"Indian Business has much to celebrate", says the author of the article "can India fly?now for the hard part", published in the june 3rd 2006 edition of The Economist. India has been recently swept by great optimism, thanks to its phenomenal economic growth. Indian GDP growth hit of 7% in 2005, which corresponds to a domestic production of 801 billion Dollars within a year. In 1991, Manmohan Singh, then finance minister (who is now India's prime minister), began a process towards the opening and the liberalization of his country's economy. It is indeed thanks to an external-payment crisis (or in reaction to it) that India implemented its unique business model, oriented to an internationalization of the tertiary sector. Nearly six decades after independence, "India at last seems ready to take the place in the world that its huge population should command", says Manish Sabharwal, boss of TeamLease, India's biggest temporary-employment agency. His euphoria is widely shared. It seems that indian business model is the path to a future world primacy, or at least to the affirmation of an emerging power to counter-balance current business scale.
[...] On a more global level, it seems that, whereas competition between countries in on same region could be profitable to both countries and to the region, Chine and India do not compete at all on the same grownds. Chinas business model is based on the exportation of cheap manufactured goods—thanks to very efficient industrial policies, that concentrate production in few specialised and liberalised zones. China also disposes of an amazingly cheap workforce. The particularity once again of the Indian Business Model lays on the skills of its workers. [...]
[...] Considering the gap between the production costs of these services in India and in western countries, disengaging the process of business outsourcing would represent major loss of capitals to american and european firms. "Nobody (nobody else, refering to India) has enough engeneers to respond to client requirements says Mack Gill of SunGard, an american financial- software developer. The SunGard exemple does not lack of interest. SunGard employs more than 600 indians in Bangalore, where they maintain brass, the trading system used in nasdaq. [...]
[...] India forms the world's second largest numbe of engeneers per year—more than in 380 different schools. The average age of these qualified workers is 28. Graduates join the labour market just after leaving engeneering school. Because of India's ancient ties with Great Britain, young students speak perfectly operational English. Moreover, these highly qualified workforce is cheap: the salaries range from US$ 2,500 to US$ 8,000 per year. It represents a 70% lower cost than in wester countries for indentical skills. [...]
[...] India is now integrated in the global marketplace. However, much is to be done. In a ranking of 155 countries by ease of doing business in 2006, the World Bank listed India at 116, which corresponds to a rank two places below Irak! This has two main reasons: lack of infrastructure and the persistence of "red tape". Foreign investors seek for infrastructure to maximise profit. A beforehand stablished net of electricity for instance diminushes the costs of building an industry, the same way an airport is necessary to run out outcomes and to import incomes. [...]
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