Memo from India - Day 3
by Roger Cranville, Pittsburgh Regional Alliance
Pittsburgh Business Times
A delegation from the Pittsburgh regional business, civic and economic development community has embarked on a weeklong business trade mission to India organized by the Pittsburgh Regional Alliance, an affiliate of the Allegheny Conference on Community Development. While in India, PRA Senior Vice President of Global Marketing Roger Cranville is writing this mission diary for the Pittsburgh Business Times.
This dispatch was filed Thursday, Feb. 14
Summarizing the view of the group thus far, the Indian economy is booming (9 percent growth per annum), business is profitable (one person told us today that businesses in India are returning on average 20 percent profit margins), and the infrastructure is creaking. All of this adds up to opportunity, opportunity, and opportunity for companies in the Pittsburgh region.
It is hard to get your arms around what is happening in India -- the growth is so phenomenal you can almost taste and feel it. As someone said today -- "companies must have an India and a China strategy these days or they are going to miss out on a great business opportunity." Indian companies are ready to team up with U.S. companies if it gives them some advantage in the market. And with 350 million "customers," India is a viable and growing market for quality U.S. goods and services.
Bangalore has returned to its normal low humidity and perfect temperature of low- to mid-70s today. The traffic was also kinder than yesterday, helped by the road being finished as we went south, so to speak. Slogans yesterday, statistics today -- lots of statistics. Here are a few to make you think:
_ 260 million mobile phones in India growing by 8 million per month
_ 14 million houses being built by 2010
_ India will be the fourth-largest global economy by 2025
_ 350,000 technical graduates per year
_ 1.6 million jobs in IT/Business Process Outsourcing (BPO)
_ IBM and Accenture are the largest two IT/BPO companies in India
_ IBM makes one new hire every eight minutes in India
_ Per capita income is approximately $850 per year
_ 2 percent of the population pays income tax (34 percent)
_ $450 billion being spent on infrastructure by 2012
The day was spent with KPMG, Infosys (quite a campus experience), a hospital visit, and with Feedback Consulting (a group that knows Pittsburgh and stands by to assist Pittsburgh companies with their India strategies).
KPMG Bangalore fielded a team of three to brief the Pittsburgh group and focused in on our region's opportunity with India. Here are a few highlights:
_ By 2035, demand in India is expected to exceed the United States.
_ New foreign direct investment and homegrown companies are powerful allies expanding the India economy.
_ Special Economic Zone's are fueling growth in telecom, financial services and IT. _ The Indian government plans to spend $250 billion (of the $450 billion infrastructure spend) on energy by 2012.
This represents a good opportunity for the Pittsburgh region. State electricity boards are still wrestling with 32 percent "leakage" or, in other words, illegal tapping of kilowatt hours by those who feel electricity should be free.
_ India is building 10 new cities, where public private partnerships will be core to the final product.
_ A global economic slowdown will have 1-2 percent impact on this economic ship going at full speed ahead.
And five major global risks for India were identified as: Global Weather Change, HIV/TB, contaminated water resources, oil price shocks, and terrorism.
While most of us were at KPMG, Girish Godbole of UBICS Inc. and TiE Pittsburgh (our region's chapter of a global not-for-profit network dedicated to the advancement of entrepreneurship) and John Denny of The Hillman Co. ventured out to explore India's healthcare sector. They visited a new, 1,000-bed private hospital specializing in cardiac care -- Narayana Hrudayalaya (which means House of Heart). The hospital performs 30 open-heart surgeries a day, with an emphasis on children.
The brainstorm of Dr. Devi Shetty, a pioneer in India's thriving telemedicine market, Narayana Hrudayalaya is only one of what will eventually be five specialty hospital campuses dubbed 'Health City' in Bangalore. The campuses will provide up to 5,000 beds. According to Dr. Shetty, "we need to build the healthcare delivery infrastructure first in India, then all else will fall into place." He has already built an eye hospital and will soon complete the cancer hospital.
Of particular interest to Pittsburgh should be Dr. Shetty's next hospital, dedicated to women and children. This 500-bed hospital will be led by Dr. Ashley D'Cruz, with whom Girish and John met during their visit. In a country that has 29 million births a year, a woman and children's hospital is desperately needed.
Committing to a high-growth, long-term investing partnership with India, Pittsburgh hospitals could gain a strong foothold in a large and fast growing market.
Later in the day, the group moved on to campus Infosys, a company that is sustaining 30 percent growth per annum. Future sustained growth is hampered by the availability of talent (Or is it the growing competition for talent?) despite 75 million graduates per year. Touring the campus -- one of 14 that Infosys has in nine Indian cities -- by deluxe, eight-seater golf cart is more like a drive through a futuristic movie set than a modern day workplace.
Like iGate, the band strikes up weekly and these high-energy employees are given every reason to stay put and not go home. The 44 hour minimum work week and all modern conveniences, from shopping to banking, a hotel and entertainment (the convention center is under construction) see to it that going home is almost unnecessary.
It's been an enlightening week so far with so much to take in and so many opportunities to take back home and share with businesses in the Pittsburgh region.
Enough for one day, more to come tomorrow ...