often discourage their workers from participating in them. Why invest in workers when there is no clear payback? After all, training requires time off, and costs the department money. And bosses fear that once their subordinates gain new skills, they will be more likely to jump ship — to a better-paying competitor. That’s the common belief.

But as lessons from the unlikeliest of places show, these assumptions are wrong. Workforce education increases productivity, decreases turnover, and leads to greater corporate growth. I was myself surprised to see this correlation when I researched the secrets of the success of Indian industry.

Industry pundits often tout India’s engineering-graduation rates as India’s advantage. As far back as 2002, “experts” claimed that India graduates 350,000 engineers every year. The reality is that India has a weak education system and produces far fewer engineers than is commonly believed. In 2002, it graduated 102,000 engineers. By 2006, this number had increased to 222,000 (and will be double that again, by 2011). India does have some excellent engineering schools, but at best, only half of the output of India’s engineering colleges are employable upon graduation. Yet in 2007, India’s five largest IT services companies added 120,000 engineering jobs. IBM and Accenture added 14,000 engineers each in India in the same year. That’s only seven of the hundreds of companies that hired engineers that year. Where did these engineers come from, and how is it that India’s R&D industry is booming?

My team made several trips to India during 2007 and 2008 and met the executives of dozens of leading companies to solve this puzzle. We also interviewed workers in R&D labs and reviewed the types of work they were doing. We were astonished at what we learned. I’ll explain.

During the 1960s and 1970s, the Japanese achieved major advances in manufacturing management, which led to their rise as an economic power. The Japanese economic miracle and the country’s new manufacturing skills and methods surprised western firms; but the Japanese had done this by studying, adopting, and eventually perfecting the best practices of the West itself.

My research team (at Harvard and Duke) found that India is achieving similar feats in workforce development by learning from the best practices of the western companies that have outsourced their computer systems and call centers there. It has adopted these practices and perfected them. Faced with severe talent shortages; escalating salaries; and a lagging education system, Indian industry had to adapt and has built innovative and comprehensive approaches to workforce training and management. Their initial focus was on training new recruits and filling entry-level skill gaps. Now, they are investing in constantly improving the skills and management abilities of their workers and in providing incentives for them to stay and to grow with the company.

We published a report titled “How the Disciple Became the Guru”, which details the workforce-development practices of 24 leading companies in India (note: there are many bodyshops in India that don’t invest in their people, we looked at the biggest companies). I suggest you download (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1170049) and read this, but I’ll present some highlights here of what the best Indian companies are doing right.

Recruitment: When you’re looking for a job, what’s the first thing you do? Create a good résumé. What does a good résumé tell about a person? Simply the ability to write a good résumé. The résumé doesn’t reflect skill, potential, or aptitude. Indian companies figured this out long ago. So they started putting applicants through batteries of psychometric tests and rigorous interviews. They hire for general ability and aptitude, rather than specialized domain and technical skills. Indian companies also learned to cast a wider net when looking for people with potential. Instead of hiring only from elite engineering colleges, technology companies such as Infosys, HCL, and TCS recruit from second- and third-tier colleges all across the country, and also in arts and science schools. India’s largest call-center operator, Genpact, has set up branded storefronts in 19 cities, where applicants can learn about the company and apply for a job; no resume required.

New-employee training: Companies in India assume that new recruits will have to be trained practically from scratch. So most large companies have built dedicated learning centers, and some employ hundreds of training staff. The Infosys Global Education Centre at Mysore can train 13,500 people at a time. New recruits attend a 16-week boot camp that strengthens their technical, communications, and management skills. For its arts and science recruits, TCS provides an additional three months of training. That’s right: fresh recruits get four to seven months of training before starting work.

Continuing training: Employees are typically required to participate in a wide range of education programs, including not only technical and domain training but also a wide range of soft skills and management skills encompassing training in quality processes; communication; and cultural, foreign-language and personal-effectiveness skills. It is common for companies to mandate one to four weeks of yearly training for employees. That is more than the vacation time that many Americans get. And these workers get rewarded for improving their skills: career advancement and salary increases are usually tied to the completion of training.

Companies don’t just offer online courses. They have programs of mentorship by senior executives; peer learning and knowledge sharing; and job-rotation programs. Take the example of Cadence India. Its CEO, Jaswinder Ahuja, instituted a “leaders as teachers” program under which every manager is required to spend one to two weeks teaching internal classes. Not even the CEO is exempted from this rule. Training is considered so important that the most senior executives do their part. Trainers are often the most skilled and successful employees rather than those who couldn’t cut it in customer engagements.

Managerial development: Managers are typically groomed through fast-track programs that provide management training and mentorship to highly performing employees. Preference is usually given to internal staff to fill management openings. (Yes, many companies have a policy that insiders get first dibs at management jobs). The formal training curricula include project-management, team-building, people-management, communication, coaching, and other managerial skills. On-the-job learning is provided through a variety of structured developmental experiences: job rotations, early managerial responsibilities, cross-functional projects and experiences, and intrapreneurship initiatives.

There was a time when Indian companies were so desperate to hire western-trained and -educated managers that these people would command premium salaries. Today, companies find that they can hire better talent locally. Gone are the big salaries. Returnees to India with too much management experience from abroad can have a hard time even finding a job in India.

Performance management and appraisal: Companies use ERP-like systems to manage the human-development process. Employees usually get reviewed at the end of every project. They are prescribed training if found to have weakness. (Yes, the performance review is used to guide development, rather than to protect the company from lawsuits in case they need to fire you).

Mechanisms such as 360-degree reviews (wherein you review your bosses and peers) and balanced-scorecard reviews are widely used. Managers are evaluated on a variety of non-financial measures, including employee satisfaction, attrition rates, and mentoring.

Where is the proof that these policies work?

The myth is that Indian IT companies have high turnover that is and getting worse. At a time when the Indian IT industry’s growth rates averaged a dizzying 40%, attrition rates at top Indian companies fell, or stayed in the low-teen percentages. Compare this with Silicon Valley, where a typical recruit works for a new employer for three to five years at best — which translates to a 20–33% attrition rate. (Indian IT company rates dropped even further in 2009).

Most interestingly: Indian companies learned that with better education, employees became more productive so they could afford to pay higher salaries without hurting corporate profit margins.

Additionally, the Indian R&D industry has been moving into the higher realms of innovation (http://techcrunch.com/2009/11/14/india-rd-hub-silicon-valley/). In the aerospace industry, Indian companies are designing the interiors of luxury jets, in-flight entertainment systems, collision-control / navigation-control systems, fuel-inverting controls, and other key components of jetliners for American and European corporations. In pharmaceuticals (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1143472), Indian scientists are discovering drugs and performing clinical research for nearly all of the largest multinational drug companies. In the automotive industry, Indian engineers are helping to design bodies, dashboards, and power trains for Detroit vehicle manufacturers — and creating their own innovations, such at the Tata Nano car. In telecommunications and computer networking, Indians are developing next-generation infrastructure for tomorrow’s intelligent cities. There are over a hundred thousand people in India doing this type of advanced R&D.

The Indian experience highlights what can be achieved by investing in upgrading the skills of the workforce. If workforce training can take the output of an education system as weak as India’s and turn its graduates into world-class engineers and scientists, imagine what could be done with a worker base that has received amongst the best education in the world, as is the case in the United States.

U.S. companies have long played the guru, developing and disseminating many widely adopted management and workforce practices. The time has come for the guru to learn from one of its disciples: India.

Indian IT should say it loud: “we’re Indian and we’re proud”

Threats from western economies like the US and the UK to enact legislation that protect their jobs are falling on deaf ears. The moment has passed and we’re too far down the road, so to do a u-turn would require a mammoth effort and defy logic – simply put, they’re hooked.

At least that’s the sentiment expressed by some of the IT titans that I interviewed for my newly published book that looks at the global achievements of India’s top 10 entrepreneurs. Of the top 10, N. R. Narayana Murthy, Chairman of Infosys Technologies; S. Ramadorai, Vice Chairman of TCS; and Shiv Nadar, Chairman of HCL Technologies speak frankly about where they’ve come from and what the future holds for their respective firms.

What I found spectacular was the manner in which each of them came to the fore. Shiv Nadar’s journey began in 1976 on a rooftop terrace, where he and his colleagues started HCL selling calculators – all at a time when India had a total of 250 computers! HCL began in the hardware space and later realised the need to move into software – ironic as India’s fame is based on the talent of its software engineers. His first breakthrough came courtesy of IBM, who were kicked out of India, leaving a void that Nadar’s HCL neatly capitalised on.

I describe Nadar as an opportunist, as he’s mastered the art of spotting trends to capitalise. In my view, his acquisition of a call centre in Belfast when the trade unions were kicking off demanding ‘British jobs for British people’ not only left critics dumbfounded but showed the vision which he had. Today, near-shoring is as popular as off-shoring, thanks to a trend popularised by Nadar.

Ramadorai’s strength lies in the simple fact that he knows how to scale up an organisation. Yes, he may be one of Ratan Tata’s trusted lieutenants, but his is a story about how Indian companies promote entrepreneurial thinking. Just cast your minds back to 1995, when TCS employed only 5000 people to today, where headcount stands at 120,000. Likewise with the sea change that Ram brought in, he also brought in a massive increase of revenues, which today sees them go toe to toe against the biggest and best in the industry and walk away with lucrative contracts, such as in the public sector which has long been dominated by a cosy club of vendors. Ramadorai disrupted the order of things, which he deserves credit for.

No book on Indian entrepreneurship would be complete without mention of Narayana Murthy of Infosys, who borrowed $250 from his wife to finance his equity in Infosys, Bangalore’s biggest and most known brand. Murthy explained that during their early days, they realised that it was tough to beat the blue-chip vendors of the West, on their terms in their territories, so he brought the competition to India, where he could compete in hiring the best talent by beating the Western majors in building the best work environments known to the industry at a cost that he could afford.

That he’s known as being the most ethical isn’t necessarily relevant for this article, but his behaviour at a time when the sector came under massive pressure following the Satyam scandal is worthy to note and is a pointer that Indian business leaders care about how they’re perceived globally.

The future of IT may rest on the shoulders of such giants, and for this reason it’s vital to not only know who they are but also know where they come from so we can get a better insight to where they’re headed.

Whilst in client meetings they may position themselves as being global companies, but there is no getting away from their Indian identity, something that should be embraced as opposed to hidden away. Rather than apeing Western business models, I’m certain they’re able to show an alternative way of delivering high-end solutions to a global client pool and by watching Murthy, Nadar, and Ramadorai, we may find the answers to some fundamental questions about the IT industry.

Welcome to the motherland – musings about my book tour

I write this post on the flight back to London after a mammoth visit to India and Singapore to promote my book. Gliding at 30,000 feet, I thought that I should write this before I forget the details I wanted to convey.

THE DELHI DURBAR
The visit started in Delhi, which I’ve enjoyed visiting for many years. I find the people I meet somewhat more relaxed than those in Mumbai, perhaps even more sophisticated in their dealings – all very unsurprising as Delhi is home to the thousands of civil servants, government officials, and parliamentary types – behaviour that is to be expected from an outwardly looking city.

But, this time, there was a marked difference. On the faces of the people I met, there seemed a massive anxiety, which when explored further centred on the Commonwealth Games, which are to be held later this year in the city.

The roads are gridlocked, hotels are overflowing and packed to the rafters, stadia aren’t finished – and on top no one seems to be articulating what the legacy from these games will be. One of my friends swept my observations away by quipping: “don’t worry, we’re a nation of 1.3billion, if required we’ll hand everyone a paintbrush to finish the job in the week preceding the games”.

The event at the Reliance TimeOut bookstore in Gurgaon was great. It afforded me the opportunity to practice my script and prepare for the big event hosted by the British Council the next day.

At the event in the British Council, we had a great line-up of speakers for the panel discussion. I was invited to deliver the keynote address and thereafter moderated the panel discussion, which included some heavyweights like Siddhartha Vardarajan (Strategic Affairs Editor of the Hindu), Saurabh Srivastava (Chairman, Computer Associates, India) and Rajesh Shah (Chairman of Mukand Steel and former President of the CII).

The discussion touched on themes like China, entrepreneurship, the future of family owned businesses, which the panel seemed to relish tackling. Quite a few people commented on the quality of discussion, which I too thought was incredibly good, if not fantastically moderated 🙂

AAMCHI MUMBAI
This was my first visit to Mumbai after the 26/11 Mumbai attacks, and it was brought home to me as a result of both book events – 24th & 25th being hosted at the Taj Mahal hotel – the centrepoint for the attacks.

One of these was on the Terrace of a venue called Chambers, which was written about quite a bit in the aftermath of the attacks, as it was one of the places in the hotel that a lot of lives were lost. Without commenting on the emotions that were running through me, suffice to say that at the end of the evening I had a tear in my eye and a lump in my throat.

The following evening was easier to cope with. The CII hosted a great event which saw that a number of embassies and consulates were represented. More than anything, I invited some friends who had moved to India from the UK, with who it was great to catch up and re-live the good times.

Mumbai’s quite a place. On one hand you have the Dharavi slum – Asia’s largest slum – and on the other you have the best that money can buy. Despite knowing this and having experienced both extremes during my many visits before, I was struck by the same during this stay. Mumbai is in fact not one but many, many cities with several faces to show – all of which became more evident as the evenings progressed (I’ll leave it at that for now :).

Lecturing to some of India’s brightest MBA students (at NMIMS) was as expected – great. To qualify for admission into one of these premier institutions takes a lot, so it was no surprise to see a class packed with phenomenal intellect and intelligence. Their questions, and also the discussion that ensued was eye-opening for me as their command on the subject was terrific.

VIBRANT GUJARAT
The Gujarat Electronics & Software Industry Association (GESIA) invited me to deliver a keynote address in Amdavad to an audience packed with some seriously influential people. The event ran on the lines of the British Council event in Delhi, with the only difference being that the book was released by three Secretary level bureaucrats – all of whom run massive state government departments in Gujarat.

Interestingly, the book launch took place on the 600th anniversary of the foundation of Amdavad City, which resulted in a massive celebratory event on the waterfront, which is being redeveloped in a major way.

One of the criticisms of the book is that neither Kamath nor Ramadorai are entrepreneurs. They were corporate professionals who lead their respective firms to global success. So, one of the questions that was posed to Ravi Saxena, Secretary for IT was whether this was a valid criticism. In his response, he rightly knocked the stuffing out of the question by demonstrating through examples of how some of India’s most successful enterprises are in the public sector run by public servants!

SINGAPORE SLING
The thought of opening an office in China fills me with fear, however it seems Singapore may be a great destination to get started, as it’s on the China trade corridor just as the UK is on the India trade corridor.

I was invited to speak to Aventis Business School, which is part of the New York State University, and the SP Jain School of Management, which is a leading MBA school in that part of the world. Naturally, I had to amend my messages for this visit, but I kept on being probed about the China Vs India theme that emerges in my book.

I have a few friends and relatives who’ve moved to Singapore for work, and used the opportunity to catch up with them. More than anything, what came through was despite the great lifestyle that can be afforded in Singapore, there’s no substitute for a city like London or New York.

MEDIA
One of the objectives was to drum up as much publicity as possible for the book, and I conducted interviews with the following:

Zee Business
Zee News
UNI TV
UNI Bloomberg
Press Trust of India
DNA
Sandesh
The Economic & Trade News
Hindustan Times
HT Cafe
IBN Live
Strait Times
Tabla
Asian Age

All of which, I’m sure, will begin appearing from next week. So keep upto date on www.indiaincthebook.com for the articles as they appear.

A Dubai Born Brand Going Global

It’s not often that you witness history, but last night, I observed just that. I’m in Dubai at the moment – a place I must say is not the most endearing for the simple reason that it’s all quite new and sparkly – despite the emirate of Abu Dhabi having to step in to help it honour its financial obligations.

There’s approx 1.5million people residing here, of which the local community constitute approx 15%. The vast majority seem to be from the southern states of India, who work in all capacities from maids & servants, professionals in corporates, and are also major investors with large enterprises in Dubai – all of whom, which have enabled its skyline to be as extravagant as it is.

It’s for this reason that I was truly taken aback to learn that the Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum went to his first ever non Emirati (local population) event in Dubai, and he couldn’t have picked a better one. The event marked the 50th anniversary of an Indian family having invested in Dubai, whose company – GEMS – is a world beater in the education sector.

What’s remarkable about this family and firm is the way they’ve taken the best of being Indian and have fused it with Arabic culture, to set it on it’s path to global success. As an internationalist, I’m going to use this post to not only congratulate the Varkey’s, but importantly to applaud the Sheikh for taking this small, but important step in strengthening Dubai’s ties with the future.

As for GEMS, having looked at them closely, I’m convinced they’re at the cusp of truly becoming a global brand. They may have a 100 schools and educate 100,000 kids, but the landscape is so, so wide for them to paint. Yes, they’ll go through the pain of becoming a business that moves beyond the identity of its owner; yes, they’ll also make mistakes – but having witnessed their flair, ambition, and drive to recruit the best talent, it’d be hard to bet against them becoming “the” first global private education brand.

In Dubai, we may have just seen the future…

India’s soft power is its strongest attribute

It really is no wonder that so many senior figures in the business world hail from the foreign service. After all amongst their jobs as Chairmen, Vice Chairmen and Board Members of large financial institutions and FTSE 100 firms, champagne drinking and hob-nobbing are as much part of their jobs as is holding the executive to account, which is why a career is the FCO is a great way to learn how to work a room.

So at the Foreign Secretary’s Christmas reception this evening, I bumped into Sir Thomas Harris, Vice Chair of Standard Chartered (and former FCO diplomat) and probed him about India; which unsurprisingly, he told me he has been visiting since 1973 – a time when his first trip took him to Calcutta, as it was known then. He spoke with such fondness of India, that I asked him what he felt was India’s biggest attribute – its economic might, her military strength, its nuclear programme, its market potential… to which he echoed what Shashi Tharoor recently said at TED India (http://www.ted.com/talks/shashi_tharoor.html) , that her ‘soft power’ is her biggest and most attractive feature.

Lo and behold, Stephen Green – Chairman of HSBC came along and reiterated what Tom Harris had said, and spoke volumes about his personal affection, beyond economics, for India and the sub-continent.

Just maybe at times, we need to sit back and really reflect on the lure of India. These two gents I spoke with today, had no reason to say what they did, but it does strike me that India’s soft power needs to be given more prominence and airtime, which I hope to do when I speak about my forthcoming book.

This is one of the main reasons I’ve selected Subhash Chandra, Chairman of Zee TV and Kishore Lulla, CEO of Eros Entertainment – as they’ve probably done more to push the Indian agenda internationally than most other conglomerates in India.

TATA Corus Job Losses – is this the Indian way?

In my book I comment on how in the run up to their acquisition of Corus, the TATA’s faced an absolute grilling from several quarters regarding their ambitions for the steelmaker, which today has announced job lay-offs for 1,700 staff in Teeside. Naturally, the unions were worried about the intentions of a firm that they’d probably never heard of. Sensing their discomfort, the firm put in place a programme of briefings in which their iconic CEO – Ratan Tata actually went and met with groups of people, including Parliamentarians, from the regions that Corus employed people.

At one such briefing, he made the point, which was well taken, that Indian firms don’t have it in their DNA to be vultures or become asset strippers. He looked them in the eye and said that not only were they buying Corus for sound strategic reasons but that he assured them that Corus would create more jobs, as he intended to take the firm forward. Sadly, not even he had predicted the global downturn and the circumstances behind this decision need to be presented so that no one jumps to any other conclusion than that the TATA’s tried everything to minimise losses, such as:

  • My sources tell me that the decision has been pending for over 8 months, and that the number of losses is smaller than what could’ve been the case.
  • The long term strategic partners, who pulled out, will be taken to court for failing to stick to their original commitments.
  • And finally, that there’s been an ongoing dialogue about the situation with all stakeholders for some time, so this comes as no surprise.

My reason for writing this blog is not to defend TATA, but to highlight that I wrote my book as a result of realising that the western markets need to know more about Indian firms who are increasingly making acquisitions in Europe & America, as a result of their improved understanding of thes histories and cultures of such people and firms, I hope they’ll be better armed to combat the negative headlines that often lead the news agenda as a result of my book India Inc. How India’s Top Ten Entrepreneurs are Winning Globally.

Does Uncle Sam get India?

Manmohan Singh should breathe a little easier now. In the run up to the visit, I can imagine that his blood pressure would be higher than normal for the simple reason that Obama has been busy cosying up to the Chinese and he’s also been lavishing Pakistan with a lot of attention – both states who have a fraught history with India.

I say that he must be breathing a little easier because Obama rolled out the red carpet for his first state visit, and said all the right things on the big subjects that define the current relationship.

In a TV interview, I was asked about the state of the US – India relationship, and rather than focus on the icy nature of historical bilateral ties, I decided to emphasise that the US and India don’t really have the luxury of avoiding each other, any more. The truth is that in the interdependent global economy we live in, US & India need each other to prosper.

Take the attraction for the US:

  • India’s middle class (approx 300m) is the size of the entire US population. This presents American companies with a larger market.
  • India’s demographic profile is a massive advantage. With nearly 40% of its population under the age of 30, you can imagine the opportunites that are thrown up for American service lead companies.

For India, the US has always been a major market, so it came as no surprise when I interviewed the ten entrepreneurs for my book (http://www.indiaincthebook.com), that the US formed the centre-point for their global expansion. Take for example:

  • There are more drugs from Indian pharma companies on US supermarket shelves than in India
  • That Mahindra & Mahindra has stolen market share from native American firms selling tractors to their own farmers
  • That, on average, Indian IT firms earn nearly two-thirds of their revenues in India
  • That Bharat Forge supplies components for 2 our of every 3 trucks in the US

However, what I’ve found is that the bilateral relationship in increasingly defined by the US – India Nuclear Agreement that was signed in 2008. With the market being valued at $150 BILLION(!) and American firms like GE and Westinghouse in pole position, they seem ( surprise, surprise)  eager for India to push on with its nuclear programme.

In its pursuit for energy independence, this visit gives Manmohan Singh and equally, Barack Obama something to smile about. It’s safe to say that Uncle Sam gets India.