Last night U.S. President Barack Obama mentioned India twice in his annual State of the Union speech. While both allusions were appropriate, they missed the point a bit.
First he said, “Meanwhile, nations like China and India realized that with some changes of their own, they could compete in this new world. And so they started educating their children earlier and longer, with greater emphasis on math and science.“ Yes it is true that students in China and India are often much better at math and science than their American public school counterparts, this is NOT a new realization in India (or China). Indians have been good at mathematics for 2,000 years or more, from the invention of “Zero” to the creation of a form of calculus. We need to change the thinking in the United States in a deep way to embed a respect for science and math at the earliest age.
Then talking about the economy, Obama added, “To help businesses sell more products abroad, we set a goal of doubling our exports by 2014 -– because the more we export, the more jobs we create here at home. Already, our exports are up. Recently, we signed agreements with India and China that will support more than 250,000 jobs here in the United States.” That’s nice Mr. President, but we need ten million new jobs in the United States. I am on record saying that we can increase American exports to India by 500 percent, see my article in Business Week in October. We need more visionary goals.
January 27, 2011 No Comments
In 2009 “India maintained robust growth (6.7%) without Beijing’s hefty stimulus of $585 billion in part because it is less exposed to the international economy. China’s exports represented 35% of GDP compared with only 24% for India in 2008. Thus India was afforded more protection from the worst effects of the financial crisis in the West, while China’s government needed to be much more active to replace lost exports to the U.S. More significantly, though, India’s domestic economy provides greater cushion from external shocks than China’s.”
Private domestic consumption accounts for 57% of GDP in India compared with only 35% in China. India’s confident consumer didn’t let the economy down. Passenger car sales in India in December jumped 40% from a year earlier.
Read the full story here
January 30, 2010 No Comments
Sir Ben Kingsley, who played the the title role in 1982′s Oscar-winning Gandhi (and much less remembered role in the worst movie of the 21st Century so far, the Love Guru) is soon to be seen in a Bollywood movie, Teen Patti ( three cards, or three-card poker).
Perci Trachtenberg (Sir Ben Kingsley) is world’s greatest living mathematician. Perci encounters Venkat (Amitabh Bachchan, India’s biggest film star of all time) a solitary mathematician from India at a casino in Londo. Venkat tells Perci about an equation that could change the dialog on math forever and perhaps win an unimaginable fortune in gambling. A cut-throad adventure, Bollyood style follow.
The movie is directed by Leena Yadav and releases in February.
January 2, 2010 No Comments
Does the offshoring and outsourcing of Information Technology and related skills hurt America? How much does it hurt. I just finished reading an editorial comment in Information Week magazine from Bob Evans, Senior VP and Director of their Global CIO unit. By Bob’s estimate, drawn from Forrester Research numbers, perhaps $60 billion of work was offshored by American companies in 2008. That’s a lot of dough and thousands of jobs. But then he points out that just four American companies, Eli Lilly, Nike, Boeing, and John Deere had revenues of $54 billion from outside the United States in the last four quarters. Bob’s point is that offshoring of outsourced work is a small component of the overall economic activity.
(While I agree with the conclusion, there is a hidden fallacy in the international revenues of those four companies, particularly Nike. I bet 90% of Nike’s international revenue does not result in any American jobs; it’s Asian workers being hired and the products are being sold in Asia or Europe or elswhere).
It turns out that there is INDEED a more complete analysis of the number of American jobs created by exports to Asia. According to the East West Center, Inn manufacturing along, the number of American jobs created or supported by exports to Asia in the year 2008 was 1,515,026.
This includes over 290,000 jobs in my home state of california alone. And the stats don’t count services jobs such as those created in Hollywood, or such as those created by engineering and construction companies. Merchandise exports to Asia earned America $305 billion. This far exceeds exports to the European Union ($230 billion). What’s more, American exports to Asia grew 67% from 2001 to 2007 (whereas they grew only 53% to EU and 47% to Nafta countries). Growth rates are best calculated over five year moving intervals since a major purchase of aircraft or infrasctructure in a given year can distort the year-to-year growth numbers. The East-West Center’s website for this data is appropriately called AsiaMattersforAmerica and is worth a visit. The East-West Center is an education and research organization established by the U.S. Congress, so you can be sure that it free of bias from “external” sources.
April 20, 2009 No Comments
By Christmas this year, the world’s largest refinery complex will be operational in western India. It will produce 1.1 million barrels a day. Recent development is partly financed by a loan guarantee from the Export Import Bank of the United States. American companies have played a major export role in the new refinery’s success. San Francisco based Bechtel provided design and project management, Kansas City-based Black & Veatch sold sulfur and gas treatment units, New Jersey’s Foster Wheeler provided industrial heaters, and UOP near Chicago supplied catalytic converters.
In 2007, American sales into India shot up a breathtaking 74.3% percent according to US government numbers. Despite the slowdown, 2008 numbers so far have recorded a further 46.3% increase. The gain spans many sectors. For instance Aircraft sales were up three times primarily on account of Boeing’s civilian successes. And the military wing of Boeing has just bid on a $10.5 billion fighter project. Another American vendor, Lockheed Martin is also in the race. Sales of boilers and machinery rose by more than a third. So did fertilizers. And optical and medical instruments rose 26%.
India is already among the top 20 trade partners for the United States but the future holds a much larger potential. My company’s clients are seeing rises in orders from India regardless of industry. In my book, Business in 21st Century India, I talk about the Six C’s driving demand in India. Few western executives can afford to ignore the potential of India in these challenging times.
July 12, 2008 No Comments