" If you thought the rate of change was fast thanks to the garage innovators of Silicon Valley, wait until the garages of Delhi, Mumbai and Bangalore get fully up to speed. I sure hope we’re ready. " -- Quote from the article.
I sure hope this turns to reality and the tide rises the rate of innovation that has meaningful social impacts on problems like poverty and disease plaguing the developing nations.
Yes it is an achievement. Even a beggar owns a mobile phone. As an Indian what really bothers me is, you can get free sim card but to get a decent meal you have to spend 50-90 Rs (1-2$). Again most of the worker's daily wage is (3-4 $). The food prices are keep on increasing. Are we missing something?
Just wondering, were do you live in India? A 'decent' vegetarian meal (the kind I have everyday) costs Rs 25 from a restaurant. And possibly Rs 10-15 ($0.2) if I cook myself.
His numbers are a bit on the high side (I'd probably spend that much for a meal in the food courts at some SEZ), but the basic point is valid: I believe we still see a >10% inflation rate here. For basic food commodities, the rate may be even higher.
Not in the IT sector. For the last several years we've seen 20-30% salary increases annually. I would argue it's more due to market conditions and the hiring practices of the big consultancies than inflation, but probably a third to half of that is an inflationary response.
Sure, but the vast majority of Indians are not in the IT sector. These salary increases in IT are great for engineers, but they also work against India as an offshoring destination because of the rising costs.
Yes, exactly. It will be interesting to see what happens in the next 3-5yrs if salary inflation doesn't slow down or reverse and external investment is similarly reduced.
The Bank of India is raising rates to combat inflation, though they have been slow to adjust. Also, commodity prices are rising all over the world. Food is more expensive everywhere.
Agreed. RBI's large response time is a good thing: it was one of the factors that allowed some insulation from the '08 crisis. It's not so much fun when it comes to deposit rates though :)
I live in Bangalore and I've never been able to find a decent meal less than Rs.50 here. Even in my hometown (a relatively small town) a meal at a restaurant is Rs.30.
If you don't mind, where do you live in India?
Edit: To clarify, I'm not doubting your statement, especially since I've been hearing it frequently these days. I'm genuinely curious.
Besides the line regarding Mt. Everest may relate to China, the rest of the post is about India.
What is really the truth is that the wealthy nations are unheard of the situations in poorer countries. What is obvious in our community (banks, credit cards) is not at all in some areas in the world. It's rare to see the problems when the problems are not in front of us.
The good thing about cheaper technologies is that, they are more accessible, could improve the conditions of people faster and have more impact.
It would be a political debate whether how to account for that. To me it is too hard to say so, as the border is actually cutting the mountain in half. However technically the peak of the mountain is within the border of China.
China has its own problem now. The inflation is really which drives the living cost and labor higher. Lots of companies are trying to seek cheaper labors in countries like Vietnam. But one thing is true that mobile is really big in Asia. With great infrastructure, you can have signals anywhere including in the subways which drives mobile consumption.
The company I used to work has closed their "software factory" in ShenZhen, and expand the other one they have in Manila, because of the higher cost in China.
To me India seems as precarious as it is promising. Against all this entrepreneurial spirit is the possibility that northern India will drain its aquifers and its rivers dry, and that climate change will make refugees of the entire nation of Bangladesh.
I'm glad to see EKO (http://eko.co.in/index.php) making some solid progress as this post tells. It's nice they have started to make a profit.
I should tell that they have been trying this since last few years and one of the reason why the idea worked is that this startup reached out to people personally. The same is the story of Red Bus (http://techcrunch.com/2010/03/24/yes-you-can-build-a-web-com...) which reached out to the bus companies.
The trend I am seeing is that IT companies in India have bigger challenge in making people adopt the technology than marketing or anything else.
They're destroying India because they literally hate each other.
To strengthen India, it is better to give autonomy to FC/BC/SC/ST/Minority regions with a single passport and currency across these regions viz http://goo.gl/A8F6
Is it true though that politicians focuses on certain case? (With caste based admissions to universities and pandering for votes with these castes (by for instance welfare and job reservation)?)
IMHO, I think that is what China is doing right - no problems caused by special treatment of majority groups.
Indeed. It gets little play in the West because Indians aren't as obviously un-alike as whites and blacks (and the only Indians most Westerners encounter are upper-caste), but the Indian caste system makes the worst excesses of Apartheid look like a teddybear's picnic.
In America there is no system in place today that forces people to remain separate or keeps one Class subservient to another.
If you were born the son of a street sweeper, but excelled, you could become a doctor or lawyer or some celebrity or entrepreneur - and at the same time you would be fully accepted by your peers.
Not so in India. The Caste system freezes everyone in place. It is extremely difficult - almost impossible - for someone from the lowest Caste to rise in education and social status.
An Indian Untouchable would never be allowed to marry into one of the higher Castes and would never be accepted as an equal.
And for an Indian Untouchable to make it into medical school or opening a restaurant or become a priest in a temple or become a member of high society in India is very rare indeed.
You see, it's very easy to turn this story around, just alter the caption.
"It takes an American executive to disrupt cumbersome Indian banking", "With globalization, Americans go on to innovate overseas", "U.S. education is the driving force of innovation in modern India" and so on.
Note: they could probably do just fine with local education and an Indian COO. Point is you should be cautious with extrapolations from a single story.
This is the umpteenth time that this user (known) has literally copy pasted the same responses every time any article with India as a focus comes up on HN .. caste this, less than $1 that, etc etc.
I think the hype is real, at least the hype about the upcoming wave of major and disruptive technology companies based in India and China. I think American startups and established technology firms will compete effectively against these companies, but the effect on other countries with a less-established startup and technology investment culture is more worrisome.
I'm particularly referring to Canada (which I'm most familiar with since I'm Canadian). Canada continues to fall behind the US in terms of productivity and technology investment. Apart from a few of the major population centres and Kitchener-Waterloo we have little in the way of a startup culture. We do have a strong tradition of entrepreneurship but it appears to me that this is mainly focused on traditional and particularly service-based businesses.
Technology firms here will also tell you that Canadian companies are slower to adopt new technologies than companies in the US, India and China.
Countries like Canada that have let innovation stagnate because they currently enjoy a high standard of living may be in for a harsh wakeup call as Indian and Chinese companies start to really come into their own.
It's not all bad: The California proposition to legalize marijuana was defeated in yesterday's election, which should help maintain demand for BC Gold dope.
Not too long ago I heard stories from my friends that China started to buy natural resources based company around the world. Some target: Mining companies in Australia, Wood/Lumbers companies in BC. etc
I second to you. In Vancouver, I've seen many companies who have probably live as long as 3-5 years before they crashed and closed down permanently.
Most of the issues are related to their inability to innovate and their use of old technology (and methodology).
I don't mean to be rude but sometime I viewed Canadian technology companies as the western-but-India-in-the-past kind of company.
Many companies in Vancouver is looking for 7-10 years experienced (enterprise) Java developers. Gone is the need of fresh-grad/junior developers position.
Guess what the fresh-grads do?
1) Go back to Asia (most immigrants came from Asia)
2) Go south of the border to Google, Microsoft, or Amazon.
The cycle breaks down there. Tough really.
I've been here for almost 10 years since college and I'm starting to plan my move to south of the border or to Asia.
There's no money in Canada - raising funding is like praying to the Gods. Consequently, you get a lot of smaller businesses, as opposed to the uniquely American model of the get-big-fast startup (see: Google, Amazon, etc).
There's also the issue of talent drain and pay. I'm currently south of the border working for double what my going rate is in Canada. Most of the people I went to university with are also here (as in the USA).
Yes, for the people not familiar with Canadian software, double. I'd like to be closer to home and live in a more progressive society, but it's a 50% pay cut to do so.
I continue to struggle to understand why things are this bad. How is that a mere hop across the border can easily double one's pay? What prevents Canadian companies from being compensation-competitive with American ones?
Part of it is the distinct lack of "real" engineering jobs. A lot of work I've seen either belongs to the thoroughly disreputable gaming industry, or working as Java monkeys pounding on keyboards... neither option appeals to most top talent.
The other part is the culture of satellites - much of the software work I've found in Canada is at satellite offices of American companies, and having worked at one before, it seems that it's less "satellite office" and more "place full of cheaper people so we don't have to pay Californians to do the menial stuff".
But still, what's with the lack of high-paying software gigs in Canada?
SR&ED: I've said this before and I'm going to say this once again. It attracts fishy investors, clueless businessmen, lame business models (clone of X social networking site), and a sense of false success.
Immigrants: no, it's not their fault. But they're trying to survive. So when everyone is trying to survive, basic needs must be fulfilled first (food, house, clothes).
Supply > Demand in HR: People want to move to Vancouver (even people from the East Coast) to enjoy life. But the demand of jobs aren't that many. So you get people from everywhere who probably have 10 years of experience coming to Vancouver.
Supply > Demand in Products: Not too many people are willing to buy software or services. Probably because they don't care or they don't need it or because they want to save money to survive (immigrants).
Enjoy Life: Laziness. Get it done by 5, I want to go skiing/fishing/hiking. Forget unit-test.
Government Oriented: They rule around here. You know how it is with the government contracts and deals and whatnot. Man, even Government own and run online gambling website (http://www.playnow.com)
As you've said it before: disreputable gaming industry. Tons of online gambling companies based in Vancouver. I don't see the rate to go down at anytime soon, especially when our municipal just open its own. (see above).
Politics: due to fierce competition (survival) and/or laziness, politics is all time high. Ability to get things done go down significantly. Guess what's the hottest job in Vancouver? Business Analyst. Guess what they do (mostly)?
All these things created an unhealthy cycle. Suddenly people don't want to be an engineer or a developer. They all want to go to the managerial position.
One other choice is to move East to Toronto. There's better chance there, albeit not superb, but still way better than the West coast.
Well, sure, lesser of two evils anyways. The choices are: unemployment in an expensive city like Vancouver, or crappy employment in a cheaper city like Toronto, or slave your ass away and be abused at a media/gaming company in a city like Montreal.
Or live in the desolate tundra that is Ottawa where lucrative but mind-numbingly boring government contracts abound.
No wonder Canada's software scene is completely dead.
I grew up in Vancouver, moved east for school, and looked on both coasts for jobs near graduation. Vancouver had few jobs, and your best bet was EA (no thanks!). Toronto had more interest in entry-level engineers, but upon closer inspection most were monkey jobs pounding out Java boilerplate for some bank or other gargantuan legacy enterprise system.
There were a few companies I encountered that did honestly really cool stuff... they were also tiny and unstable (financially) as hell. Generally a poor idea to work the only good job in town.
I loved living in both Vancouver and Toronto, and honestly wish I can have that lifestyle back (the poverty levels I see in the US is shocking and appalling to my over-protected Canadian ass). But damn, slaving at some enterprise Java-factory for half the pay is a pretty high price to pay.
Yeah, EA Vancouver/Burnaby is one of those "satellite" branches: when there's a problem, they get to experience first-hand on what downsizing means. Wouldn't count as the best bet since aside from OT there are big possibilities of massive lay-offs.
I'd take entry-level Java boilerplate code at any given day than a Microsoft boilerplate code (which is what Vancouver has to offer these days, especially with the government around here). Vancouver salary is also between 20-30% less than to that in Toronto.
And lately, since all the fun lies in Asia, I can't wait to go there. Vancouver becomes boring (and gray) to me. Especially with the 10 months of rain.
'Tis true. The poverty and general situation on the eastside is pretty saddening.
It is, however, nothing compared to Seattle where I am now. Where in Vancouver the violence and poverty seem to be confined to a small-ish neighborhood, in Seattle it's rampant and everywhere.
Poverty is nothing new - I've seen it in every place I've ever lived. It is however somewhat shocking to see homelessness overrun an entire city - there's not a single spot in downtown Seattle (or hell, anywhere within city limits) where you can't find vagrants or street kids.
This isn't a value judgment on homelessness in general, but rather an observation that unlike some cities where the worst of the poverty is geographically distinct, here in Seattle it's just... everywhere.
Maybe it's for the better - the harder it is for you to avert your eyes, the more compelled you may be to fix it.
Well, scratch that, the city of Seattle just cut even more funding to homeless social services.
My current feeling is that the culture barrier will focus those growing markets inward before long.
As China and India continue to modernize, their innovators will enjoy much more success in feeding their native markets. Simply: if you're a software entrepreneur in India, does it make more sense to compete with western software companies for western business? Or to sell software that runs on the kinds of machines Indians own, architected with Indian cultural preferences at the fore-front and can grow along with the growing Indian market?
You're hopelessly behind in competing with the west for western markets, but unbelievably advantaged in competing with the west for native markets.
They're only focused on us, for now, because their wages are so advantageous as to make up for the pains in bridging the culture-barrier. As they continue to modernize, those wages will rise well past the point where it makes business sense to continue.
May I suggest reading "Fortune at The Bottom of the Pyramid" by C.K. Prahlad "
This is an excellent guide for innovation for India and much of developing world. Companies like EKO etc. have taken these lessons and are building upon those ideas.
Hype aside, one of the key pieces of American technology development is a very simple one.
Bankruptcy.
The legal ability for an individual or a business to fail.
Seriously.
If I don't get buried in a mountain of business debt from a (legitimate) business failure, then I am free to try again with a different business idea or different business model, and to pivot and to hone my business skills, and to see what else might work with the customers and with the investors.
Countries and regions with punitive laws around business failures and particularly around the legal exposures and debt incurred by legitimate businesses will inherently operate at a competitive disadvantage.
Carefully balancing the societal benefits and costs of non-putative bankruptcies (and of non-putative layoffs, for that matter) is critical in encouraging new business ventures.
This is a great point. The difference in bankruptcy law between the US and e.g. France or Germany creates an incentive for US entrepreneurs to take more risk since if things don't work out (and they usually don't) they can dust themselves off and try, try again without crippling long-term debts or too much of a social stigma.
On the other hand, relaxed bankruptcy laws can be taken too far as in the housing crisis since homeowners took in huge profits by flipping houses during the housing bubble but can just walk away from their mortgages if they're underwater which means the loss is eaten by the banks/taxpayer.
Think too about the "crippling long-term debt" on the other side of the contract, too.
Loans are built on standard contract law. There are penalty clauses and associated costs with exiting the contract, and you (from whichever end of the deal you're on) have to expect that those exit clauses might be exercised.
When thinking about these "strategic defaults", consider the responsibilities of and the systemic risks that occur on the origination. If you're originating or are repackaging what may be questionable loans or derivatives, or are incurring excessive leverage, isn't that also a systemic risk?
It's a balance.
The folks that are severely upside-down (and staying that way) won't be consumers, they'll approach indentured status. They'll be paying for the losses they've taken by not walking away, and (given that these folks are taxpayers, and if they have any money left) in taxes, and (indirectly, economically) by not being able to buy the products and services that businesses are looking to sell (meaning a slower recovery).
If this topic is interesting, here is some "light" reading out of the University of Arizona: "Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis":
And playing devil's advocate here, if you're +not+ exercising what you're entitled to within a contract (and from either end of the deal), then what does that say about the sustainability and efficiency and equality of the business system?
And yes, this sort of legal and contractual mire can bury a country and an economy. As we're seeing.
Uh, exhortations to "believe the hype", phrased in exactly those words, are usually a sign of late-stage evolution of the hype, shortly before the collapse of the hype. I remember them from the dot-com bubble, I remember them from the housing bubble...
(I believe that India and China have a relatively bright future. I do not believe in the narrative whereby the United States faces problems, because we live here and can see them, but China and India must inevitably be on a smooth trajectory upwards with no bumps, because we don't live there to see the bumps and in China's case we are probably having the bumps deliberately and systematically hidden from us. Just as Japan's inevitable triumph over the entire world turned out not to be bump-free either. In fact, doesn't anyone learn from history...?)
Don't believe the hype. I sincerely hope the BRIC countries do well, but you can't assume they will grow at the same rate for the next 20 years. There are Earth shattering events every few years which could derail any of these countries. Politics, war, natural disaster, tech revolutions, etc. The US can adjust to change faster than anyone.
I sure hope this turns to reality and the tide rises the rate of innovation that has meaningful social impacts on problems like poverty and disease plaguing the developing nations.