So Obama is in the coveted seat finally.
And after all the celebration of the black man moving into the White house, now the who's who of India Inc. is sitting up to see what this revolution means to them. In particular sweat are the IT/ITeS guys who worry that Obama's anti-offshore stand would affect their glorious run for a long time.
Their concerns are filled with reason. The new President has promised to punish those companies who send American jobs offshore. After all, the democrats are a labor party. And how can their President not listen to the socialistic calls? I have seen lot of Op-Ed columns in recent days blaming Obama for not taking a leadership stand when it comes to offshoring issues, but just succumbing to partisan politics and short term benefits.
A couple of days back at a social gathering, one of my acquaintances, who is a Senior VP with India's largest tech services company, said that the IT future of India looks bleak and maybe we will go back to pre-2000 days. Though the companies would remain profitable, he added that the margins will shrink, hiring will slow down and growth will not be at amazing numbers like before. A few people asked me what my take was.
Yes. We don't have a rosy picture for India now. Economic meltdown, Mumbai attacks, Satyam fiasco, Obama in the White house - infact it looks like when it rains, it pours!. So many anti-effects for India-IT.Com.. Yeah, the picture isn't good and analysts sentiments are real bad. Infact even after good results, a few IT companies stocks have been downgraded by analysts because the future is uncertain and current performances are largely because of currency fluctuations.
But lets put analysts away for a while. Business and world do not run by what media or analysts "think". Evaluating future of IT companies of India by analyst sentiments is lequivalent to saying that the Fed should form its operating principles based on what gamblers in Atlantic City or Las Vegas "think".
As much as we talk about problems of globalization, the inequalities created because of such moves (and I am a very strong subscriber to that faith), the (unfortunate) truth is that nobody is in control of globalization. It is not a phenomenon that you can stop by pushing a button. Obama may sit in the Oval office and proclaim himself as the World's most powerful man, but neither he nor anyone has the power to stop globalization. The world is shrinking at such a rapid pace that competitve advantages will overcome absolute advantages over a very short period of time.
If Obama thinks that he can "control" offshoring, by offering tax breaks to those who dont offshore and "punishing" those who do, he is simply trying to cover his eyes and claim that the Sun is gone. US has been doing this kind of manipulation in several sectors (like Textiles, or Fisheries for example); but in a matter of time, companies will stop buying this. You cannot control offshoring by these kind of laws. If he is serious about improving jobs in America, Obama would rather focus on building education platforms, control cost of living and make labor freely available with necessary talent.
By enacting laws to prevent offshoring, Obama will enable only weaking of companies who struggle to survive without quality labor or who struggle to live with high cost labor and finally end up offshoring anyway or worse, close shop or lose to competition from rest of the world.
So my take on this matter is that, Obama can do what he wants to do - the Indian IT will not face any crunch as long as we are backed my good educational institutions, great talent and of course, comparitively cheap labor. If we are worried with stock downgrades, I think we should conveniently stop worrying - as the analysts who do these funny acts really are playing without getting the big picture. After all, the analysts are gamblers - Do you still listen to them?
And after all the celebration of the black man moving into the White house, now the who's who of India Inc. is sitting up to see what this revolution means to them. In particular sweat are the IT/ITeS guys who worry that Obama's anti-offshore stand would affect their glorious run for a long time.
Their concerns are filled with reason. The new President has promised to punish those companies who send American jobs offshore. After all, the democrats are a labor party. And how can their President not listen to the socialistic calls? I have seen lot of Op-Ed columns in recent days blaming Obama for not taking a leadership stand when it comes to offshoring issues, but just succumbing to partisan politics and short term benefits.
A couple of days back at a social gathering, one of my acquaintances, who is a Senior VP with India's largest tech services company, said that the IT future of India looks bleak and maybe we will go back to pre-2000 days. Though the companies would remain profitable, he added that the margins will shrink, hiring will slow down and growth will not be at amazing numbers like before. A few people asked me what my take was.
Yes. We don't have a rosy picture for India now. Economic meltdown, Mumbai attacks, Satyam fiasco, Obama in the White house - infact it looks like when it rains, it pours!. So many anti-effects for India-IT.Com.. Yeah, the picture isn't good and analysts sentiments are real bad. Infact even after good results, a few IT companies stocks have been downgraded by analysts because the future is uncertain and current performances are largely because of currency fluctuations.
But lets put analysts away for a while. Business and world do not run by what media or analysts "think". Evaluating future of IT companies of India by analyst sentiments is lequivalent to saying that the Fed should form its operating principles based on what gamblers in Atlantic City or Las Vegas "think".
As much as we talk about problems of globalization, the inequalities created because of such moves (and I am a very strong subscriber to that faith), the (unfortunate) truth is that nobody is in control of globalization. It is not a phenomenon that you can stop by pushing a button. Obama may sit in the Oval office and proclaim himself as the World's most powerful man, but neither he nor anyone has the power to stop globalization. The world is shrinking at such a rapid pace that competitve advantages will overcome absolute advantages over a very short period of time.
If Obama thinks that he can "control" offshoring, by offering tax breaks to those who dont offshore and "punishing" those who do, he is simply trying to cover his eyes and claim that the Sun is gone. US has been doing this kind of manipulation in several sectors (like Textiles, or Fisheries for example); but in a matter of time, companies will stop buying this. You cannot control offshoring by these kind of laws. If he is serious about improving jobs in America, Obama would rather focus on building education platforms, control cost of living and make labor freely available with necessary talent.
By enacting laws to prevent offshoring, Obama will enable only weaking of companies who struggle to survive without quality labor or who struggle to live with high cost labor and finally end up offshoring anyway or worse, close shop or lose to competition from rest of the world.
So my take on this matter is that, Obama can do what he wants to do - the Indian IT will not face any crunch as long as we are backed my good educational institutions, great talent and of course, comparitively cheap labor. If we are worried with stock downgrades, I think we should conveniently stop worrying - as the analysts who do these funny acts really are playing without getting the big picture. After all, the analysts are gamblers - Do you still listen to them?
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