Inclusive Globalisation via Innovation(part-3)

The essential difference is that work is not merely being transferred from one location to another -- as is done, for example, in traditional out-sourcing of manufacturing-but that it is being done differently. It is this difference, this innovation in solving a process or design problem, which makes for exceptiola1 value-addition and enables sharing of benefits for mutual gain. Thus, innovation-driven, global knowledge trade creates, in effect, new wealth which enriches all.

In the past to the world has witnessed the economic impact of innovation. New technologies --electric power; the steam engine, the aero plane, new strains of wheat, vaccines- have transformed not just countries, but the world. The twentieth century saw an abundance of such technological advances, making life everywhere better - though (due to the weapons of war), not necessarily safer. Disparities have grown, as have the super-rich, who have cornered a hugely disproportionate share of the world's wealth; yet, most of the poor are better off than they were a century ago, and a large new middle-class has developed.

We are now on the threshold of an even more substantial change. Innovation, combined with large scale global trade in the knowledge sector, is creating wealth and new opportunities. IT has made it possible to disaggregate work, get it done at remote locations and then reintegrate it; more importantly, it has created tools and platforms for simultaneous location independent work Innovation can, therefore, be a team effort involving multiple locations in different countries; increasingly, it often is.

This form of collaboration is resulting in a new model of globally inclusive innovation, with immediate gains to participating countries, and the final gains going to all through greater global wealth. The success of this model depends upon free and easy movement of ideas data and people, for it is only then that collaborative innovation is possible. It converts customer-client and vendor-supplier relationships into partnerships. Cooperation, collaboration and inclusiveness are the keywords. India has both the opportunity and responsibility of re-shaping thinking on global trade and globalisation. As we export this concept of inclusive innovation for inclusive globalisation, we can benefit equally by importing it into our own domestic system

Inclusive Globalisation via Innovation(part-2)

Now, for the first time, we sea a possibility of change, on a scale sufficient to make an impact. Creating this new paradigm of global trade in India, and its lead export sector: IT software and services. This industry helps its customers to improve the quality, cut down time-cycles and reduce costs for their services/products. Increased efficiency is a net gain for the customer, even as the Indian company profits from the deal. Thus, this is truly a win-win situation of mutual benefit. A study by the Mc Kinsey Global Institute in the US quantified this in relation to India doing IT work for US companies. It found that for every dollar of outsourced work, there ' was return of $ 1.46. Of this, 67 Cents was a saving and return to the US, 45-47 cents was potentially gained by the US through re-deployment of workers, and 33 cents went to India. Thus, the overall global economy gained as did both sides-US and India -of the transaction. Moreover, separate studies showed a redeployment of workers, but not net job loss. What better way to create a win-win situation?

Amidst the strident debate on globalisation not enough attention has been paid to this potentially dramatic new development. Both sides are currently caught up with mind-sets and rhetoric of the past. Most globalisers take recourse to the theoretical constructs of the economics of comparative advantage, but are faced with the discordant evidence of the human cost of imperfect globalisation. Anti-globalisation forces find their “neo-colonial West” argument undercut by dying western manufacturing units, even as the economies of China and India power ahead. Clearly, something new and different is happening and it cannot be fitted into or understood through intellectual frameworks of the past.

Of course, much of the total global trade is in traditional items and has well-understood, conventional impact. What is new is the large sca1e, technologically-facilitated trade in knowledge-services. This goes beyond the traditional IT outsourcing of the Y2K type, when millions of lines of computer code were written in India to modify programmes so that the change of year 1999 to 2000 - did not result in mistakes and chaos. Today, this trade also involves R&D being done in India, computer-based architectural design, new drug discovery through in-silica modeling, studying the impact of using a new material for a car part or an aero-engine turbine blade, equity analysis and a whole range of other diverse activities. All these are done in India because they can be delivered sooner, better or cheaper - resulting in gain for the immediate/corporate customer and ultimately for the end-consumer/individual.

Inclusive Globalisation via Innovation(part-1)

“We are on the threshold of substantial change. Innovation, combined with large-scale global trade in the knowledge sector, is creating wealth and new opportunities.”

(Kiran Karnik)

To many people, the arena of business is epitomised by Shylock demanding his pound of flesh - a world of greed, profiteering, and cold, inhuman calculations. In traditional Indian social stratification, the businessman is near the bottom of the hierarchy. A great deal of this negativity stems from the perceived role of business, which is seen as taking rather than giving a heartless pursuit of profit, based on using market dynamics to exploit people. Trading and services are considered 'transactional' and therefore, more prone to manipulation, profiteering and one-sided deals. These are seen as a zero-sum game, in which, gains of one party depend upon the loss of the other.

While this is, undoubtedly, exaggerated -a caricature as it was- there are enough real life examples to make the charges stick. The reduction of tariff barriers and the big increase in global trade - the process of " globalisation - have made this a particularly sensitive area, as whole countries (and not merely individual, firms) feel exploited and perceive themselves as losers in a zero-sum game. Thus, subsidies to a small number of US cotton farmers cause havoc to some African - 'economies and trigger farmer suicides in Vidarbha.

False promise of liberalisation(part-2)

To understand what is going on, we need a different explanation of what keeps investment and growth low in most poor nations. Whereas the standard story is that developing countries are saving-constrained, the fact that capital is moving outward rather than inward in the most successful developing countries suggests that the constraint lies elsewhere. Most likely, the real constraint lies on the investment side. The main problem seems to be the Paucity of entrepreneurship and low propensity to invest in plant and equipment - what Keynes called "low animal spirits" - especially to raise output of products that can be traded on world markets. Behind this shortcoming lay various institutional and market distortions associated with industrial and other modern-sector activities in low- income environments.

When countries suffer from low investment demand, freeing up capital inflows does not do much good. What businesses in these countries need is not necessarily more finance, but the expectation of larger profits for their owners. In fact, capital inflows can make things worse, because they tend to appreciate the domestic currency and make production in export activities less profitable, further weakening the incentive to invest.

Thus, the pattern in emerging market economies that liberalised capital inflows has been lower investment in the modern sectors of the economy, and eventually slower economic growth (once the consumption boom associated with the capital inflows plays out). By contrast, countries like China and India, which avoided a surge of capital inflows, managed to maintain highly competitive domestic currencies, and thereby kept profitability and investment high. The lesson for countries that have not yet made the leap to financial globalisation is clear: beware.

Nothing can kill growth more effectively than an uncompetitive currency, and there is no faster route to currency appreciation than a surge in capital inflows. For those countries that have already made the leap, the choices are more difficult. Managing the exchange rate becomes much more difficult when capital is free to come and go as it pleases. But it is not impossible-as long as policymakers understand the critical role played by the exchange rate and the need to subordinate capital flows to the needs of competitiveness.

Given all the effort that the world's emerging markets have devoted to shielding themselves from financial volatility, they have reason to ask: where in the world is the upside of financial liberalisation?

False promise of liberalisation(part-1)

(DANI RODRIK)

“* The predicted benefits of financial globalisation are nowhere to be seen
* Many emerging markets experienced declines in investment rates. Nor has liberalisation stabilized consumption.
* Capital inflows tend to appreciate the domestic currency and make production in export activities less profitable "

Something is amiss in the world of finance. The problem is not another financial meltdown in an emerging market. Even the most exposed countries handled the last round of financial shocks, in May and June 2006, relatively comfortably. Instead, the problem this time around is one that relatively calm times have helped reveal: the predicted benefits of financial globalisation are nowhere to be seen.

Financial globalisation is a recent phenomenon. One could trace its beginnings to the 1970s, when recycled petrodollars fuelled large capital inflows to developing nations. But it was only around 1990 that most emerging markets' threw caution to the wind and removed controls on private portfolio and bank flows. Private capital flows have exploded since, dwarfing trade in goods and services.

Freeing up capital flows had an inexorable logic - or so it seemed. Developing nations, the argument went, has plenty of investment opportunities, but is short of savings. Foreign capital inflows would allow them to draw on the savings of rich countries, increase their investment rates, and stimulate growth. In addition financial globalisation would allow poor nations to smooth out the boom-and-bust cycles associated with temporary terms-of-trade shocks and other bouts of bad luck. Finally, exposure to the discipline of financial markets would make it harder for profligate governments to misbehave.

But things have not worked out according to plan. Research at the IMF as well as by independent scholars documents a number of puzzles and paradoxes. For example, it is difficult to find evidence that countries that freed up capital flows have experienced sustained economic growth as a result. In fact, many emerging markets experienced declines in investment rates. Nor, on balance, has liberalisation of capital flows stabilized consumption.

Most intriguingly, the countries that have done the best in recent years are those that relied the least on foreign financing. China has a huge current -account surplus, which means that it is a net lender to the rest of the world.

Among other high-growth countries, Vietnam's current account is essentially balanced and India has only a small deficit, Latin America, Argentina and Brazil have been running comfortable external surpluses recently. In fact, their new-found resilience to capital-market shocks is due in no small part to their becoming net lenders to the rest of the world, after years as net borrowers.

Talent a big challenge(part-4)

"Years ago, we used to develop a new appraisal system in head-quarters and then take it to Europe or Asia. Now, we wouldn't dream of doing anything like that. We include virtual teams from all regions in devising systems because we have just one uniform system across the corporation," said Steve Bartlett, vice-president, HR programmes, Eaton.

Operational heads look at opportunities globally, rising above the regional and moving with markets. Every year, some business or other moves out of a location, to be relocated elsewhere, for a variety of reasons, including cost proximity to the Customer or talent pool. This presents a challenge, too.

Trying to find the middle ground has been her approach, she admitted. Among other things, this has lead her to try for a mix of people who have worked for a long time with one company and those who come from out-side, bringing with them a fresh perspective.

“The organisation gets better with a mix of long service people and those who come from outside with a fresh perspective," Ms Cook said.

Talent a big challenge(part-3)

"Retention is not about money but more to do with training and creating a career within the company. We have over 65,000 people across the globe. So there is a lot of opportunity to move within the organisation," Ms Cook said. She added that should someone leave and then want to come back they do re-hire.

In a diversified conglomerate, career growth and movement can both be addressed since the aim of the company is also to provide as great an exposure to its employees as possible.

"We believe it is a levelling influence that people should move around the different businesses within the corporation. There are different types of work, in different countries, with different managers to be found within it. Eaton nevertheless has a single policy across the globe.

Eaton has four main businesses, electrical fluid power, truck and automotive components with huge scope, size and reach. With more employees outside the US than within it, Eaton nevertheless has a single policy across the globe.

Talent a big challenge(part-2)

Handling that employee base of over 65,000 across continents presents its own challenges. Ms Cook, on her first visit to India and Pune, found things better on ground than they appeared from thousands of miles away in Cleveland, Ohio. She is enthused by the quality and numbers of people in the Indian subsidiary, the speed with which they pick up new ideas and want to implement them.

"Things are a lot better here than I had imagined them to be," she said. Although she was surprised at the way a road is widened here just knock off parts of a house. Diplomatically, she termed it 'an interesting way' of doing something which looked as if an earthquake had hit it.

The challenge is different in different countries, she noted. In Asia, it is hiring and retention, teaching English as a second language in Eastern Europe and creating a pipeline of talent as the baby boomers come dose to retirement age in the US.

Talent a big challenge(part-1)

“Keeping developing talent is a big challenge”

(Gouri Agtey Athale)

GLOBAL corporations have taken over from the British Empire in at least one respect: the sun never sets on their empires, either. Some-one, somewhere, is always at work in these empires.

This applies as much to the $ 12.4-billion Eaton Corporation, with employee strength of 65,000, customers in over 125 countries. Keeping this in mind, Eaton's vice-president (HR), Susan Cook, believes it is critical to have the right person for the job.

"This is a global corporation and we don't ever close: someone somewhere is working during 24 hours, which makes it critical we have the right person in the right job, to handle issues locally. Finding keeping and developing talent is the big challenge everywhere, for everyone just that it may play out differently in different parts of the world. The scope of the job is getting more complicated," Ms Cook said.

Global Warming(part-3)

But this will cost money. The feeble first phase of the emissions-trading scheme has raised domestic electricity prices by around 3-5% on average across the EU, and by rather more for industrial customers. If it starts to bite, then prices will rise further.

Higher costs for European companies will have two effects. They will increase conflict between the Commission, which sees combating climate change as its main aim at the moment, and member states. And it will raise calls for protectionism. That's happening already. Jacques Chirac, France's president, is demanding 'border-tax adjustments' (i.e., tariffs) to be charged on goods from countries that do not constrain carbon. The more ambitious the European targets for cutting carbon, the higher the cost will be, and the louder those calls will become.

There is one thing that would make it easier for Europe to stick to its ambitious targets - federal legislation in America. California and Europe are travelling hand-in-hand along their green path; but federal-level legislation will be more effective in dampening the volume of complaints in Europe. And if America does not act, Europe will undoubtedly, at some point, give up on greenery.

Global Warming(part-2)

It remains to be seen how effective an example Europe will set. So far, the EU's ambitious plans for emissions cuts have underwhelmed in execution. Most European countries will not meet their Kyoto targets by cutting their emissions; they will have to buy credits from emissions-reduction schemes in developing countries. A carbon-trading scheme, which was supposed to be a pioneering showcase, has so far foundered. Member states issued too many permits, and the price of carbon plummeted. The price signal may have undercut efforts in developing countries to put in abatement measures to sell carbon permits to rich nations. And because the scheme runs only up to '12, businesses have had no idea what the price of carbon will be-or even whether there will be one at all and therefore, no incentive to innovate or invest to cut carbon-dioxide emissions.

But the European Commission is trying to remedy these mistakes. Over the past six months, it has been getting tough. When member states put it in their plans for emissions allowances for their industry last autumn, it slashed them all except for Britain's. Some countries have been pondering whether to take the Commission to court; Germany's recent decision not to may have something to do with the decision of its chancellor, Angela Merkel, to push the green agenda.
The main point of these binding targets is to address the issue of short termism. By making this announcement, the EU is saying that carbon will have a price beyond '12, at least until '20. That should persuade companies to build a carbon price into their investment plans, and to invest in gas-fired plants rather than in coal-fired ones, to spend more enthusiastically on biofuels and to pour R&D money into hydrogen and other dean options.

Global Warming(part-1)

Winds of Change

The EU unveils bold plans to tackle global warming

So far, '07 seems to be shaping up as the 'year of global warming'. As January came, analysts were still debating the report issued in October '06 by Sir Nicholas Stem, which urged rich countries to combat global warming or risk seeing global GDP cut by 20% by 2200. Then, in February, the International Panel on Climate Change (IPCC) issued its draft report, which predicted that global warming will cause the world's temperature to rise by somewhere in the range of 1.1-6.4°C by '00.

Now Europe is trying to take action. On March 9, European Union (EU) leaders sealed an agreement on ambitious long term plans for reducing the 27 member states' greenhouse footprint. By '20, governments are supposed to lower emissions to 20% below those of 1990; boost the percentage of energy consumption that comes from renewable sources to 20% of the total; and ensure that biofuels make up at least 10% of fuels used for transport. In exchange for agreeing to these tough targets, individual nations won flexibility in, how they reach those goals.

Like the Stem report, the agreement is clearly meant to stand as a rebuke, and a prod, to, other nations, particularly America, that have not tackled the problem of anthropogenic global warming. With countries like China and India rapidly industrialising and providing evermore carbon-intensive consumer goods like cars to their citizens, the rich world will have to trim its carbon footprint substantially if there is to be much hope of slowing the pace of warming.

Regulatory Arbitrage (part - 3)

Celebrity advertising/endorsement:

Let us now turn our attention to celebrity advertising/endorsing. A few years back, Sebi took the stance that in case of any financial product regulated by Sebi, celebrity advertising / endorsement is a strict no-no. However, neither the banking regulator nor the insurance regulator has prohibited celebrity endorsements. For instance, a top cricketer models for a bank as well as an insurance company. Film actors have been used in bank advertisements and a film actor has also endorsed an insurance company.

What could lead to a piquant situation is when a financial services group with the same or near identical brand name with presence across financial products, governed by different regulators, resorts to celebrity advertising in the product category where it is permitted. This certainly rubs off, albeit indirectly on the other categories as well wherein it is prohibited. For example, Company A has a bank as well as a mutual fund, both with similar names. Now, the Bank A can advertise using celebrity endorsements, which will certainly have some rub-off effect on the mutual fund as well.

While the products are regulated by different regulators, the user of these products- that is, the retail investor - gets uneven information and therefore cannot make an informed decision when he or she compares products across product categories.

Regulatory Arbitrage (part - 2)

Risk factors:

Other than Government of India savings products, which carry nil investment risk, in all other cases there are risks attached and they need to be disclosed. However, such disclosures should ideally be uniform and not uneven across product categories governed by different regulators. Look at the insurance, especially life insurance, where the risk factor is disposed off in one line: "Insurance is the subject matter of solicitation." Thankfully, so far, no insurance company has failed to meet its commitments, but it is still early days. The liberalised insurance industry has been around for less than 10 years. It is important to note that the solvency margin is applicable on the "insurance" portion of ULIPs and not on the "investment" part and the latter constitutes the much larger portion.

Bank deposits do not even have this line. How many depositors are aware that bank deposits of only up to Rs 1 lakh (principal plus interest) is covered under deposit insurance? The poor depositor gets to know of this beast called 'deposit insurance' only in the unfortunate event of a bank failure, as has happened in the recent past with some co-operative and private sector banks. But, in the case of MP products, the risk factors cover nearly 40% of any product advertisement. However, the lay person does not get the essence of the same. In spite of the best efforts of the regulator as well as the industry, it has so far been a question of form over content. Unfortunately, this is also true of other capital market products such as shares and the like.

Regulatory Arbitrage (part - 1)

What you should know:

In A fast integrating global financial system, regulatory arbitrage is a term that has found great currency among regulators. A few months ago, the Reserve Bank of India governor spoke about regulatory arbitrage in context of non-bank financial companies (NBFCs). He stated that NBFCs, above a certain size, would be subject to closer monitoring and regulation, and in line with the regulations applicable to commercial banks. It was felt that foreign banks were getting around many RBI restrictions - such as capital adequacy requirements, lending limits, risk spread, restriction on branches expansion - by setting up wholly (or predominantly) owned NBFCs.

More recently, in a key note address at a capital market seminar, the Sebi chairman referred to regulatory arbitrage while speaking about reviving OTCEI. This has become a "hot" subject as a number of Indian companies are getting listed on the London Stock Exchange's Alternative Investment Market (AIM), which is akin to OTCEI. The Sebi chairman stated that it would not mean that companies would get any arbitrage benefit in choosing one stock market over the other and take the benefit of lesser disclosures, diluted corporate governance standards etc. It is indeed laudable that India's two foremost regulators have rightly identified and taken necessary action to arrest regulatory arbitrage in a number of areas. However, there still does exist regulatory arbitrage, even perhaps inadvertently, when it comes to saving products regulated by different regulators. Let us look at how insurance products (especially ULIPs), MP units and bank deposits treat two important aspects - risk factors and celebrity advertising.

Global retail challege to manufacturers (part -2)

Finally, as global retailers push for global pricing, manufacturers will have little choice but to restructure their operations in order to develop globally competitive cross-border supply chains. Many "national" factories and warehouses lose their rationale for existence.

A difficult and painful transformation relates to Organisational Structure. The objective is to present a single face to the global customer despite multiple points of contact. Companies tend to choose one of three organisational orientations. First, some companies give primacy to the country organisation. For example, Coca Cola started and subsequently disbanded their European account management. In spite of being an international brand, bottlers in individual countries are independent companies and operate autonomously.

A second, and probably the most frequently employed, is a balanced approach where the local account manager reports to both the local country manager as well as the global account manager. Finally, a more recent structure is where global account managers have the power since it is believed that global customers are more important than any local sales. The company is therefore organised around powerful global customers. Regardless of orientation, most firms are moving to set up global customer development teams. These teams have representation from different functions, business units and countries. Their responsibilities include understanding the global retail customer's strategy, developing the joint P&G/customer business plan, and coordinating with the Global Business Units and the country organisations to deliver against the agreed joint customer plan.

The coordination demands on the supplier's global customer team are extremely onerous. The various functions, business units and country organisations have to be synchronised through common goals, information and compensation. Coordination is achieved through co-location, composition, and compensation.

There are advantages in being located next to the global headquarters of the retailer, Perhaps most important is the access and daily contact which helps build relationships at the individual level which then spiral up into a stronger relationship between the supplier and customer.

The composition of global account management teams is an important issue. Who should lead it? Who should be on it? What skills are important? While we have excellent moods within companies for allocating resources to investment opportunities, we are still struggling to learn how to best allocate people to teams.

Most companies still link customer team compensation to volume. Increasingly, suppliers are being asked to take some responsibility for the retailer's margins and profitability on the supplier's products. As one customer business development manager observed: "For years" we used to say, 'margins are not our problems, they are your problems' ... Now we are saying, 'we are accountable for that'.

Global retailers will continue to power ahead. To be successful, manufacturers will have to learn to work effectively with them. Clearly, the best approach is to develop strong brands that consumers demand and, as a result, have to be Stocked and supported by retailers. However; even those suppliers who achieve this will still have to work hard to control their channels.

Global retail challenge to manufacturers (part - 1)

(Nirmalya Kumar)

To be successful, manufacturers will have to learn to work effectively with global retailers. The best approach is to develop strong brands that consumers demand.

THE past two decades have seen relentless growth of global retailing. Carrefour and Metro operate in more than 25 countries, while Aldi, Auchan, Tesco, and Wal-Mart operate in more than 10 countries. It has led to a remarkable power shift from Suppliers to retailers. Historically, power in distribution channels has rested with brandmarketers like Nestle and Unilever. In contrast to these multinational suppliers, retailers were local and fragmented. Retailing was dominated by the owner-operated sector, romantically referred to as "mom and pops." Therefore, retailing acquired an image of being a simple, unsophisticated business, undeserving of attention from superior trained minds, be they academics or MBAs of prestigious schools.

In this environment, supplier organisations were optimised for trade relations with small and, local retailers. Structurally, manufacturer organisations typically coalesced around products or countries. In terms of policies and practices, these suppliers were predisposed towards utilising their coercive power over retailers to achieve distribution objectives.

Today, the five largest global retailers may account for almost half of a consumer packaged goods (CPG) company's revenues. This gives these retailers tremendous negotiating clout, which they are known to exploit rather aggressively. Serving end-users through powerful international retailers presents a momentous challenge for manufacturers because it requires them to morph their organisations from being country- and product-centred to becoming customer- and relation¬ship-centred. It demands changes at several levels.

Nothing is as useful as a well-developed, well-articulated strategy for global accounts. It guides key account managers and customer development team leaders when they are face-to-face with global retailers and under tremendous pressure to cede to everything the retailer demands. A clear strategy gives them the confidence to say to important global ac¬counts: "No, we don't do that,' with the knowledge that they have top management support.

Global retailers push strong brands and use private labels to displace weaker brands. Consequently, manufacturers need to take a long, hard look at weak or local brands. That's why Procter & Gamble has eliminated many "also ran" brands including Aleve pain killer, Lestoil household cleaner and Lava soap, while Unilever has slimmed down to 400 brands from the 1,600 brands they owned in 1999.

While prices may differ across countries, the Structure of the pricing must be harmonised. Procter & Gamble has made significant Strides in adopting simpler as well as more logical and transparent pricing policies. While they do not reveal actual prices across customers, they do share the logic of their pricing structure and therefore are unlikely to be caught in a situation where they are unable to justify their prices across different retail customers or countries.

The Global Indian Takeover (part -2)

Just as the IT industry has worked around the anti-outsourcing brouhaha by near-shoring - moving their call centres closer to the customers, but keeping the back office and shareholding at home - the labour market can do the same. Send the kids out to study, and then maybe to work, and keep the remittances coming in. Inward remittances from Indians working abroad have surged from $2.1 billion in 1990-91 to reach $24.6 billion in 2005-06. Inward remittances have offset India's merchandise trade deficit to a large extent, thus keeping current account deficits modest through the 199Os. India is the highest remittance receiving country in the World. And now, the government of India is waking up to the need for a comprehensive outlook to out -migration of skilled workers. The ministry of overseas Indian affairs (MOIA) is creating a framework to deal with migration related issues. International migration is one of the pillars of the Indian government's globalisation drive and this is in keeping with other countries around the world where too, the importance of cross-border migration is driving policy initiatives. The thinking within the ministry is that the World Population Report which builds on the theory of demographics needs to be taken very seriously. MOIA now recognises the fact that developed nations face an ageing population and the Indian government's new migration policy framework needs to take into account India's youth advantage. Given India's unique position, the MOIA is, in fact, gearing up to address the issue of global skills gaps and the need to fill them. The 2020 Migration plan that the government is drawing up takes into account the fact that even as the working age population doubles by 2020, a lack of jobs in the domestic market will hit the economy and the fact that the job market overseas provides the solution for skilled Indian workers. The new policy addresses the need to prepare a pool of skilled workers within the available window of time to address the emerging needs of the global labour market. What this will involve is providing potential migrant workers with skills upgrades, foreign language training and familiarisation and exposure to destination country cultures with the ability to assimilate it.

How’s this going to happen? Easily even if the government starts teaching say, Italian (Italy leads the ageing nation lists) in Bangalore, it's also easier for younger students to assimilate into host countries. The Indian student population of the erstwhile Soviet Union, for instance, is now grown up, and has emerged as powerful business lobby and economic force in Russia and East Europe.

Rakesh Sondhi, a consultant doctor, with Hero Honda and Maruti in Gurgaon, says that foreign universities often help Indian students to acquire specialised knowledge as well as foster allround development - which is not possible in the Indian system. His daughter Mira Sondhi is an award-winning student of engineering in UK. "We feel that after this, an opportunity to work in the UK will help her to gain experience, vision and in¬dependence. She is a very talented student and a global career is what my wife and I wish for her, "says Dr Sondhi. Ruchika Castelino, head education promotion, India Education UK, British Council feels that the opportunity to acquire skills that enhance global employability is the pull factor behind increasing numbers of Indian students going overseas to study.

"While our classrooms are diverse and multicultural so is Canada as a country. Besides the country also attracts top global employers and there is a huge need for talented and skilled work force," says Ashok Raghupathy, MBA student at Canada's Queen's School of Business. For him the main advantage of studying overseas is the access to huge resources. His class mate Biswajit Das, who worked for five and a half years in India with TCS and Infosys before joining the MBA programme feels that: "I would be able to combine the best of both worlds and would become a successful global manager. Most of the companies in North America understand the importance of India as an emerging market and are scouting for talent with Indian experience, -he says.
Sheila M Embleton, professor and vice-president academic at Toronto's York University feels that the shortage of skilled, knowledge workers in Canada is making India a very important market to attract students. "When colleges from Canada give ad¬missions to Indian students, the underlying advantage is that many of them will stay on and later become Canadians and contribute to the skills pool in Canada, " says Ms Embleton. She feels that Indo-Canadians who were very prominent in Toronto in different walks of life, also helped in attracting skilled in-migrants from India. "Canada is not very rigid about Indian students proving their non-immigrant intent, "she adds. One big challenge the MOIA is having to addressing in its out-migration plan is that of global security concerns when it comes to movement of people. The second is ensuring the availability of a skilled pool of accept¬able migrants from India. Students, as a class, are usually extremely acceptable. And we've got a global supply of them.

The Global Indian Takeover ( part - 1)

Western nations face skills gaps that Indian workers can fill. The govt. is now pitching in to increase supply from India, find lshani Duttagupta & Sudeshna Sen

HISTORY, in the making and in hind¬sight, has a peculiar habit of throwing up surprises to blindside experts, politicians, economists, and the general public. Globalisation, everyone is agreed, is the future. When we talk globalisation, we usually talk about Indian MNCs, we talk growth rates, outsourcing, access to capital, reforms. What we don't often talk about is what globalisation doing to the peoples of the world the labour markets, the demographics, the societies. Continuing integration of markets, says the populations, and creating huge skill gaps. Meanwhile, higher education vacancies in areas like science, technology and research is going a-begging in developed countries. In the UK, the government has mounted a huge campaign to entice its youth back to the 'hard' stuff.

India - but not China - has 54 % of its population under the age of 2 5. At the same time, ask any HR manager, trained talent is not as easy to come by as people would think, especially globally competitive managerial talent. As the pressure on India's higher education ( institutes is crushing and ensuring that these young people have skills enough to stay ahead of the rest of the world is getting harder and harder.

World Bank, will make jobs around the world more subject to competitive pressures. "As trade expands and technologies diffuse to developing countries, unskilled workers as well as some lower skilled white collar workers will face increasing competition across borders. Rather than trying to preserve existing jobs, governments need to support dislocated workers and provide them key opportunities. Improving education and labour market flexibility is a key part of the long term solution," says Uri Dadush, director of the World Bank's Development Prospects group in - the bank's latest economic prospect report. At the same time, a recent global UK government and EIU survey of global CEOs has the lack of adequate talent as the single biggest problem facing the world, both in developing and developed countries.

Now consider this: The world, especially the developing world, is ageing. Public pension plans in some countries, especially in Europe which leads the ageing population league tables, has created incentives for older workers to retire, this exacerbating the financial problems of ageing we were talking, say, steel, the answer is obvious. Get the raw material from India or Brazil as the case may be, add value in Rotherham or wherever, and then export it to the rest of the world, from Canada to New Zealand. But the voices that argue for open borders and free movement of labour and skills are still few and far between. As one side-effect of globalisation, protectionism - against outsourcing, against migration is rising across the world. The integration of the EU has seen one of the largest cross-border east to west migrations in recent history, which is not making things any easier for either the host or sender countries.

Many years ago, we called it a brain drain. Then we discovered the value of an overseas diaspora, At one time, population was India's biggest problem. Now we flaunt it as our biggest strength. Today, India's unique selling point in the global marketplace is its youth demographic. Add to that students are generally more welcome in almost all countries (as long as they pay) than, say, software engineers or doctors who compete for local jobs. The US took in almost 600,000 students last year, the UK took in about 20,000. Vijaya Khandavilli, country coordinator, educational advising services of the US Educational Foundation in India (USEFI) feels that Indian parents have always gone an extra mile to provide the best of overseas education to their children. "This is in keeping with the national character and now with double in- come parents and availability of education loans more and more Indian parents are opting for education overseas. Indian students form the largest foreign group of students in US classrooms, obviously their global employability quotient increases considerably.