A couple of weeks back, we heard about Intel slashing 1000 jobs. Yesterday, it was AOL, cutting down their workforce by 5000.
http://money.cnn.com/2006/08/03/technology/aol_cuts/index.htm
All this brings back the not-so-fond memories of dot com crash couple of years back.
Though India so far has not been affected so far since we are cheap, that might no longer be the case anymore in the near future due to the rising wages here. The IT boom and the resulting high salaries of IT professionals in India is the very thing which migh take away the Indian advantage, of Indians being more cost effective.
Are these a sign of bad times ahead? Not a very comfortable thought I must say ...
6 comments:
Rajni,
What India has been through in the past few years or so is very similar to the California Gold Rush of 1849(?) and Dot Com Bust of late 1990's.
I'm afraid that times have been so good in the past few years, that a lot of people do not realize that what India is undergoing now is the exception and not the norm. Younger professionals have not seen anything else and they have gotten sucked into this myth that this is how professional life is. Actually, it is not. The ease with which people are getting jobs, very high salaries, trips abroad, etc is not the norm, anywhere else in the world. It is just, that at this juncture of history, the younger generation has been blessed with a lot of opportunities that were not evn thought, even upto 10 years back.
I'm not trying to be a doomsdayer or anything like that. However, what I am saying is that it is not going to be like this forever. So, enjoy it while things are good kids. 'Cause a lot of your experiences of today are going to be memories of day after tomorrow, when you'll reminisce to your grankids of the great Indian IT Boom of the early 2000's.
Sriraj
Sriraj,
I agree with you...this indeed is a very temporary phase.
India does have a lot of talent, no doubt, but the current times have maybe made people look over the fact that there is a need for Indians to specialise. When the D-day strikes, its the "Jack of all trades" who will be hit first.
Rajni,
What I was trying to say, is that once India has shown willingness in the past 16 years or so to enjoy the benefits of globalization, In think we ought to have some kind of macro strategies in place, in order to hedge ourselves against the shake ups in the world economy.
What I'm trying to say is this -- what if, for inexplicable reasons, most of the call center jobs are moved to Brazil/China/Ireland/south Africa? What if, companies see South Asia as being in a nuclear zone and so, would not want to invest all their baskets in India alone, and so waould venture to spread their risks worldwide by shifting jobs to other nations? Do we have a back-up plan to counter this? Do our IT companies, that are basically providing solutions at the moment, have a back-up, in case the orders dry up?
There are many such scenarios that could rise up -- a world war, trade sanctions, shifting strategies by MNCs. Are we prepared to deal with it? At the moment, every schoolgoing Chinese kid is mandatorily taught English. That means, that within the next 15-20 years, we language advantage over them is going to lose its edge. What if, China, by then, decides to start call centers at a fraction of the cost that India offers? How do we counter that threat?
This is a very special time in India's history. I think the younger generation needs to be reminded of this -- things aren't gonna be this rosy forever.
Sriraj
India has always been very eager to pick up new technologies and has always done a good job at it. Its the growth and the sustenance which we are not very good at.
Maybe there should be consortium in India to take care of the direction in which the IT industry is going....especially considering the revenue the IT industry generates and number of people it employs.
I am sure companies are doing their bit at an individual level, but will that be enough?
The flourishing economy that we are talking about is a myth.
http://lvraghavan.blogspot.com/2006/08/reality-bites.html
Software Engineers are not the world, nor are the technology companies alone..
India is a paradox, the best example of the most extensive dichotomy, which hits you on the face when you step out of your apartment and walk on the crappy roads..
So, the point is :
- The economy is hyped, so is our approach to anything and everything.
Though I hate to say this : I see this bubble bursting in the next few years and unless there's a radical change in mindset.., we are gonna be mere spectators.
Also Rajni : I don't think the talent we have is any more exceptional than what you find in the next country. It's a hype, but I'll live with it as it has done more good than harm.
I love Venkat. Period.
Having said that, one humble suggestion from yours truly is, concentrate on creating new technologies, along with the services we are providing.
One of our inherent strengths has been in manufacturing, except for the fact that years of corruption, high taxation. and a socialist mindset that if a person is an 'industrialist', s/he is a big, rich evil person (go to Peenya Industrial Estate and tell that to the sick, dying small scale industrialists, there) has withered manufacturing. I recollect Ratan Tata (in an interview when Tata Motors went public on NYSE) saying that China has that advantage over India (in manufacturing i.e.). We could do wonders in manufacturing electrical and mecahnical goods and components. We coould export a lot of that stuff to Europe, North America, Middle East and Africa, too. We do NOT have to depend upon IT alone (and guys, if I'm not wrong IT does not amount to much in terms of percentage of GDP, right?Plz clarify, if I'm wrong). However due to excess govt regulation of foreign currency transactions (though things have certainly improved in the last 15 years or so), excess taxation on 'industries' and an overall suppression of entrepreneurs and their ventures, there is no incentive for people to innovate and expand.
Plus, at the end of the day, IT and related stuff is just one industry, guys. It is a sexy industry, no doubt. But, guys, there are so many other industriess , apart from IT that ought to be encouraged and allowed to expand. God forbid, if anything happens to IT tomorrow, are we going to sink because of our inability to cope with global volatility? I don;t mean to pick on IT but it is of extereme importance that we spread our risks and not put all our eggs into one basket.
Once we start our own intellectual properties and technologies and patents, no matter what happens in the world, we will still continue to thrive and cope with global shocks. Some of the things I can think of is : alternate fuels, ayurvedic cures for big diseases, engineering components and devices, next generation of chips and semiconductors (and I'm not referring to Indian branches of Texas Instruments or Google providing IT solns but an INDIAN company coming up with innovations), etc. When WE gain control of these innovations, we do not have to be an ancillary to MNCs and thus subject ourselves to their demands and whims.
This is important stuff, guys. The past few years, we've spent wetting our beaks in the global economy. Now it's time to change gears, kick some ass and gain control of our future -- not continue to be subservient to other nations and corporations.
Sriraj
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