Bob Goes To India

Why Am I Going To India?

I get asked that question a lot. The answer is simple -- there is an economic tectonic shift taking place and I want to see it up close for myself.

The moment that defined this shift for me occured about 2 years ago. The State of Indiana, where I'd lived and worked for many years, awarded a multi-million software development contract to an Indian company called Tata Consulting.

This would not have seemed out of the ordinary, except for the fact that Indiana's economy was struggling and the government went all the way to India to spend Indiana taxpayer money. This in a State that graduates more Computer Science majors per capita than any other.

How could the bid from Tata be so compelling that the Governor risked the public's wrath? -- which rained down on him and the contract was subsequently rescinded.

I started to research that question and I learned that just because I do know something big is happening, doesn't mean it's not -- or something like that.

What I discovered for myself over the ensuing 24 months and what Thomas Friedman articulated in his book "The World Is Flat" earlier this year -- that in the past 10 years India and China, in particular, and Eastern Europe, South America, Southeast Asia, etc in general had opened their economies to foreign investment and unleashed a highly motivated, well-educated and very large "middle class" to compete beyond low-wage manufacturing jobs. In the span of 10 years, 3 billion new capitaqlists joined the world economy.

The numbers are by known well-known, but they were news to me a year ago -- China graduating 500,000 engineers annually, India graduating 250,000 engineers -- the U.S. graduating about 70,000 -- a significant number of whom are studying "abroad" -- from China, India, Singapore, Taiwan, etc.

In fact, in engineering, science, medicine and even the law India graduates 4-5 times as many students as the U.S. China alone graduates 1,000,000 more college student per year than the US.

Think about those numbers and multiply them by 5, 10 or 15 years and one can get a bit concerned about how competitive the job market is going to be in 2020.

But wait, the news gets worse. Not only are India and China turning out 5 times as many engineering graduates, the starting salary for Indian engineers is about 20% of the starting salary for a freshly minted US engineer. With China, the salaries are about 10%.

So, are the Indian engineers only 20% as smart at calculus -- or do they only work 1/5 as hard as a US engineer? That has not been my observation from a distance. It appears that Indian and Chinese engineers are every bit as smart as their American counterparts, and actually seem to have a stronger work ethic.

Why visit India and not China? While I believe China will dominate the global economy after 2030 -- and China is maybe next year's trip -- it seems to me that India will be dominant until then.

India has several natural advantages that China lacks for now -- for starters, India is the largest English-speaking democracy in the world, with 1.1 billion people. Due to British rule they share the same legal underpinings as the US -- although they haven't discovered the "job creation" and "wealth transfer" possibilities of the US bar.

India's middle class -- which numbers about 200 million -- enjoys not only a national primary and secondary curriculum of very high standards (compared to the US), the parents are deeply involved in the child's education and there is a very strong culture of "to get ahead, get a college degree".

Students (and parents) are held accountable for their child's academic performance and low achievement reflects negatively on the parents, not the teachers, or the government, or society. Low achievement also meaqns a child is not promnoted to the next grade. No Failing Child Gets Ahead is India's emphasis rather than No Child Left Behind.

On Friday nights when US high school students are at football games with friends, Indian students are at home studying -- because Saturday is a school day. When US students head home at 3pm, Indian students still have 2 more hours of school. When US students are in their first two months of summer break, Indian students are still at school.

When US students wonder where "American" jobs went, Indian students will be gainfully employed.

So, this is what I've read and heard about India. On Wednesday I start the journey to find out for myself -- what is going on in India?

India Itinerary

Here's the plan:

Memphis to Detroit - 2 hrs, 90 minute layover, Detroit to Amsterdam - 8hrs, 2 hour layover, Amsterdam to Delhi - 8 hrs, clear customs 1 hr, Delhi airport to Oberoi hotel - 1 hr (I hope)

Door-to-door - 24 hours

Spend a couple days in Delhi. Oberoi Delhi Hotel

Fly to Bangalore.
Couple days in Bangalore with our friends at HealthAsyst. Windsor Manor

Fly to Mumbai
Day and a half in Mumbai. Taj Mahal Palace Hotel

Drive to Jaipur.
Day and a half in Jaipur. Raj Palace Hotel

Drive to Bharatpur, spend night. The Bagh Resort

Drive to Agra - sunset at Taj Mahal  Oberoi Amavilas Hotel
Day in Agra

Drive to Delhi for two more days. Oberoi Delhi Hotel

Fly Delhi to Amsterdam, Amsterdam to Memphis.

An Auspicious Beginning

India is a land of 1.1 billion people -- 700 million of whom are Hindu, 200 million Muslim with the remaining 200 million a mixture of Buddhist, Sikh, Jain, Christian and Jew.

Going with the majority , I ask Lord Ganesha for a safe and educational journey with minimal obstacles to overcome.

Ganesha or Ganapati is an extremely popular God in India - the Lord of and destroyer of obstacles. People mostly worship Him asking for siddhi, success in undertakings, and buddhi, intelligence. He is worshiped before any venture is started. He is also the God of education, knowledge and wisdom, literature, and the fine arts.

Interesting Flight to Amsterdam

9:30 am Nov 10. I'm on a 2 hour layover at the airport here, so a quick post.

Had a very interesting conversation on the flight over with a top executive from GM. This is a pretty depressing time for him -- 37 years with the company; tapped for this senior position a couple years ago and then all hell is breaking loose.

While we waited to take off he got several calls -- first one was telling him GM had just announced a restatement of 2001 earnings and the Wall Street Journal was not taking it well, next was a new issue with the SEC (which he obviouly did not disclose) and finally an update on Delphi -- that the UAW was going to dig in its heels and ride Delphi all the way to liquidation rather than except globally competitive wages. In the UAW's view no jobs are better than jobs at $9/hr. He said it was a "pride thing".

So, after he had a couple stiff drinks, we talked about how the auto industry got here. Summarizing a long and very interesting discussion -- the union-management "relationship", which may have worked when there was little global competition has become a choke hold on the industry. GM is at a permanent cost disadvantage due to union pay scales, inflexible work rules, "payoffs, not layoff", US health care costs and an extraordinarily large pension obligation.

It may have been the Scotch talking, but he is not optimistic that GM will avoid bankruptcy. The UAW will certainly strike Delphi as Miller closes US plants and in his view the UAW can "bring GM to its knee within weeks".

"So how is this all going to turn out"? I asked. It looks like Federal, state and local governments are going to have "to share the burden" of saving the US auto industry.

I asked if the clock could be turned back 30 years what could GM have done differently? Answer -- outsource more aggressively, off-shore sooner (GM has almost no meaningful operation in India or China), don't build so many plants in the US and management should have taken a tougher, more realistic line on co-pays and defined retirement benefits.

To top off his depression, Detroit appears to have re-elected the mayor that has plunged the city into a $300M deficit. 2,000 people per week are moving out of the Detroit city limits and likely the city will have to file for the municipal equivalent of bankruptcy.

On the bright side -- his kids are grown and living happily oustide of Michigan and thankfully are not in the auto industry. And his house is paid off.

Gotta run.

Another Interesting 8 Hour Flight

0400 hours - New Delhi - From Amsterdam to Delhi I had an entirely different experience. Sitting next to me was an upper middle manager from Microsoft. Summarizing his most interesting points:

1- he was born in India, but as his father worked for the UN, he lived all over the world - US, Europe, South America and attended some of the top private school for diplomats. They moved back to India for his junior and senior year of high school.

2- I asked how he did on his Central Board of Secondary Education Exams to get into 11th grade. He sheepishly admitted that his father had to use diplomat influence to have him accepted back into an Indian High School and he didn't fair all that well. He went on to a business college in Mumbai.

3- He lives in Seattle now and is happily married to an American women. Has no intention of ever returning to India to live, but enjoys going back to visit and to support Microsoft's growing presence.

4- he admitted that Microsoft was significantly behind other large corporations in outsourcing to India, but things are accelerating. They have built a huge software R&D center here that is doing extrordinary work and they have another couple thousand developers and a small but growing pool of back office workers in several cities.

5- he was very enthusiastic about Bill Gates' recent announcement about Web 2.0 services and was a real fan of Ray Ozzie. Microsoft has been late to the services game, but "when you generate $1 billion in cash per month, you can devote a lot of resources to catching up fast -- internal growth or acquisition."

He was clearly a very smart, enthusiastic, optimistic person. On the topic of whether America can stay competitive in engineering and manufacturing with India and China he was less sanguine. His point was "the sheer volume of engineers and scientists that these two countries produce just dwarfs America. At somepoint in time the numbers become overwhelming and insurmountable."

Morning In Delhi

7am - Noon Nov 12 - Well after a refreshing 3 hours of sleep, I started my morning tour of Delhi with a delightful guide named Mahli. She is a PhD in Indian history. She's been great -- I ask an endless stream of questions and she has very interesting answers with lots of historical context.

We took a driving and walking tour around the government buildings. The British influence is apparent in both the architecture and the street layout. The boulevards are very wide and straight with beutiful trees on either side.

Traffic was not very bad -- a lot less than I had imagined. Lots of very small cars (mostly Japanese, Korean), lots of motorcycles, bicycles everywhere and hundreds of theses 3-wheeled motorized taxis.

They do drive on the left-hand side of the road -- and on the right -- and often down the middle. I've seen several public service signs proclaiming "Lane Driving Is Sane Driving". They are ignored.

Weather is great - blue sky, 70 degrees, slight breeze, low humidity.

Mahli has sent me to take my nap. More later.

Afternoon in New Delhi

10:00 pm Nov 12 -- I've posted a lot of new pictures in the "New Delhi" album, so take a look.

This afternoon had many interesting and inspiring aspects. First, we spent an hour or so at a Sikh Temple. One removes ones shoes, washes ones feet and quietly enters the temple. All are welcome and there are a wide variety of worshipers present.

Some say short prayers, give an offering of food or flowers and then head back to work or other activities. Many sit around the open square room -- there are no pews -- and are in deep contemplation and prayer.

Three musicians play soothing music although using instruments with which I'm unfamiliar. It was a very peaceful and relaxing sound.

Nearby is another large square room with an open kitchen where the faithful are busy preparing lunch for any who are hungry. All are welcome.

I did talk with 3 lepers - one young woman and two men. They are careful not to touch you and I gave each some money. Lepresy is a horribly disfiguring and ultimately fatal disease. The Sikh worshippers obviously know these three and give them food every day.

Next we visited the shrine on the site where Gandhi was assisinated. He was fatally shot in the backyard of a friend's house as he went to bless a gathering of people and lead them in prayer. The memorial is made of cast foot prints that lead down a path and stop at a small shrine marking where he fell. Many Indians come to pay their respects to a man who is clearly a national and international hero of non-violent change.

Finally, we went a little way outside Delhi to an enormous complex of beautiful and impressive Hindu temples. Hundreds were there praying and I learned that most Hindus pray 2-3 times a day, at a nearby temple or in a small shrine they create at home.

It is very easy to sense the deep spirituality of the Indian people. It is reflected in their shrines, but also in their demeanor which is calm and quiet. Everyone has a gracious way of greeting someone new by bringing their hands together as if in prayer and giving a slight bow and a smile.

It has been a most fulfilling and educational day.

The Middle Class

0400 - Nov 13 -- Still trying to get on the local time zone, but since I'm up early I forgot to mention a conversation I had with my guide about personal economics.

Both she and her husband work and they are "in middle class" in her words. They have one 15 year old daughter. As a guide, her work is cyclical with the travel season and my sense is she doesn't work everyday.

I don't know how much Mahli makes (I have some decorum), but she had said the young people who work at US Call Centers make very good money -- "about $800 US per month".

My guess is between she and her huband they earn $30,000 per year and the income tax rate is around 30% at that level if I understood her correctly.

Now here's the good part -- they had lived most of their lives in a small apartment, but recently built and own a home outside the City. They have a live-in "servant" who cooks, cleans and takes care of the house. Mahli has a driver who also does the daily shopping -- for fresh vegetables and meats. The family's clothes are picked up regularly to be cleaned and ironed. And they have a man who takes care of the yard and other maintenance.

BTW - She and her husband never dated as hers was an arranged marriage -- "yes of course" as she said when I asked. Her daughter does not date "no, no, no, of course not -- girls only go out with friends in large groups". Nor will she ever date as Mahli and her husband will arrange a marriage for her some day.

We talked a bit about the ramifications of this -- There are also almost no out-of-wedlock children. There is also very little divorce in India - that's not to say every relationship is happy; just that societal pressures are to stay together and raise your children. If there is a sinlge parent it is because the other has died.