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De-coupling of OIL from world economy July 9, 2009

Posted by Bipin Agarwal in Future of transporation, Global Economy, IT Offshoring - Future Direction, IT offshoring and Real Estate development, Politics and economy, Quality of Living, Real Estate Development in Global Economy, Real Estate Development in India, Real Estate development in USA, Recession.
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OIL Power – OIL, the dominant source of energy has impacted the world economy and power struggle among countries for a long time.  The effect has been more visible for last twenty five years. Middle East, Russia, other Oil producing countries have enjoyed unprecedented boost to their economy and foreign reserve  because of high oil prices. We all know that it is not a pure supply and demand dynamics. This game has worked well because there was no other significant sources of energy that was easily and readily available.

Past Effort to Change – There have been lot of attempts to create new sources of energy including nuclear power, wind energy, bio-fuel, and clean coal. All of these efforts have been successful to some extent, but none of them significant enough to change the dynamic of world economy and power status. Lot of that has to be with the economics of the particular method (bio-fuel, clean coal), time it takes to set up the plan and disposal of waste (nuclear), predictability of the energy generation (wind). As a result, none of the method so far have emerged as a challenge to OIL energy.

Off-course like everything else, corporate interest and desire to maintain power status by countries has further compounded this challenge. Both OIL and defense industry (selling arms to protect the supply of OIL sources) has played a significant role in creating hurdles. Politics has played a big role as well. Keeping the OIL price high forces the poor country to spend their significant resources for buying oil, hence limits investment in other areas for productive growth. Further, the market for automobile has been too large for these corporate to let it go easily.

What Has Changed – It is fair question to ask. There is lot of new dynamic from developing countries to developed countries. Growth in the developing countries India and China have changed the market dynamics for Oil consumption. These countries cannot afford to import OIL they need to support the economic development.  Economic development is putting a lot of pressure on the politicians to find alternate source of energy. Developed countries, US and part of Europe have so much debt that they have to figure out a way to reduce OIL consumption. US is suffering the most from OIL dependence. There is lot of domestic pressure in US to end Oil dependence.

Solar, the GAME Changer – We all know that SUN is, as predictable a source of energy as far as humans are capable of visualizing. The capability to harvest this energy on a large scale in a economic way has been a major barrier to solar becoming a challenge to OIL.

Good news is that now we do have a scalable and reasonable economic solution to harvesting solar power.  Significant reason for this change is because we can cost effectively manufacture the devices capable of harvesting this energy as opposed to conventional means of either drilling (oil and gas), digging (coal), or changing the course of rivers (Hydro). Recent decision by US government to review sixty seven thousand acres of land for solar power generation is a further validation of the direction of solar based energy. Large corporation currently own large tract of land to participate in the opportunity, I call it SOLAR GOLD. Gold is not black any more.

Impact on World economy and Power – Every country will feel the impact of this change (SOLAR GOLD) differently. It is not possible to discuss every country in detail in this article, So I will talk about some regions, countries. If you would like to discuss a county of your choice, please send me a note @bagarwal.india@gmail.com

Middle East and Russia, there have been a lot of conversation that OIL at dollar eighty a barrel is what they need. It cost about couple of dollar to produce a barrel of oil. Why do you think world will come to the rescue of Middle east and Russia if Solar is available.  While Russia is better positioned then Middle east because of their defense capability, but that is not good enough.  President OBAMA is playing the card right by going to Russia, putting the arms control pact and engaging Russia for nuclear issues so that defense capability (industry) becomes a  non-issue. These are not well positioned for long term.

China & India – Both countries are heavily dependent on importing Oil and Gas currently. China has been pro-active in securing the oil supply like USA has done for decades. This does change the long term picture. Both countries will resort to using Solar in big way and this position them very well in the long term.  These two countries are currently not dependent on Oil Export for their economic prosperity and it will be huge advantage in the long term.

Other developing and emerging countries – This is a mixed bag. Some of the developing countries have OIL export in combination with other industries (Mexico – OIL and manufacturing). Other countries in this block have lot of domestic economy. It is unlikely that any of these countries will ever become a super power. There will be wide range from being no effect to significant impact for each of the country.

Europe – There is part of Europe that is well developed, West Germany, UK, France, Denmark, etc. then there is part of Europe that is still developing such as Eastern Europe. It is unlikely that any country in Europe will be a Super power in the long term, However Europe as a block (European block) has the potential to be a significant player, that is only if they can stay together which is very unlikely. It is human nature. US, China and for that matter some of the countries within Europe will do everything possible to make sure that Europe is divided and chances are that they will be successful.

USA -It is interesting. USA is a huge importer of OIL but also is superpower. How did that happen? Dollar as a world currency has helped USA more than anybody is willing to admit. Defense capability, other industries such as financial services, technology  helped USA to be the dominant world power. Immigration policy of USA to attract the brightest from all over world has played a key role. USA is also taking big steps to reduce dependence on the OIL. USA is pushing for electric car as a transport mechanism and pushing Solar to produce bulk of its electricity. Since all this is being done in the private sector with government incentives, USA is moving at a fast pace to maintain the Superpower status.

Summary

Every country will have to adjust to this reality of SOLAR GOLD over time. If you are a  country that is largely dependent on Oil export only, there is lot of work cut out for you.  Country currently importing huge amount  of Oil (USA, lot of European, developing countries), there is a significant opportunity for you to position yourself for success. It will require a focused effort, a combination of policy, investment, and incentives both in the area of energy production, education, and infrastructure.  A country with a population base (critical mass) will have an inherent advantage (USA, China, India) to play in the super power league.

You have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask.

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/abou

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Twenty Minute Lifestyle to accelerate Glocalization March 25, 2009

Posted by Bipin Agarwal in Global Economy, IT Offshoring - Future Direction, IT offshoring and Real Estate development, Politics and economy, Quality of Living, Real Estate Development in Global Economy.
3 comments

Glocalization is a key to recovery of the world economy.  As I have written before it is not a question of, if it will happen, it is matter of how long will it take to happen. There are lot of global organizations which would like to maintain the status quo of globalization, because it serves their purpose. In addition to above, corruption in the developing, under developed, and poor countries make it hard for glocalization to take root. Most of the government in these countries are not as transparent and people focused as they need to be to support local economy. However it will change because people will demand it.

Lack of infrastructure  is a one of the most common reason that companies are are not able to start there operation. Waiting for government to build infrastructure in the entire country in not feasible and possible in the time frame. Twenty Minute Lifestyle based micro-city development offers a unique opportunity for these countries to develop infrastructure in a focused manner to support local economy. Financial institution supporting these countries can see the result of their funding if the funding is used to develop these micro-cities.

I am here at Skoll Forum for social entrepreneurship at Oxford.  I had an opportunity to interact with people from all over the world and discuss the concept. I got a strong endorsement of the concept and they would like to see their country to adopt this approach. People from Africa, Hungary, Asia, central America, even developed world would like to see the quality of life offered by Twenty Minute Lifestyle to be made available.

One good example of Glocalization is the local restaurant industry in Europe including Rome, Vienna. You will find clean, good local shops owned by local people and running them as a successful business. People often give example of how a Wallmart creates up to 150 jobs and increases tax revenue as a example of the benefit of globalization. What they do not want you to know that actual tax revenue is less or same before Wallmart showed up. While there could be 100 small business and making respectable income, now there are 150 minimum wage jobs, with all the profit shifted to Corporate coffers and china. WAllmart is doing a great job of re-distributing the wealth, take money from local business and people and send it to corporate executives. Wallmart does deliver lower cost goods successfully at the expense of local business. Wallmart could easily be branded as a biggest destroyer of local business. STARBUCK, Mchonnald, Subway, Pizzahut, Domino, are no different. Government should force the chnage of ownership structure. It is OK if back end is centralized, local shops should be owened by local people.

One of the biggest gift of globalization is that it has destroyed the local culture and shopping experience of countries, state and community. You can now travel anywhere in the world and eat same food and buy from the same department store with no passion by the employees who are working for minimum wages.

Reason Glocalization will happen is not because government or large corporation want it, it is because people will demand it.

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/about

Will Glocalization kill Globalization? March 10, 2009

Posted by Bipin Agarwal in Global Economy, IT Offshoring - Future Direction, IT offshoring and Real Estate development, Politics and economy, Quality of Living, Recession.
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April 30, 2009 update

Today Chrysler announced bankruptcy. I think this is a good news for America. Rather then going through the pain every day, this will help the employees and company. Shareholders and debt holders will not get much.

Is GM next? This could a warning to bond holders of GM. Unlike Chrysler, until now no body has been lined up for GM. Nissan had expressed interest.

You should expect that there will more local manufacturing of car, irrespective of the owner. This is a great day for Glocalization.

As I had predicted, Glocalization will accelerate US economic recovery.

Bipin Agarwal

March 10, 2009  update

Discussion about Glocalization is over. It is going to happen. In fact, USA will be the biggest beneficiary of this trend in the short and medium term.Long term picture is not great.

Recent article in Financial Times by Krishna Guha and others called this trend as de-globalization.Thank you for endorsing it, even though they are late in expressing opinion.

Talk is cheap, while everybody including G-20 will talk about the open trade, free trade, etc. The fact that Bank of America (so called global bank) has to withdraw the offer letter from the MBA student studying in US is the real begining of what is coming.

Currently, US will benefit if any manufacturing, or service activity shifts to US.  With government involved in financial services, health care and manufacturing, it is given that activity has to happen in US.  Risk is that US will go too far into it. Recent action by Bank of America to withdraw the job offer to MBA student studying in US, who are not citizen, is alarming. Are we going to destroy our education industry?

Long term implication of  glocalization for US are not great. At the end of the day our behavior will encourage the other countries to follow the same policy. Demographic of the  population is in the favor of China, India, and other countries.

Glocalization will accelerate the decoupling of the rest of the world economy from west.  It will be good for our economic and political leaders to discuss this topic in detail and put the right policies in place as opposed to have the policy of the day with an eye on the next election.

Feb 2009 update

Debate about the Glocalization is over. Now it is a matter of execution. How long will it take for all the countries to put the regulation to make it happen.

It is true that some industry will feel the impact more then the others. International shipping, heavy manufacturing, energy, financial services will be more local. Technology industry will continue to be more global and will not be hit as hard from glocalization.

New budget proposal from the US administration has set the foundation for glocalization war around the world.

  • Government will start taxing the earning of foreign operation of the companies. This will have far reaching effect on the corporate structure and investors sentiment.
  • We should expect that there will be lot of pressure for creating local jobs across the world, meaning more protection centric policies.
  • GM will separate the Europe operation and SABB subsidiary, eventually leading to local government bailing them out. They are going to do this just to benefit US? Not really. There will be increase in import duty for luxury items such as cars, etc.
  • All the emerging countries, African nation, Eastern Europe will start shutting out China for production outsourcing in the future.
  • Banking industry will be much government owned – net result will be local financial services industry. US will create lot of noise, but no body will care.
  • UBS is the wild card. If this financial institution is shut, there will be lot of money that will go back to poor countries. Majority of illegal money belongs to politician and business people of poor or emerging countries.
  • US dollar will de-value significantly over next decade, making much of the out-sourcing irrelevant. US and Europe will continue to prosper because the quality of life is much better there.

Jan 2009 – I had written this before Obama budget was proposed.

World Economic Forum at Davos is in full swing. Politician, executives, policy makers, bankers are busy at Davos worrying about the impact of financial meltdown and how it may change the behavior of the countries to introduce protection, regulation mostly under pressure from the population, politician worried about getting re-elected, and domestic industry.

If governments are being expected to inject substantial amount of resources (tax dollars) to resurrect their economy, their new shareholders (the taxpayers) will demand that the resources are used to create local jobs.

Glocalization will be driven by people

There has been demand in US to force the companies to use local labor and products on stimulus related projects, There are protest across UK by energy workers against TOTAL bringing the foreign labor to build and operate plan in UK, Indonesia is taking the position that if pharma companies want to sell their drugs, they have to make them locally.  China, Russia mostly do not have to worry about this, because not only nobody is allowed to migrate there, but also because of the nature of their government. In any case mostly immigration is more prominent by the people in search of better  life style. Some countries will do more explicitly, some will do it softly and still preach the others that they should not do it depending on the local economic, and political environment.

Glocalization will accelerate the maturity of decoupling

One big lesson for the countries that have benefited in the last few years from the export economy, or commodity boom have learned that while you can generate surplus by sending your stuff to west, the IOU you get in return may not worth it.  Countries need to learn that they need to balance the export and import. Economic growth is not sustainable unless there is domestic consumption.

We all know that basic necessity of life can not be centralized. Is it possible to put all the clothes in a warehouse in China and every body in the world will feel dressed? Can you put all the food in storage in US and there will be no hunger anywhere in the world? Can you put all the cellphone in Nokia headquarter and everybody will be connected? Life demands Glocalization. Does it mean the era of globalization is over and the new era of Glocalization is about to start in a big way. Question is not if it will happen, it is just how long will it take for it to happen.

I sure hope big shots spend considerable time in Davos to discuss this issue rather then just rub shoulders.

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

How will America create 3M job in four years? March 5, 2009

Posted by Bipin Agarwal in Global Economy, IT Offshoring - Future Direction, IT offshoring and Real Estate development, Politics and economy, Quality of Living, Recession.
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Why Did America lost jobs and how the new jobs can be created. Everybody is asking.

America has lost more then  three million jobs in last two years. Everybody is worried about how many more jobs will be lost? What kind of jobs will be created by the Obama administration? Future economy will be energy economy, digital economy, or agriculture economy? Will job be created at all or it will be just political positioning? What effect the glocalization (not globalization) will have on US? Given that about fifty million jobs have been lost in the world and growing young population, is there a possibility of social unrest that will change the landscape of how world will look like in next few years?

Let us first look at  why and what kinds of jobs are being lost in America.

  1. Manufacturing Job Losses
  2. Service Job Losses
  3. Real estate construction
  4. Productivity Improvement
  5. Currency Arbitrage

Manufacturing Job Losses – Seems obivious to everybody. Low tech manufacturing jobs related to clothing, items of daily usage, applicance, what we use in kitchen, all these jobs are gone. Most of them moved to countries that have abundant labor and reasonable or good infrastructure. About a decade ago we started using high tech manufacturing, some of the R&D, etc to emerrging countries because of availability of talent in thouse countries, low cost primarily due to currency arbitrage, our concern for environment.

Service Job Losses – We started loosing service jobs about a decade ago.  It started with talent hortage such as Y2K and then expanded to broder area of Information Technology services, Call Center outsourcing, Business Process outsourcing. Key drivers for these job loss werer the availability of talent at much lower cost (currency arbitrage),  focus by business on bottom line, competition from global companies.

Real Estate Construction – Cheap credit combined with greed by business, home owners, failed regulation caused the real estate boom of unprecendent magnitude in America. Joe the Plumber, could make as much money as a college  graduate. Now that the construction has stopped, real estate (both commercial and residential)  is available for less then the cost of construction. Huge number of jobs have been lost. It will take at least five years to re-start the new construction activity at significant level unless there is dramatic change in the population, living style or some external unknown factures.

Productivity Improvement – There has been a great amount of productivity improvement as a result of technology changes that have occurred in last decade. Automation of supply chain, cell phone, IT applications have automated lot of task that were manual.  It had a big effect on corporate productivity and quality of life improved. Down side is that lot of job became redundant. Financial services company, health care company, retailer eliminated lot of jobs as a result of productivity improvement.

Currency Arbitrage – We in America enjoy the benefit of dollar as a world currency. We are able to afford more toys, electronics, cloths because they are made in the countries where currency is not strong compared to dollars. Corporation had no choice but to move these jobs offshore (read job loss) to give us the luxury.

What kind of Job American Can create? I have identified several different areas that will create the proclaimed 3M jobs in four years.

  1. Changing Family Structure
  2. Alternative Energy – production and maintenance
  3. Housing renovation – Energy efficiency
  4. Manufacturing – Next generation automobile
  5. Small business focus
  6. Real Estate & Infrastructure Development
  7. Information Highway
  8. Rural development – Agriculture economy

Changing Family structure – West pride itself into being a productive society with equal rights. What about responsibility, and duties. Is the purpose of life is just to get a job? what about family. West lot of unemployment is because both parents want a job. We all want to have a house and not home. A  family centric society will make our life experience more full filling, more time for kids, friend, and community. We will need less job.

Alternative Energy (production and maintenance) – renewable energy production based on solar and wind will not only reduce our dependence on imported oil but also create local jobs for creation and maintenance of these facilities.  This coupled with investment in energy infrastructure (smart-grid) will create significant jobs.

Housing renovation – Energy efficiency – Improvement in technology for solar energy combined with government incentives is making it feasible to install solar panel in houses and commercial buildings.  Retrofitting of existing real estate with solar panel and on-going maintenance will create jobs.

Manufacturing – Next generation automobile – Our Automobile industry that has been captive to oil industry and union is going through a much needed transformation. Since the government is investing significant money (tax dollars), we can expect that next generation automobile and associated will be produced in the country. Foreign company also realize this that is why they are setting up plants in America. After the restructuring, it should lead to new job creation.

Small Business Focus – Our capital market structure encourages big business at any cost. recent merger of Pfizer, wall mart, three big banks, are just few example.  We need to create more focus on small and medium business with local ownership. One Wall mart mega store can pretty much give you most of daily needs, is run by twenty to fifty employees earning low wages and busy making money for jet flying executives.  If each of the store is split into different departments and was locally owned with wall mart was just being the back end, that will keep more of the money at local level and create more jobs. What Wallmart has done to local store, Starbuck has done to local coffee shops, Inbev has done to local brewing, Best Buy to local electronic shops. Let America create more small and medium business that creates more local jobs and prosperity.

Real Estate & Infrastructure Development – Obama administration is allocating lot of money for highways and public transportation. People have learned that living in house where you have to pay big maintenance cost irrespective to your income, is not a great idea. We should see lot of interest in community living based on condos and apartment. This will be the next real estate boom. This will create jobs in construction industry.

Information Highway -We all appreciate the impact of highways that connected the different part of the country. People could see each other and caused a boom in travel, tourism, and movement of good. Same is true for information highway. Impact of information highway on our economy is not well understood yet. Productivity improvement, ability of people to think different is huge. Look at what Akamai and iPhone did to entertainment and publishing.  Look at what Ebay did to auction and Amazon did to books. Potential to create lot of new jobs.

Rural development – Agriculture economy – This is one of the area that has received the least attention in the 20th century.  Over crowded cities as a result of pursuing a dream of quick richness and fast lifestyle.  If you have a tractor, solar energy, access to information highway, few acres of land, few cows, opportunity to interact with friends and community. This is how large part of unemployed should be made productive. In the dream of Mahatma Gandhi, this was called village. American need to make rural area attractive and respectful. Creating a rich life using a Rural economy will be key to creating employment.

Conclusion – We need change at individual, community, business, and government level. We can create more jobs and at the same time, change our thinking and family structure so we do not  need so many jobs.  One of the significant reason that both member of the family have to work is because without that you can not pay your house mortgage, car mortgage, insurance (house, car, health care). If we align our needs based on family centric society, we will be much more happy family, community, and country. Sustainable community, sustainable business will create a lasting happiness.

If you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/about

Global Economy will accelerate significantly January 30, 2009

Posted by Bipin Agarwal in Global Economy, IT Offshoring - Future Direction, Politics and economy, Quality of Living, Real Estate Development in Global Economy.
2 comments

Next Twenty five years for the world will be significantly different from last one hundred years as far as economic growth and quality of life is concerned. There are lot of Think Tank (politically or business interest motivated), economist and so called expert and they like to predict the future based on past experiences related to recession and depression.  That is the path of least resistance, run some mathematical model and come out with the prediction. If you are right, then you are viewed as genious, if you wrong, people ignore. Current economic crisis is different from past, and future opportunity is also much larger because of the liklehood of broader consumer participation.

What is key difference in the past and future? Information flow and closing of the knowledge gap. World has yet to feel the real impact of internet and information flow as as  a result. We are still building the infrastructure and application for internet impact age. Internet infrastructure and associated applications will be in place in next few years. Just remember how car is a common means of transportation only in the developed world after fifty years. Full impact of this mobility around the world still has to be realized.

What are the three basic revolutionary changes in last several hundred years that will affect the masses and result into the economic growth.

  1. Invention of Clock – allowed us to capture the value of labor
  2. Personal/public transport vehicle – helped reduce the distance
  3. Internet – Information flow to masses

Impact of internet on economic growth will be more profound then any of us can imagine. Current global economic issues are just a blip. Here is why next twenty five years will see significant economic growth and improvement in average  Quality of Living of the world population.

  • Significant current economic problem is related to US and UK  credit crisis only because of  bubble in home prices, reckless spending by consumer, mis-management of policy by US government, social program, and wars.
  • Rest of world continues to save.
  • Internet is creating significant business opportunity for telecoms service providers, retailers, media company, manufacturing, and technology companies.
  • Alternative energy focus (wind and solar) will create significant business opportunity for energy companies, manufacture, service providers.
  • Non American world (Asia, central America, South America, Europe, Africa, and others) will have access to technology and infrastructure related to energy, transport, and internet that is available to only 20% of the world population currently.
  • Information availability will inspire people and will create significant need for consumption related to improving the quality of living. This will create significant opportunity for health care, organic farming, travel & tourism, electronics, real estate, etc.
  • World population is growing and will create significant opportunity for real estate and related service company to provide affordable housing.
  • Financial service sector will be core participant to this growth. All the business sectors require financing and financial sector will lead the growth beyond our imagination.

We should not confuse the global economic growth with the performance of stock market such as S&P, Nasdaq.  They are barely co-related. We can keep debating about the de-coupling of America with the rest of the world, the fact is that it has already happened. Just because at the present situation, stock market in Asia go down as the American stock market, it gives a false impression that there is no de-coupling. Just look, largest company market capitalization (China banks) are not even listed here. Not every company that will benefit from this opportunity will be listed on NYSE or NASDAQ.  Not every consumer that will participate in the economic growth is a resident of developed country.

If you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/about

Offshoring – Key element of business strategy in global economy June 12, 2008

Posted by Bipin Agarwal in Global Economy, IT Offshoring - Future Direction.
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Ask the question “What is offshoring” answer will depend on who you ask.

somebody from China – Move manufacturing to China, India – Move your IT work to India, Germany – Move your engineering to Germany, Russia – Move your satellite Launch to Russia, USA – Move your innovation to Silicon Vally and investment banking to Newyork.

Offshoring has been used for thousands of years. East India company went to India and started trading spices and cotton, etc. that is the situation where offshoring was used as part of business strategy.

How can global company use offshoring as a competitive advantage. Leverage the core competency of people in different part of the wold and also the natural resources that are available in different part of the world. However, that is the entry point. From there, learn the local culture, build operation and sell them your product and services customized for them. Future of offshoring will be defined by the companies that will use this as a entry point in a country and expand from there. Those who will use offshoring just for leveraging the cost differential, will continue to chase the cost advantage and be marginaly successful.

Currently some of the large technology company, Dell, HP, Financial services company such as HSBC, Citi, DB, consumer company, P&G, Sony are using offshoring the right way, others are just working on the cost differential. True offshoring strategy should be a long term competitive advantage.

If you have a question, about offshore strategy, feel free to ask.

http://www.redhawkinvestments.com

Bipin Agarwal
https://twentyminutelifestyle.wordpress.com/about/

IT Offshoring – Challanges of currency, inflation, infrastructure, and innovation May 28, 2008

Posted by Bipin Agarwal in IT Offshoring - Future Direction, IT offshoring and Real Estate development.
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IT offshoring has been a significant driver for lot of countries including India. Party will not last forever. Countries have to learn to justify the value proposition in the face of currency, inflation, infrastructure, and future technology innovation.

As economy gets stronger, currency is likely to get strong which in turn destroys the cost advantage. Inflation puts pressure on the companies to give pay raise, lack of infrastructure makes it hard to keep expanding the operation, and Business will stop seeing the value in offshoring.

Future of offshoring in these countries will be defined by providing innovative solution to above problem. One of the solution is to build a network of micro-cities that are safe, and self sufficient. Result is productivity improvement by eliminating the commute time, better quality of life, efficient land usage, and efficient usage of infrastructure spending.

One area that is being largely ignored by these offshoring destination is how to stay relevant in the wake of future technology innovation. Let us say lot of transaction processing is being moved to some of these offshore center. what happens to these operation when transaction processing gets automated?

http://www.redhawkinvestments.com

Bipin Agarwal
https://twentyminutelifestyle.wordpress.com/about/