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Puneet's response: misdirected: Re: Indiresan: a critique (fwd)

Puneet sent me this by mistake, I think. This was surely meant for the
list. So here goes: back to the list...

---------- Forwarded message ----------
Date: Tue, 12 May 1998 13:44:14 -0700 (PDT)
From: Puneet Singh <psingh@scdt.intel.com>
To: sabhlok@almaak.usc.edu
Subject: Re: Indiresan: a critique

Good to hear that we are on agreement. The tougher question to answer
is how much to invest in each sector wrt govt incentives to promote
that sector. And thats just in terms of research, tax breaks, financial
backing. Like I said, I believe it needs an ROI calculation. Investing
in a sector that can provide leadership, atleast regional if not global
has prospects of long term benefits. Also such benefits percolate to all
segments only after a spin off economy growth. Many sectors require
intensive supporting companies to survive and grow. So manufacturing
aircrafts to compete markets of even semiconductor chips is very costly
and infrastructure intensive to begin with. However what India can do
is take lead in service sectors and new areas where its a level playing
field. So even if we cannot manufacture planes, microprocessors we can
design them and get them manufactured with partners who can. There is not a 
single product in market today that does not involve intensive design.

To address the question of brain drain or how do we retain people who are
capable of doing these jobs: as in any other case its a competetive global
market that tries to attract skill set by providing incentives and reward.
The goverment makes a conscious decision when choosing between building
infrastructure to promote a class of industry. A classic example is ISRO.
It was funded in research by govt. The organization was given a specific
task/project and autonomy to work with people with the right skill set
leading projects and not govt appointed. Supporting industry grew just based
on needs of the project. 

Further high tech industry needs free access to all international partners.
So if we set up a company in India we cannot do well if the government
taxes 10X% to import whatever the needs of the firm are. I will not even
attempt to answer the question how do we prevent brian drain. Its a tough
question that involves economics, nationalism and faith that are more
opinions than solutions.

But I'm in full agreement on the subject that the core sectors need a more
intensive and immediate push. However innovation and invention in these
fields is equally important. Trust me reverse engineering is very much
part of any development flow even today and a very thought provoking
and challenging task. It involves examination, learning and improving on 
them. And when we open up to global markets every little idea has been 

On companies such as IBM, Intel, Boeing coming to India :
There is no magic wand that will attract or retain brians other
than a real commitment and action that shows promoting these sectors. Some
of the states seem to have shown some promise like AP, Orissa. What India
has to offer to these companies is an equal workability in India i.e.
provide the infrastructure (atleast locally), tax incentive etc.

I feel weary of writing on what needs to happen, because truthfully many
of us know all this very well. The tougher part is execution, will
power to stick to an agenda. A boost in economy will naturally see growth
in potential areas. 

Let me put it this way: if I was to set up a company of my own in India
I would like some infrastructure to support business, free access to 
whatever the business needs were from international waters at a fair price
(even incentives if starting a business there is more costlier for me
than California where I can drive to my customer, supplier) and maybe
some univ research (its helpful to team with univs when thay have
some expertise in a certain field). An example that comes to my mind
from UG days is when we were working on a fiber optic communication circuit
that CDOT was interested in. A colleague of mine has an idustry of his
own now in Hyderabad doing similar stuff. Thats no copying. Thats a totally
industry need based research. Thats a business sector. If provided with
financial backing and freedom from the red tapism such innovation can work.

BTW, to dispell a much misinformed notion: from my batch of IITK graduates
after a survey we found about 50% are finally here, 10% got into IIMs etc,
10% in administrative services, ~30% in some technical job in India.
And we had a batch of ~200. That doesnt account for the million in the US.