It is great to see Goa on the technology map. Ironically, I am in Hsinschu, Taiwan at the moment, a few hundred meters from D-link�s main production center over here. Taiwan has been incredibly successful in developing its semi-conductor industry. Hsinchu is Taiwan�s equivalent of America�s silicon valley and Goa�s modest Verna Industrial park. The government did a lot of things right here � it provided the infrastructure, had a good university close by and cultivated close ties with US industry. But, then, it tried to replicate this successful model in another Science park called Tainan � but by most measures it has failed to duplicate the success of Hsinchu. The article fails to mention one set of ingredients that is critical for success, but which is very difficult to predict or control � timing and good luck. Governments cannot do it all. One big reason for Hsinchu�s success was that it positioned itself as a low cost high technology center starting in the mid 80�s, just when the tech boom was beginning to explode. Tainan came in at the tail end, just when the torrent of outsourcing began to move to mainland China, coupled with the ongoing technology depression.
In the US, and in the tech industry in particular, outsourcing to India (and China) has become mantra. In the 1980s, the talk was all about moving production to Mexico. Some polititians talked about the giant sucking sound of America's industrial capacity moving south of the border. Today even the Mexicans (and India) has to deal with the intense competitive pressure from manufacturing in China. Many, however, seem to suggest that the long term economic challenge posed by India to the west is even more insidious. So what if a lot of the manufacturing capacity was moved to Mexico and then to China - after all, there was very limited knowledge transfer out of the country. Furthermore, it forced the US to adapt to the new realities of lower costs overseas (unlike perhaps much of western Europe or Japan) and forced it to move on to new, more prosperous economic avenues. Today, a lot of IT, financial and customer related services are being moved to India. Again, not a big deal as far as the US is concerned - it is cheaper than having to import labor from India. There is of course a lot of pain, with a lot of pre-existing jobs in the US being lost to the cheaper but equally productive Indian worker. The "problem" is that many companies are also moving a lot of their R&D to India. Companies like GE, Intel, Oracle etc are vastly expanding their R&D facilities in India. Ask any professor from a reputable engineering university in the US and they will generally admit that most of their best students are Indian (invariably from an IIT). Ironically, India�s inability to provide a decent education for a bulk of its population has resulted in severe competition to get into its top-notch universities, which has resulted in this hyper-educated elite, which is highly prized in the west. For the last 40 years, the US industry (via its universities) simply imported these workers to the US. They are now realizing that they can utilize this resource even cheaper by simply getting their work done in India. As we all know, it is ironic that while countries like the US long ago recognized the value of India�s educated elite, most Indian companies did not or were unable to do so. Happily, even this is changing today, with many Indian companies gaining the confidence (or the ability) to invest in R&D to create their own products and services. Take for example Tata and its Indica automobile. This is by no means a cutting edge product, but it invested in developing its own internal technical capabilities to develop this car. To be fair, India has had decent R&D capabilities for a long time, but most of it was limited to the relatively minor military-industrial complex. Commercial R&D in India is still at an infancy stage and it will probably be at least a decade if not much longer before the business of intrinsic knowledge creation becomes significant here. Another issue is the �quality� of the R&D. What is cutting edge for one country may be on the path of become generic in another country. Sure, India is currently producing great engineers and IT talent, but this assumes that these services will continue to remain on the bleeding edge of the intellectual knowledge and economic value chain. However, it is possible that the next drivers for knowledge may lie in health care, biotechnology or issues related to the environment or who knows what. The rich fast growing aging population in the developed world may soon begin to put greater economic value to these issues rather than the horsepower ratings of their cars or the mhz rating of their computer. If this is the true, then the so-called migration of R&D to India may not be as cataclysmic (to the west) as it seems. Only time will tell. Marlon --- "Frederick Noronha (FN)" <[EMAIL PROTECTED]> wrote: > Do you agree with the perspective below? Tell us why > (or why not) at > [EMAIL PROTECTED] --FN > > D - L i n k ' s v i s i o n , G o a ' s g a i > n > > Infrastructure is by no means the only > factor that determines the success of > a company. Nonetheless it is one of the > most crucial factors on the back of the > management's mind -- be it access to > highly skilled people or advanced > telecommunications capacity or something > as banal as power availability. We take > a look at D-Link India's experience in > establishing its manufacturing plant in Goa. > > WHEN D-LINK TAIWAN was considering taking up a stake > in Smart Link India and > setting up D-Link's Indian subsidiary, the company > assured Smart Link's > promoter K R Naik that a joint venture would take > place only after > satisfactory commissioning of the project as per its > stringent standards. > > The company's first facility in Goa, to manufacture > networking products, was > set up at the Verna Electronics City promoted by the > Goa Industrial > Development Corporation (GIDC). When D-Link > Corporation delegates visited > India to close the deal two years later, they were > impressed with the > facility. > > Let's take a look at the infrastructure requirements > at D-Link's facility in > Goa and see how the state fares on this front. > > LAND > > For D-Link's manufacturing facility, land at the > Verna Electronic City was > made available by the GIDC as part of its agenda to > promote the > industrialisation of Goa. Plant 1 was built over a > 20,000 sq.ft area. Plant > 2 was subsequently built over 30,000 sq ft area, > while Plant 3 was > commissioned on an adjoining plot measuring 70,000 > sq ft. Thus land was > never a restriction for growth. Also, the land rates > offered were reasonable > and not as expensive as in some other state IDCs. > > TAXATION > > D-Link India was offered a five-year Income Tax > exemption (for manufactured > items) apart from a 10-year Sales Tax exemption > offered by the government of > Goa. Similar exemptions were offered on the set-up > of the second and third > manufacturing plants in 1999 and 2001. > > TELECOM > > As yet, Goa's telecom infrastructure is nothing to > write home about. Data > leased lines are available through Goa Telecom and > D-Link has availed of > this facility to connect the Goa plant to its Mumbai > headquarters and > Bangalore set-up. Though the available leased line > is sufficient for a > manufacturing facility, it would be insufficient for > a service facility > where the amount of data and voice communication is > huge. International > private lease circuits presently do not land at Goa > and IPLC gateway is not > available. > > TRANSPORT > > The IT industry is greatly concentrated in the West > and South of India and > Goa being centrally located with respect to these > regions and being one of > India's favourite tourist destinations, > transportation is the least of > worries. > > Goa is well connected to other parts of the country > through road and air > routes and even rail (thanks to Konkan Railway). > There are plans to start > super fast train services to Mumbai. However, local > transport facilities, > which are quite expensive, leave a lot to be > desired. > > The presence of a port in Goa helps in the import > and export of material. > Custom clearance at the Goa port has been found to > be much faster than > clearance at the Mumbai port -- due to lesser > traffic and more efficient > officials. It has been noticed that the arrival time > of cargo at the port > and the arrival time at the factory is less than 24 > hours. > > POWER > > Like most Indian states, power infrastructure in Goa > is not up to the mark: > the state relies entirely on tapping power from the > national grid. The > government of Goa has taken steps to improve power > generation by inviting > private parties. > > D-Link has not been adversely affected by Goa's > uncertain power situation > due to the presence of Reliance Salgaocar Power > Company (RSPCL) from which > it draws its power requirements. Power tariffs hence > have been higher than > that present in other states. > > HUMAN RESOURCES > > Goa has a vast resource of English-speaking people, > which reduces > communication hurdles. It has been observed that the > work culture is very > good. Goans have been found to be committed, well > behaved and hard working, > helpful and well spirited. > > The manpower available is suitable for the following > jobs: technicians, > service and support engineers, maintenance > personnel, who are required for > day-to-day functioning of the plant. > > Though personnel required to design application > software are easily > available, the same cannot be said about hi-tech > manpower required for core > software programming. Moreover, IT professionals > generated by the > university and recognised colleges every year > migrate to greener pastures in > search of opportunities. This is a key weakness as > manpower is the key USP > in the IT business. > > BUREAUCRACY > > The biggest advantage that Goa offers is the lack of > bureaucratic hurdles. > Red tapism, which is rampant in other states, can > actually kill a project in > its infancy itself. The degrees of bureaucracy > encountered in metros like > Delhi is absolutely absent in Goa. > > The other factors that D-Link has come across by > being in Goa are: > > o Goa being a very popular tourist destination, > there is > no dearth of hotels and other entertainment > avenues. This > forms a very important criterion when you have > plenty of > foreign visitors. Also, Goa offers immense > opportunities > to hold seminars, conventions and other annual > meets. > > o The government has shown an active interest in > promoting > the IT industry. Unlike other governments, the > Goa > government has been sensitive to the demands of > the > IT industry and has been very cooperative in > taking > necessary steps to boost the IT industry. (ENDS) > > Express Computer * April 28, 2003 * > www.expresscomputeronline.com > ------------------------------------------------------------------------- > soc.culture.indian.goa, the first-every Usenet > newsgroup on Goa. > Visit http://groups.google.com,search for > soc.culture.indian.goa === message truncated === ########################################################################## # Send submissions for Goanet to [EMAIL PROTECTED] # # PLEASE remember to stay on-topic (related to Goa), and avoid top-posts # # More details on Goanet at http://joingoanet.shorturl.com/ # # Please keep your discussion/tone polite, to reflect respect to others # ##########################################################################
