:::The Desi Flavor:::

Mobile Technology developments in Rural India

Howard Rheingold writes:

ICT4B is an interdisciplinary collaboration of UC Berkeley's schools of Business, Public Health and Information Management and the University's Center for Information Technology Research in the Interest of Society (CITRIS), with backing from Hewlett Packard Labs India in Bangalore, Intel, Grameen Bank, the Markle Foundation, India Institute of Technology Delhi, Microsoft and the United Nations Development Programme. The National Science Foundation has earmarked $3 million for the project. In the summer of 2004, an ICT4B team of social and computer scientists began field studies of the first installations of their custom wireless technologies in India to prepare for wider deployments in 2005 and beyond. The technologies themselves were provided by ICT4B's sister project Technology and Infrastructure for Emerging Regions.

India abounds in rural and urban infostructure projects of both the top-down and grassroots-up variety. The wireless pony express of Daknet uses thousands of buses equipped with Wi-Fi transceivers to pick up and deliver e-mail wirelessly from village kiosks. The Cambodian "Motoman" project uses Wi-Fi equipped motorcycles and a satellite connection to deliver e-mail to remote villages. Malappuram, India's "first e-literate district," provides basic knowledge of computer and Internet usage to more than 600,000 people. Madhya Pradesh State Initiative built an intranet to give villagers direct access to government documents: in the past, farmers had to pay $100 to officials for a copy of a land title. Now, the same titles can be ordered online for less than a dollar. Deeshaa Network uses the same Drupal software that the Howard Dean campaign used so effectively as a groupblog and information portal dedicated to "bring about greater participation in the economic development of India by providing a platform to collaborate and cooperate." Nabanna, a Unesco-implemented project, provides ICT access and training for women in rural communities in West Bengal. Peoplelink and CatGen help rural artisans increase their profits by eliminating middlemen and selling their products directly over the Internet.

Worldchanging.com blogger Jamais Cascio has written about the part that rural wireless infrastructure can play in a broader economic development effort: "Rather than following the already-developed nations in the same course of 'progress,' leapfrogging means that developing regions can experiment with emerging tools, models and ideas for building their societies. Leapfrogging can happen accidentally (such as when the only systems around for adoption are better than legacy systems elsewhere), situationally (such as the adoption of decentralized communication for a sprawling, rural countryside) or intentionally (such as policies promoting the installation of Wi-Fi and free computers in poor urban areas). The best-known example of leapfrogging is the adoption of mobile phones in the developing world. It's easier and faster to put in cellular towers in rural and remote areas than to put in land lines, and as a result, cellular use is exploding."

Wi-Fi technology in rural Nepal

Thanks to Nepal Wireless Networking project, farmers in rural Nepal are using Wi-Fi technology to keep in touch with their families:

"Yak farmers are using the network to buy and sell livestock, and exchange vetinerary tips," said Mr Pun. From the village where I live, the yak farm is two days' walk away, so that was one of the reasons why I thought about using wireless technology," he told the BBC programme Go Digital.

"After we had the network, we could talk to the people taking care of the yak and ask them if they had problems, for example if they needed medicine or food or if they had any messages for their families. "They can send message via e-mail and also they can do it through NetMeeting video conferencing software, so they can also talk."

Campaigning by cell phone

As Indians prepare to go to the polls for parliamentary elections, two top political parties have found a new way to campaign - by cellphone. The latest technology allows parties to instantly send voice and text messages to millions of voters around the country. Across India, tens of thousands of people have recently answered their cellphones and heard a surprising voice. It is Prime Minister Atal Bihari Vajpayee, wishing them well and discussing the achievements he has made during the past 5 years in office.

...One text message, which almost rhymes in Hindi, plays upon the BJP logo -- a lotus flower, which will appear on the ballot. "The goal is Atal," it says, using the prime minister's first name, "Vote lotus."

The BJP also sends text messages of its logo which can be saved as cellphone wallpaper. If that is not enough, supporters can also download a special ring tone of a BJP election song. There will also be pop-up ads on popular Indian web pages.

Click here for the rest of the piece.

Other
: SMS campaigning in India's elections

Death of hand-painted posters?

Indian politicians are dumping hand-painted posters for vinyl printing:

...slick computer-designed posters featuring politicians’ photographs are turning billboard artists into a dying breed.

Vinyl printing, which uses photographs of politicians rather than paintings, is costlier but is favoured by political parties over hand painting because the technology helps rapid production of vast quantities of easy-to-transport and durable posters.

Bollywood billboard artists have also suffered:

A similar fate has befallen Bollywood billboard artists who used to paint giant posters for India’s prolific film industry featuring pouting actresses and muscle-bound actors.

Now most moviemakers prefer computerised posters to advertise their films.

Is outsourcing good for America?

Jay Gohil

There is lots of debate going on in this country arguing that outsourcing of service sector employment to foreign countries such as India will lead to a decline in U.S. white-collar jobs, and are in favor of economic nationalism and protectionist trade policy.

However, Doug Irvin, one of America's leading trade economist offers a lengthy description on the benefits of outsourcing. Read the whole thing:

Has U.S. manufacturing been vaporized in the process? No--manufacturing production has risen about 40 percent over the past decade. Despite lower wages abroad, foreign firms have chosen to produce cars made by high-wage workers here, including Honda in Ohio, Mercedes-Benz in Alabama, BMW in South Carolina, and Toyota in California. Of course, the share of the American workforce in manufacturing has fallen steadily over the postwar period because of vast increases in productivity, but this is a worldwide phenomenon. Between 1995 and 2002, China, Japan, Brazil, and other countries lost more manufacturing jobs than did the United States, according to an Alliance Capital Management study.

The service sector will be reshaped by international developments, too. But just as low-wage China has not taken all of our manufacturing capability, low-wage India is not going to take all of our service sector production. Service producers will become even more specialized and will have to seek new ways of improving their efficiency and productivity. (Productivity in the service sector has notoriously lagged behind that in manufacturing.) As long as the American workforce retains its high level of skills and remains flexible as firms position themselves to improve their productivity, the high-value portion of the service sector will not evaporate.

Outsourcing and comparative advantages

Jay Gohil

Arnold Kling takes on the topic of job outsourcing and comparative advantage, with am emphasis on the role of mathematics

Is the American middle class in jeopardy because modern communications technology enables U.S. firms to use workers in India for tasks such as call-center staffing and software development? Pundits appear to be divided on this issue. However, if you look closely, you will see that professional economists, regardless of ideology, all disagree with the claim that the American middle class will be impoverished by trade with India. We remain loyal to the analysis first propounded by David Ricardo, who would spin in his grave if he could see the contrarian views of outsourcing recently espoused by policy wonk Michael Lind or columnist Paul Craig Roberts and Senator Charles Schumer.

What accounts for the persistent belief that trade with poor countries will make us worse off? Recently, it occurred to me that evolutionary psychology might provide the answer. Anthropologist Alan Fiske has pointed out that there are four ways in which humans transact: on the basis of authority; on the basis of communal sharing; on the basis of equality matching; and on the basis of market pricing. In the era of small hunter-gatherer tribes in which our brains evolved, only the first three were needed. Market pricing is required once you start to interact with strangers.

My hypothesis is that people are not "hard-wired" to understand market pricing, so that they often fall back on the models of authority ranking, communal sharing, or equality matching to guide them. Thus, people interpret trade with India as if it were communal sharing with India. It certainly is true that if we share with India, we will be poorer. However, it is not true that trading with India at market prices will lower our well-being.

Are outsourcing fears overblown?

Jay Gohil

Are they overblown? Certainly they are in my eyes and Clay Risen takes a hard look at it in the New Republic:

While offshoring is definitely an economic trend, there is no statistical evidence pointing to the massive employment drain activists call the "coring out" of America's best jobs. In fact, recent studies show that the opposite is true: While offshoring may displace some workers in the short term, in the medium and long terms it represents a net benefit for both domestic businesses and their workers. In fact, the greatest threat from outsourcing is that its opponents will use it to force a new wave of protectionism.

The frenzy over offshoring got going in late 2002, when Forrester Research released a startling study showing that 3.3 million white-collar jobs would move overseas by 2015. Then, in July of last year, the research firm Gartner trotted out its own study saying that as many as 5 percent of all information technology (I.T.) jobs could move abroad between mid-2003 and the end of 2004. And a 2003 report from Deloitte Research said that the top 100 financial-services firms plan to move $356 billion in operations and two million jobs overseas in the next five years.

But those numbers aren't as scary as they sound. For one thing, while offshore outsourcing is definitely occurring, it's difficult to say just how large a trend it is at present. The Forrester research is based primarily on surveys of business leaders who are merely speculating about future offshoring decisions they might make: "There is no objective data to prove all these jobs are going overseas," says Michaela Platzer of the AeA (formerly the American Electronics Association). "There's just a lot of anecdotal evidence." Some point to the jobless recovery as evidence of offshoring's impact, but the lack of jobs is just as likely the result of booming productivity and the economy's (until recently) anemic pace. "I think people are confusing the business cycle with long-term trends," says Daniel Griswold, an economist at the Cato Institute. "People are looking for someone to blame. They say, 'Aha, it's because our jobs are moving to India.' If you look at the late 1990s, though, all these globalizing phenomena were going on." In other words, it wasn't that offshoring practices changed; it was that the economy slowed.

.....

But, while offshoring-related protectionism may stifle economic development and unnecessarily force business closures, its biggest impact may be longer term. That's because, as the baby-boomers move into retirement, the size of the working population will decline precipitously, by 5 percent by 2015, according to the McKinsey report. Without a readily available source of high-quality, young labor--i.e., the sort provided by offshore outsourcing--the country could find itself in a sort of economic sclerosis. Growth could be permanently hamstrung by the high labor costs and booming social spending that have turned Germany, where it's extraordinarily difficult for companies to lay off employees, from an economic engine into a plodding giant. As Carl Steidtmann, chief economist for Deloitte Research, wrote recently, "Restrictive employment laws in Europe go a long way toward explaining why Europe consistently runs a higher rate of unemployment when contrasted with the U.S. or Britain."

Catherine Mann has done research in this area and makes the following observations:

: Cheaper IT goods has helped boost productivity which added $230 billion to GDP.

: Recent efforts to quantify IT-related and other white collar job loss "offshore" frequently use the peak of the economic and technology boom as the base for the analysis, thus ignoring the business cycle, trend decline in manufacturing employment, dollar overvaluation, and technology bust.

: Going forward, broader diffusion of IT throughout the economy points to even greater demand for workers with IT skills and proficiency. In the 1990s, investment in IT propelled job growth for workers with IT skills to twice the rate of job growth in the overall economy. Over the next decade, the Bureau of Labor Statistics (BLS) projects that job growth to 2010 in occupations requiring IT skills well more than three times the rate of job growth in the overall economy.

Recommend reading the whole thing.

Globalization of IT Services

Jay Gohil

Catherine Mann has a great policy brief on the globalization of IT services. There's a lot of interesting info and the paper suggests that the transformation of information technology industries will lead to productivity growth. Here is the executive summary of the paper:

Globalization of software and services, enhanced IT use and transformation of activities in new sectors, and job creation are mutually dependent. Breaking the links, by limiting globalization of software and services or by restricting IT investment and transformation of activities or by having insufficient skilled workers at home, puts robust and sustainable US economic performance at risk.

The discussion of employment effects is particularly interesting:

[S]tories that report dramatic movement of jobs offshore need to be put into the current economic perspective. First, these citations frequently use the peak of the economy and technology boom as the base for their analysis, thus ignoring the business cycle, trend decline in manufacturing employment, dollar overvaluation, and technology bust. Second, data on international trade do not corroborate the frequent citations but rather point to sustained international competitiveness of US service providers.

Table 2 shows developments in the US labor market from 1999 to October 2003. These data cut through the technology boom and peak of the business cycle but also clearly show the slow recovery in employment so far. Data confirm disproportionate and continuing employment losses in manufacturing (2.7 million or 16 percent since 1999), including production jobs in the IT sector. Among occupational categories, there similarly has been a trend decline in 搈anagement occupations,?where 1.1 million jobs have disappeared since 1999 (a 14 percent decline). In contrast, employment in the private service杙roviding sector increased throughout the period and is 1.5 percent higher in October 2003 compared with 1999.

Employment in white collar occupations related to IT or deemed vulnerable to IT-enabled international trade, is stable and recovering (architecture and engineering occupations) or higher (computer and mathematical occupations is 6 percent higher and business and financial occupations, 9 percent higher) in October 2003 compared with 1999. Without a doubt there is offshore job activity, and the domestic labor market situation remains subdued, but job growth in many white collar occupations at home deemed particularly at risk to offshore operations is expanding, not contracting.

Definitely read the whole thing. There is a view - an incorrect view - that every job gained in India is a job lost in the US. If enough people start thinking this way, we could be in for a whole lot of bad regulations in the US.

I am for free market ideas and certainly not in favor of economic nationalism and protectionist trade policy.

Online Veterinary service

Jay Gohil

Another revolutionary social service:

Many inhabitants of India's 600,000 villages own farm animals and pets. But most are without trained vets, says Ashok Jhunjhunwala, founder of n-Logue Communications, Chennai, India, the company that developed the kiosks. The specially designed cubicles include cameras that offer cheap, instant video conferencing via the internet. Vets can inspect chickens, dogs and goats in real time then offer treatment advice. If the animal is too large, like a cow, or sick to squeeze inside the booth, owners can email photographs to aid diagnosis. There are already around 450 'vet on the net' kiosks spread across rural India. An extra 9,000 units are planned for 2004. Each station is also equipped with computer, Internet connection and local language software. The scheme cuts the cost of animal care by eliminating unnecessary veterinary visits. Internet consultancy costs about 20 rupees (around 40 cents) per hour. By comparison, vets charge a call out fee of around 200 rupees (4$). "Travelling to a town for vet care can be time consuming and expensive," says Jhunjhunwala.

Via Nature.

A Profitable Passage to India...

Jay Gohil

Khozem Merchant has been writing some very interesting articles about the outsourcing of jobs to India. Yesterday he had a lenghty interview with Wipro President Vivek Paul. BusinessWeek recently named Vivek Paul one of its "Best Managers of the Year."

Among the interesting passages:

Mr Paul argues his big US rivals' expensive Indian development centres "offer India to customers as a line-extension" that does not fundamentally alter the economics of their business. Instead, they should be refining their "global delivery models". Indian companies have done so by taking advantage of their large pool of skilled labour, as well as the time differences with their customers (Indian day-time is US night-time) to extend the working day and offer high productivity. "In terms of the global delivery model, I'd say our international competitors are where we were three years ago," he says.

In another three years, Mr. Paul wants to fill the holes in Wipro that have emerged from a growth strategy that has focused on research and development services for say, telecommunications equipment manufacturers - which shrank with the technology downturn - rather than for banks, traditional big spenders on IT.

In the past 18 months, Wipro has made four acquisitions totalling about $150m, although some nasty surprises turned up after it acquired NerveWire, a US company that serves the securities industry. Other integration issues arose over culture, thanks to Wipro's image as an austere word-place that lacks an equity culture and pays modestly.

Mr. Paul was an employee of GE at one point. Merchant reveals what it took to lure Paul away:

It was from GE Medical Systems that Mr Paul's boss, Azim Premji, the white-haired billionaire owner of 84 per cent of Wipro, hired Mr Paul five years ago with an improbably scintillating invitation: "Do you want to make $2m a year with GE or history with Wipro?"