move up the value chain

As thomas friedman has rightly said "the world is flat".the playing field has now been leveled.we in India have benefited immensly from this flattening bcuz we can do work here cheaper than it can be done in the US n the EU.by sending jobs to India,companies are saving millions of dollars.thts why u see a GM which is cutting down its workforce by 45000 workers globally is opening new facilities in India and employing more people. intel,microsoft,google,amd,ibm are all rushing to india to capitalise on the low cost intellectual capital in India.its been a huge party for us upto now.but for how long?

How long can we stay the cheapest place to get work done?salaries in the IT industry alone are going up by 15% annualy.though they are still v far away from the american or european levels,other players are jumping into the game.To mention a few eastern europe,south america,china n the list goes on.these players will emulate our model for success and compete for the same jobs that are making our GDP grow at 8% today.so where do we go from here?

the solution to this problem is continously moving up th value chain.we need to constantly innovate to get a larger part of the pie.let me elaborate...
Initially in india,we got a lot of call center jobs.these were low skill jobs that moved here only because we can do them cheaper.these jobs can be done anywhere in the world and we have no real advantage over any other competitors except the availability of a large english speaking population.this advantage is not a permanent one.a lot of countries in and around india itself can take these jobs eg pakistan,bangladesh,sri lanka.
how do we overcome these problems?we move up the value chain.this is being done effectively in the bpo space.we are moving into knowledge process outsourcing,legal process outsourcing etc.these jobs are more rooted here because of the higher skill level they require.

but what about the manufacturing jobs,the auto part industry,the pharmaceutical companies.upto now we are still very low in the value chain.we are manufacturing not designing auto parts,we are manufacturing generic drugs cheaper not really making new drugs.this has to change.more and more R&D has to be brought to india.we need to sustain the advantage we have.many companies realise this and have put money into R&D but our basic infrastructure to support it is poor.

what we need today is high quality research happening in our universties.very few indian students think of becoming scientists or researches in india bcuz the pay is poor.this mindset has to change.we need a greater push towards research from the government.setting up world class universites with better infrastructure such that companies actually send part of their research to them.this is happening at a very small scale right now and is limited only to the IITs.

what we lack today is the will not the capability.there are a large no of indians in research jobs all over the world.they will willingly come back if they are provided the same facilities here even at lower pays.

the sustainance of the GDP growth is crucial and is in our own hand.what we do today will shape our tomorrow.