I have no quarrel with our ( about to be released ) “ Industry Policy “ which plans to raise the share
of “ Manufacturing Sector “ in our GDP from the current 16 % to 25 % by 2022 (
- when GDP is targeted to reach $ 5 Trillion )
No doubt our Policy Makers must have figured out the CAPITAL INVESTMENT that will be needed to reach this
target ( Land – Buildings – Machinery – Inventory etc )
It would be interesting to know what “ Incremental
Capital Output Ratio “did they assume for the “ Manufacturing Sector “
They might have , even some ideas on the possible
SOURCES for these funds ( I hope , other than raising taxes ! )
But , if “ Manufacturing Sector “ and “ Service Sector
“ were two horses in the GDP race , I would bet on the “ Service Sector “, especially
from the following view-points :
·
“ Capital
Investment per Job created “ would be much lower ( may be 10 % of Mfg.
Sector ? )
·
Jobs
created would be much higher ( may be 5 times of Mfg
sector ? )
·
Time (
to create those jobs ) would be much shorter ( months
instead of years )
·
Export
of “ Services “ are much easier than export
of “ Goods “
·
Quality
of our “ Services “ are comparable – or even better
– than from other countries
·
We will , soon , have the desired quality /
quantity of Internet connectivity , all over
India
·
We are turning out thousands of Graduates each year though some need “ Skilling “
·
Salaries
of our Engineers are 20 - 25 % of similar
hires in USA – EU – Japan – UK etc
HERE IS SOME
EVIDENCE :
Highlights :
Years
/ No of MNCs /
Centres / Employees
/ Total Spend ( $ Billion )
===============================================
2016
/ 943 /
1208 / 343,000
/ 13
2017
/ 976 /
1257 / 396,000
/ 15
2018
/ 1005 /
1295 / 435,000
/ 17
------------------------------------------------------
The numbers do not include MNCs’ IT and BPM
( business process management )
Including these , Zinnov had estimated that
there were 1,571 centres
and 815,000 employees
in 2016
Types of Industries putting up Centres (
mentioned in this article ) :
·
IT – Automation –
Banks – Professional Services – Telecom – Media – Entertainment
===================================================
Context :
Brain Inc 2.0 [ 21 Aug
2017 ]
Where I wrote :
·
5 lakh ( 500,000 )
engineers work in “ Tech R&D firms “ in India
o
$ 22 Billion was the worth of their work in 2015-16
§ This will nearly
DOUBLE to $ 40 Billion in 2020
Now consider this :
· By employing 5 lakh
engineers , India’s “ Tech R&D Firms “ earned $ 22 billion . That
works to a billing of $ 44,000 per
man-year of R&D ( Export of Services )
· I presume that the
“ Manpower Cost “ constitute approx. 50 % of Billing Rate ( rest
being OVERHEADS and MARGIN )
· Hence , Indian
R&D firms must be paying an average of $ 22,000 per year to its
employees ( approx. Rs 1.2 lakh per month )
· As against this ,
both , Indian as well as American firms pay ( on an average ) ,
$
88,000 per year to H1 B visa holders
· With this kind of
“ Cost Advantage “ , is there a possibility to do better than the
projected earnings of $ 40 billion in
2020 ?
It is high time our Policy Makers launch a new initiative (
of Export of Intellectual Property )
, called :
INDIA : the BRAIN
FACTORY of THE WORLD
During an Interview with Business Line ( 16 April 2016 ) , the
then CEO of Infosys , Vishal Sikka , said :
“ We have to re-imagine the notion of services “
In support of my belief in the
potential re-imagination of this “ Service Sector “ , allow me to quote
Peter Diamandis { https://www.diamandis.com/blog/topic/web-3-0 ]
·
The Spatial Web is
also giving way to “virtual company headquarters” and completely virtualized
companies, where employees
can work from home or any place on the planet
·
Delocalize
with VR, and you can now hire anyone with Internet
access ( right next door or on the other side of the planet )
·
Web 3.0 is changing the way we work, where we
work and who we work with.
========================================================
13 Dec
2018
www.hemenparekh.in / blogs
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