April 23, 2005 – Emergic

The Art of Packing

WSJ has a column by Jeremy Wagstaff on how to pack for travel:

To me the big innovation in packing is the module. The thinking is simple: Why collect all the individual things we are going to take with us on our trip and then lump it together? Most of us, if the flight is not actually about to depart, make little piles of our underpants, socks, shirts, etc on our bed before cramming them into the suitcase, hoping they fit, squeezing a sock-ball here, a handkerchief there. At the other end, we throw the case on the bed, rummage around inside, with shirts, vests, scarves and boots flying everywhere in a sort of reverse action replay. It’s horrible, and if we then have to move room, hotel, or continent again on the trip chances are not a single item of clothing looks anything like when we bought it.

So technology’s answer to this problem is: Stay at home. Let someone else do the trip. No, actually, it’s modular packing, sometimes called packing cubes. It’s simple enough: Instead of throwing everything into one bag, you put them into smaller sub-bags, which then go into the big bag. So the big bag, instead of being a pile of sundry items in varying degrees of crumplitude, is a neat collection of different size sub-bags, or modules.

Technology and Development

Atanu Dey writes:

The use of high technology (x) is highly correlated with high degree of economic growth and development (y). Correlation, as economists never tire of reminding one, is not causation. Furthermore, even if there is causation, the direction of causation is not always obvious. Two variables x and y may be causally linked; but does x cause y, or does y cause x, or are they two connected through some other hidden variable z?

I am sitting in the University of California at Berkeley. (Hi from Berkeley!) The campus is full of high technology tools. Compared to what UC Berkeley has in terms of computers and bandwidth, the campus of a typical Indian university (Nagpur University, for instance) has very little. So it is tempting to believe that if Nagpur Univ were to be equipped with all the electronic gizmos and Internet bandwidth, then it too will attain the level of a UC. But that is patently absurd. What makes UCB is not the hardware (electronic or otherwise) but human and institutional capital. Human and institutional capital is what matters, not hardware. Just to drive home that point, Nagpur University in 2005 has more electronic hardware and internet bandwidth than UC Berkeley had in 1980. Yet, the capability of UCB(1980) far exceeded that of Nagpur University(2005).

It is not how much hardware or software or information one has that matters; what matters is what you do with it. And what you do with it depends on you and not on the thing. An inept author will not suddenly start writing masterpieces even if equipped with the fanciest word processing software. People will not suddenly become knowledgeable just because they have all the information of the world wide web at their finger-tips.

India’s IT and Outsourcing Industries

The Economist writes:

Optimism about India’s prospects in these businesses is based, firstly, on the sheer range of work now encompassed by the IT and BPO industries and, second, on its potential for further expansion. The business that started it alloffshore software developmentstill has plenty of room to grow. The world becomes more dependent on IT by the day. Even as new applications are churned out, old ones need maintaining and even newer ones developing.

The youthful BPO business, meanwhile, is still defining itself. At one end, say at 24/7 Customer, it involves telephone marketing to hapless British householders unaware they need a new credit card; or fielding a call from a nice lady in a bank in Exeter in western England, who wants to send a credit card by courier to Antigua, and is presumably unaware that the efficient, London-accented courier executive she deals with is sitting in Bangalore.

Such call-centres are the best-known and biggest part of BPO. At the other end of the spectrum, even high-end research-and-development work is being outsourced. The Bangalore offices of HCL Technologies, for example, is designing a back-up navigation system for Airbus.

In between, the range of business processes that can be outsourced is constantly expanding: processing insurance claims; desktop publishing; the remote management and maintenance of IT networks; compiling audits; completing tax returns; transcribing medical records; financial research and analysis. The list of possible activities is almost endless. We have barely scratched the surface, says Stefan Spohr of A.T. Kearney, a consultancy.

The biggest constraint on the growth of India’s service industries may be the available talent pool. Nevertheless, the bullish projections for Indian IT and IT-enabled services produced in 2002 by NASSCOM and McKinsey seem within reach. They forecast that the combined industries would, by 2008, employ 4m people (up from fewer than 900,000 in 2004), earn $57 billion-65 billion from exports (compared with $17 billion in 2004), and account for 7% of GDP (compared with 4%).

The challenge this poses for the firms leading the boom is how to expand fast enough to meet demand without jeopardising quality. For quality, as much as cost, is what is driving the demand. It is in this context that Bangalore’s troubles have to be seen: as the acute growing pains of a still-infant industry. It is a worry not because the difficulties are insuperable, but because some can be solved only by the government. India’s IT industry has thrived in part because, unlike most other sectors of the economy, it has largely kept the government out of its business. That period is coming to an end. Neglect, the industry is learning, is not always benign.