Bhaskar

http://www.thestar.com/NASApp/cs/Con...l=969048863851

Canada fifth-best 'offshore' destination
Practice can shave costs by up to 30%
R&D tax credits attract telecom firms


TYLER HAMILTON
TECHNOLOGY REPORTER

Canada ranks among the top five places in the world for communications
providers to "offshore" call-centre and information technology
operations, according to a study by Deloitte & Touche LLP.

Despite the strong ranking, domestic hotspots such as New Brunswick
have a long way to go before catching up to New Delhi.

"India is currently in a class by itself," concluded Deloitte,
pointing out that a combination of low wages, highly educated workers,
a good work ethic and strong English-language skills have placed India
far ahead of the global pack as an offshore haven.

Canada's main attraction is our research and development tax credits
for companies that intend to develop products here, said André
Vincent, head of telecom for Deloitte in Canada.

Offshoring is a term for shifting or outsourcing routine business
processes to other countries to save costs and boost productivity.

The gap between India and the rest of the world is immense. About a
quarter of respondents said India was their top choice, while
second-place China interested only 5 per cent. Canada was in fifth
place at 2 per cent, behind Mexico and Eastern Europe.

The study, based on a survey of 42 telephone, cable and wireless
operators around the globe, found communications companies that have
already shifted some operations offshore, such as customer support
centres, are saving 20 to 30 per cent annually.

The industry is expected to save $14.5 billion (U.S.) a year by 2008
through offshoring strategies, according to Deloitte.

Within four years, at least 275,000 telecommunications industry jobs a
year are expected to go to overseas locations.

With an election looming, the larger issue of offshoring has become a
political hot button in the United States, where politicians and
industry groups have warned of massive job losses and the long-term
impact on the economy. Democratic presidential hopeful John Kerry has
used the term "Benedict Arnold" to describe chief executives who have
moved technology and business-process jobs overseas.

New legislation, such as the Defending American Jobs Act, has been
proposed in an attempt to stem the loss of jobs to locations such as
India and China, where American companies such as Hewlett-Packard Co.,
Yahoo Inc. and Electronic Data Systems Inc. are setting up call
centres and hiring programmers.

Federal Reserve Board chairman Alan Greenspan warned this month that
such protectionist measures could spark a trade war and create a
culture of complacency that would ultimately do more harm than good to
the U.S. economy.

Canada, meanwhile, seems to be playing to U.S. fears. A federal
government brochure distributed through Canadian consulates promotes
Canada as a strong alternative to India and China because of cultural
compatibility with the United States.

Peter Thompson, president and chief executive of Calgary-based RIS
Resource Information Systems Inc., an applications support company,
said matching time zones, our close proximity and our cheaper dollar
offer a "near-shore" alternative to offshoring that comforts some U.S.
executives.

"If you look at Canada versus India or Romania, it's more expensive
per person, but there's a lot more that goes into the equation,"
Thompson said.

A study last year by A.T. Kearney ranked Canada as the second-best
place to offshore â€

Ashok

Few things

1) Canada is distant fifth from India,for low cost back
office offshoring activity. Gap is increasing.

2) Canadian $ rise is
much steeper as comapred to Indian Rupee >>> vs. US$. 30% saving can be
soon wiped out.

3)India has growing large pool of English speaking
young skilled labour, Canada will depends on immigration program to
sustain any such activity.

50% of Canadian skilled immigrants can not
speak English as well as French. That will be major handicap. They can
be low cost machine operators.

4) India is moving up on Value chain,
they are taking up higher end offshoring. India is already into
autoparts design R&D for global majors / Pharmeceutical molecule
development / large scale integrated circuit design ( Intel R&D centre
is in India ) Intel has manufacturing bases out of US . This R&D centre
is the only one outside US.

4) Software development offshoring is
already growing and has a long way to go.

5) Defence research
offshoring tie ups are next on cards.

Hence US offshoring presence
into India is going to grow and it will make US Economy more competitive
against many other competing economies. That is the catch.

It is clear
    >>> US MNC's know which way to go.

It is upto other competing economies
to find an answer to this shift.

US has to reduce it trade deficiet
and India has a lot to buy from US , India is pretty close economy and
it works as a win win situation for now. where as Canada /US Economy is
already open door, I wonder what more US has to sell to Canada.

I
believe Canada at number 5th position means nothing special.

Many low
key offshoring jobs wiil be replaced by Computers only. ( They can be
placed and maintained within US or may be offshore).This will , once
again shrink the low tech offshoring. That is the reason GE is planning
to move out of callcentres and plans to have exclusive R&D offshoring
base , for the first time out side US.

Bhaskar

    > 1) Canada is distant fifth from India,for low cost back
    > office offshoring activity. Gap is increasing.

But still some jobs do need close proximity to US and also might need
travel to US on short notice for short periods and better time zone
coordination.

    > 2) Canadian $ rise is
    > much steeper as comapred to Indian Rupee >>> vs. US$. 30% saving can be
    > soon wiped out.

Work is done more inefficiently in india...predominantly due to
mismanagement
(most important reason) and other things....

Its a falacy that lowest wage is the best place for production. There
are other facters to it. If lower wages had been teh sole criterie ,
factory production should have long moved from China to countries in
Africa.

    > 4) India is moving up on Value chain,
    > they are taking up higher end offshoring. India is already into
    > autoparts design R&D for global majors / Pharmeceutical molecule

actualy hardly any research is going on pharma side. most are into
reverse
engineering going out of patent drugs and producing generics.

    > development / large scale integrated circuit design ( Intel R&D centre
    > is in India ) Intel has manufacturing bases out of US . This R&D centre
    > is the only one outside US.

I know people in intel india as well. they mainly do verification work
of
some low end chips. chip designing often needs close to 6 to a decade
of
experience.

Dont give much attention to what they write in indian news papers.
most of the authors are highly ignorant about the industry/technology.
India is
typically in very low value addition end of the IT industry
(2% of global IT developement)

Ashok

Bhasker
One thing is for sure, today Indian economy is no match to US.


But it is good, once it is realized that India is no more selling
commodity to US( such as cashew nuts). India is competing well with
regional Asian economies. Has foreign exchange reserves of 110 billion
US$.

Today India has one full Canada population having Mobiles and it
is moving up with double digit growth.

1 Billion US$ , TCS INDIA is no
match to 60 Billion IBM.
But it is a great relief that Indian services
are moving up on value chain. TCS/WIPRO/Infosys are growing and are on
hiring spree.

Almost every city is moving into optical fiber
connectivity.

Car sales is growing by 27%.

Intel India or Adobe India
might be doing low tech jobs in hardware and software , but they are the
ones , who are here in India , having hired local talent to do the jobs,
outside of US.

GE call centre concept in India dates back to 1995. Now
it is unstoppable reality for rest of the competing MNC's.

Even
Bombardier Canada is planning outsourcing of its executive jet plane
parts to India.

New product design is definitely moving ahead.

You
might be aware of two Biotech laboratories in India, working on stem
cell research. one is owned by Reliance India. Both are doing original
work. No reverse engineering.

Remember Reliance India refinery at
Jamnager is Worlds largest grass root refinery (Yes 27 million ton/year
refining at one place is not a joke)

By now all major car manufacturers
are outsourcing from India. This trend is moving up, not down.

Tata
steel, is amongst worlds only 5 major, automobile sheet manufacturer in
quantity and quality.

Although, It is long way to go, India is no more
an Elephant condemned to be dying in sleep. It is up to us to open up
more business opportunities. Competition is intense. I will agree.

In
my notes above I compared Canada vs. India as far as software related
outsourcing was concerned. I will emphasize, Canada should not lags
behind in making use of English speaking Indian talent through
immigration route or by direct outsourcing to India., It has double
advantage.

Unlike China, India has a highly mixed gene pool and new
drug testing and product launch is indeed catching up. That is another
frontier in the list of outsourcing.

I wonder why the article compares
Canada vs. India.
Canada is not competing with India , but they are
competing with the developed world to stay competitive within a
different domain. India is assuming an important position in this supply
chain, through a different domain.

While saying above I am fully
aware of the fact that India is 5th largest world economy and canada is
13th largest, in terms of GDP. Even than Canada is way up on HDI as
comapred to India.


Refer to CIA web site

]http://www.cia.gov/c-
ia/publications/factbook/rankorder/2001rank.html[/url]






Originally posted by Bhaskar
    > > 1) Canada is
distant fifth from India,for low cost back
    > > office
offshoring activity. Gap is increasing.
    >
    > But still some jobs do
need close proximity to US and also might need
    > travel to US on short
notice for short periods and better time zone
    > coordination.
    >
    > 2) Canadian $ rise is
    > > much steeper as comapred to
Indian Rupee >>> vs. US$. 30% saving can be
    > > soon wiped
out.
    >
    > Work is done more inefficiently in india...predominantly
due to
    > mismanagement
    > (most important reason) and other things....

    > Its a falacy that lowest wage is the best place for production. There

    > are other facters to it. If lower wages had been teh sole criterie ,

    > factory production should have long moved from China to countries in

    > Africa.
    >
    > > 4) India is moving up on Value chain,
    > >
they are taking up higher end offshoring. India is already into
    > autoparts design R&D for global majors / Pharmeceutical
molecule
    >
    > actualy hardly any research is going on pharma side.
most are into
    > reverse
    > engineering going out of patent drugs and
producing generics.
    >
    > > development / large scale integrated
circuit design ( Intel R&D centre
    > > is in India ) Intel has
manufacturing bases out of US . This R&D centre
    > > is the only
one outside US.
    >
    > I know people in intel india as well. they
mainly do verification work
    > of
    > some low end chips. chip designing
often needs close to 6 to a decade
    > of
    > experience.
    >
    > Dont give
much attention to what they write in indian news papers.
    > most of the
authors are highly ignorant about the industry/technology.
    > India is
typically in very low value addition end of the IT industry
(2% of
global IT developement)

Infocan

my few cents on these thoughts....

(Bhaskar) wrote in message news:<>...
    > > 1) Canada is distant fifth from India,for low cost back
    > > office offshoring activity. Gap is increasing.
    >
    > But still some jobs do need close proximity to US and also might need
    > travel to US on short notice for short periods and better time zone
    > coordination.

This is short notice travel seems true to small extend. But it really
did not effect much on big deals projects. Also -) world is go get
closer with scramjets

    >
    > > 2) Canadian $ rise is
    > > much steeper as comapred to Indian Rupee >>> vs. US$. 30% saving can be
    > > soon wiped out.
    >
    > Work is done more inefficiently in india...predominantly due to
    > mismanagement
    > (most important reason) and other things....
    >
    > Its a falacy that lowest wage is the best place for production. There
    > are other facters to it. If lower wages had been teh sole criterie ,
    > factory production should have long moved from China to countries in
    > Africa.

One is right .. Low wage is certainly not the only reason
international jobs are sticking/rising in india. High quality
delivery mechanism is must for customer satisfaction. Plus concept of
extreme programming( where customer changes are very much incorporated
much after the requirement docs freezes)
    >
    > > 4) India is moving up on Value chain,
    > > they are taking up higher end offshoring. India is already into
    > > autoparts design R&D for global majors / Pharmeceutical molecule
    >
    > actualy hardly any research is going on pharma side. most are into
    > reverse
    > engineering going out of patent drugs and producing generics.
    >
    > > development / large scale integrated circuit design ( Intel R&D centre
    > > is in India ) Intel has manufacturing bases out of US . This R&D centre
    > > is the only one outside US.
    >
    > I know people in intel india as well. they mainly do verification work
    > of
    > some low end chips. chip designing often needs close to 6 to a decade
    > of
    > experience.
    >
    > Dont give much attention to what they write in indian news papers.
    > most of the authors are highly ignorant about the industry/technology.
    > India is
    > typically in very low value addition end of the IT industry
    > (2% of global IT developement)

On this count I would say , high value r&d work is indeed coming up in
india. No wonders my freind gets his name on the patents while working
for TI banglore. Thay are slow to come but are coming fast. A nokia
telecom product ( changes in existing hardware & complete new software
is what I am into. Product will be sold in US /europe market soon.

Ashok

Some known facts, not from press.
In 1995 my friend was visiting US ,
every qtr, for palm top OS.

Currently one of my acquaintance goes to UK
to reduce backlog in surgery. He performs critical operations in UK and
flies back every fortnight to take care of his Indian patients.

My
senior, currently involved in pharma bussiness , is a regular supplier
to US for last 15 years now, no one might see his company name on yellow
pages.

see this link for GM R&D centre , first outside US.

http://economictimes.indiatimes.com/...how/561809.cms


See this link for GE R&D centre in India.
]http://mailman.mit.edu/pipermail/sangam-general/2002-
February/000351.html[/url]

It is one of three R&D centres outside US.

It employs 800 Ph.D's !!!
It gives internship to MIT undergraduates
also.

The whole problem is 1 billion population.
This denominator ,
drags everything in the numerator near to ZERO!!

Originally
posted by Infocan
    > my few cents on these thoughts....
    >
(Bhaskar) wrote in message
news:<>...
    > > > 1)
Canada is distant fifth from India,for low cost back
    > > >
office offshoring activity. Gap is increasing.
    > >
    > But still some jobs do need close proximity to US and also might
need
    > > travel to US on short notice for short periods and
better time zone
    > > coordination.
    >
    > This is short
notice travel seems true to small extend. But it really
    > did not effect
much on big deals projects. Also -) world is go get
    > closer with
scramjets
    >
    > >
    > > > 2) Canadian $ rise is
    > >
    > much steeper as comapred to Indian Rupee >>> vs. US$. 30% saving can
be
    > > > soon wiped out.
    > >
    > > Work is
done more inefficiently in india...predominantly due to
    > >
mismanagement
    > > (most important reason) and other
things....
    > >
    > > Its a falacy that lowest wage is
the best place for production. There
    > > are other facters to
it. If lower wages had been teh sole criterie ,
    > > factory
production should have long moved from China to countries in
    > Africa.
    >
    > One is right .. Low wage is certainly not the
only reason
    > international jobs are sticking/rising in india. High
quality
    > delivery mechanism is must for customer satisfaction. Plus
concept of
    > extreme programming( where customer changes are very much
incorporated
    > much after the requirement docs freezes)
    > >
    > > 4) India is moving up on Value chain,
    > > > they are
taking up higher end offshoring. India is already into
    > > >
autoparts design R&D for global majors / Pharmeceutical molecule
    >
    > > actualy hardly any research is going on pharma side.
most are into
    > > reverse
    > > engineering going out of
patent drugs and producing generics.
    > >
    > > >
development / large scale integrated circuit design ( Intel R&D
centre
    > > > is in India ) Intel has manufacturing bases out of
US . This R&D centre
    > > > is the only one outside US.
    >
    > > I know people in intel india as well. they mainly do
verification work
    > > of
    > > some low end chips. chip
designing often needs close to 6 to a decade
    > > of
    > experience.
    > >
    > > Dont give much attention
to what they write in indian news papers.
    > > most of the
authors are highly ignorant about the industry/technology.
    > >
India is
    > > typically in very low value addition end of the IT
industry
    > > (2% of global IT developement)
    >
    > On this
count I would say , high value r&d work is indeed coming up in
    > india.
No wonders my freind gets his name on the patents while working
    > for TI
banglore. Thay are slow to come but are coming fast. A nokia
    > telecom
product ( changes in existing hardware & complete new software
is what I
am into. Product will be sold in US /europe market soon.

Bhaskar

    > The whole problem is 1 billion population.
    > This denominator ,
    > drags everything in the numerator near to ZERO!!


You are very correct about the above

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