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Gill Blog

Monday, December 08, 2003

My Passage to India

About two weeks ago, I was cozied up in a comfy armchair at a local Starbucks doing a little work on the computer, when I heard a voice question, "Tony Gill?" I looked up and remembered his face instantly. A few years ago, I had been working on a contract for a small financial services firm developing the real estate finance component of a web-based financial portal and he was my supervisor. I asked him to join me and shortly after taking a few sips on his "chai-tea latte", he began telling me about a new frontier I should start exploring - India (he had always been a coffee drinker, so this statement explained the switch to his new beverage of choice). He told me that I would be amazed by the amount of foreign investment, the skill levels of the workers, and the way the country had nicely co-mingled western culture with Indian culture. "You really have to start paying attention to India, Tony. It's just mind-boggling."

I remember the last time he and I met. The project I was working on was near completion and I had already put the finishing touches on my next gig - working for an India-based firm that was outsourcing IT applications in the medical field to India. When the time came to put in my notice, I had lunch with this guy and started talking about my next assignment. I recalled the two trips I made to India as a child, once when I was six and again at eleven. Each of these trips was for a month, and each made the same impression - the place was straight out of the pages of National Geographic in its otherness. Aside from the great people I met, there was nothing that was even remotely familiar - no television, limited phone service, and unreliable power. I had little interest in ever returning.

Then, in my late 20's, my parents who had travelled there again suggested I make a visit to India again to see it from a new business perspective. "You won't recognize the place," my Dad said. My mom continued, "You want to see a place that will explode economically over the next 10 years or so?" The idea was planted and curiosity got the best of me. In 1993, I made the trip and saw a country in the early stages of a radical transformation. The first thing that occurred to me was that this place was very much like America after the war, when pent up demand for consumer products exploded. My parents experienced that, and I had read about it. This felt very much the same. In the years since my last visit to India, all the predictions my folks began making in the late 80's have developed just the way they had predicted.

Major business publications are featuring stories touting India's emergence. Despite warnings from nay-sayers to offshoring, who warn of the negative effects on American jobs and the economy (especially as we are about to enter an election year). The current cover story in BusinessWeek contends that this trend actually enhances America's prospects:
Harnessing Indian brainpower will greatly boost American tech and services leadership by filling a big projected shortfall in skilled labor as baby boomers retire...companies…that are hiring in India say they aren't laying off any U.S. engineers. Instead, by augmenting their U.S. R&D teams...they can afford to throw many more brains at a task and speed up product launches, develop more prototypes, and upgrade quality.

Says Rajat Gupta, an IIT-Delhi grad and senior partner at consulting firm McKinsey & Co.: "Offshoring work will spur innovation, job creation, and dramatic increases in productivity that will be passed on to the consumer."
With all this growth, perceptions have a way of changing too. No longer is the value of India merely associated with IT "sweatshops" that pump out cheap code, but it is now finally being recognized for its brainpower. As the BusinessWeek article states:
If India can turn into a fast-growth economy, it will be the first developing nation that used its brainpower, not natural resources or the raw muscle of factory labor, as the catalyst.
It seems as though everyone's in on the action, including prominent US-based VCs such as Battery Ventures, Sequoia Capital and Bessemer. In fact the India received $550 M of venture capital funding in 2002.

Oh right, back to my encounter at Starbucks. I was telling my friend about all the things that were happening in India and that I wanted to experience it firsthand with my next consulting contract in India. "Why would you want to do that? Isn't that where that Union Carbide disaster happened?" I told him I think there are great opportunities between India and North America to exchange ideas about disaster management and real estate continuity, and to explore outsourcing solutions as part of a business continuity strategy. I'm comfortable on both continents, and can be helpful to clients looking to maximize the advantages that each economy has to offer the other.

The final lines of the BusinessWeek article present the challenge and the opportunity:
Adapting to the India effect will be traumatic, but there's no sign Corporate America is turning back. Yet the India challenge also presents an enormous opportunity for the U.S. If America can handle the transition right, the end result could be a brain gain that accelerates productivity and innovation. India and the U.S., nations that barely interacted 15 years ago, could turn out to be the ideal economic partners for the new century.
I must remember to send my old colleague a postcard from Starbucks in Mumbai.


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