Monday, February 05, 2007

Report from Japanese delegation's visit to India and Singapore

This is a report by Mr. Tsuyoshi Kawanishi, a highly respected veteran of the Semiconductor Industry in Japan. As the Chairman of SSIS, he lead a delegation to India and his findings below reflect the state of thinking of Japanese businessmen today. This article is highly recommended for Students of Indo-Japanese economy who would also like to study the Singapore angle of this bilateral relationship.

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A total of 20 members including members of SSIS went to India and Singapore in substantially 4 days taking night flights. In Bangalore, India, we visited affiliates of TPI and STPI, FTD, TI, Philips, Motorola, and other companies. In Singapore, we also visited EDB, Oki Electric Industry, Hitachi and so on. The tour also included a lecture by JETRO and it was a meaningful and fruitful tour for the participants.

  1. Since the reform in 1991, IT industry in India has surprisingly developed. In fiscal year of 2003, 73% of $12.2 bil. of exports was generated by software industry. However, major destinations for exporting were U.S. and Europe and only 3% was shipped to Japan. This shows that trade with India is not significant for Japanese. However, we must remember that the lowered number is also due to custom duties.

  1. India's IT industry has following advantages:

Human resource. Currently, number of IT technologists in India has touched 2.1 million and an average of 290,000 English-speaking senior technologists newly graduate from colleges every year.

High CMM level. 60 companies have obtained CMM5 in India while only 2 in China

Salary. IT technologists earn $5,000 a year and senior technologists earn $12,000 a year, which are one-third of those of Japanese and almost half of those Chinese

English, which is a "global language" in IT industry is semi-official language

  1. Business achievements differ depending on the company

  1. While job hopping rate in India is generally bet. 10 to 20%, it is only 5% for some companies (e.g., TI)

  1. Personality of Indian –

Positive side: Hard-working, ambitious, logical

Negative side: Highly individualistic and lacks ability to work in teams

  1. Impression of India based on our short stay
  • Generally dirtyexcluding IT-related companies & townsElectricity outage occurs often -several times in a day even in a hotel and some IT-related companies proudly talked about private electric generator
  • Rough driversThey are too rough that I cannot imagine driving in India
  • Due attention must be paid even for meal as one should not eat ice or uncooked vegetable, and should not drink local water. I had to eat spicy hot fried food everyday.

Moving from India to Singapore, everyone felt relaxed. Yet, some mentioned their preference to live in India.In Singapore, we can drink local water, eat uncooked vegetable and even sashimi. Also, there is no traffic jam or electric outage. The streets and towns are cleanly kept and safe, etc.

  • Bureaucrats in Singapore are professionals of very high quality standards and we were strongly impressed by Mr. Tan of the Economic Development Board.
  • The government of Singapore has learned a lesson from SARS that they cannot rely their economy only on service industry. Strength of manufacturing industry in Singapore is in its supply chains. They also emphasize on connectivity of information and telecommunication.
  • A free trade agreement has been signed between India and Singapore. Due to the effect of the Chinese culture, value their ties with abroad
  • Instead of aiming at more than 7% growth of GDP for a short period, they aim at long and continuous GDP growth in a range of 3 to 5%.

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