CHANGING DEMOGRAPHICS OF GLOBAL ECONOMY

Globalization is defined in the layman terms as the simple integration of the world production and normalization of the consumption across all the markets of the world. Including  developed and developing nations the demographics of the world economy has undergone a rapid change in the past 3 decades, where there are some common themes and trends clearly visible.

Trend 1: Change in population of the world - Some researchers say that despite the predicted increase in the world population from ~7 billion in 2011 to 7.6 billion in 2020 the working age population is expected to decline in many countries. For example China is already facing shortage due to one child policy OR Japan has seen more people exiting the workforce than there are workers/labor prepared to enter in the market over the next decade. European labour market has seen ratio of labor entering the workforce to exiting decline, for the first time in 2010 more people retired or voluntarily exited the workforce due to several reasons. Other emerging economies such as Russia, China and South Korea observe similar trends. But on the flip side there are younger countries such as India, Mexico, Brazil and Indonesia stand to profit from younger labor force. One-third of India's population is now under the age of 15 so over the next 2 decades we can expect 300 million more joining the labor force.

Dividend of this demographic change only pays off if the country is able to provide its youth with adequate resources such as education, occupation, training, opportunities and guidance. Economic opportunities to develop the skill set of the youth is the only tool to help bridge the gap between skills demand and supply.

Manpower, an international employment agency reports that approximately 31% of the employers in the world find it difficult to find the worker with the required skill set, for example shortage of the workers with computer skills in USA forces them to import labor from countries such as China and India. Outsourcing has been one of important issues which USA congress and leadership is dealing with, as per them unemployment can be reduced only by keeping the jobs within the country. At the same time private companies lobby to increase the quote of H1B visas and also to outsource to cheap markets.

Trend 2: Dominance of the large multinational firms on the scene of international business and trade balance. Large corporations of US control the supply of products ranging from financial to hardware, from defense to personal use and from electronics to  mobile technologies. Since these firms can set the market prices for these products they closely control the profits and availability, which in turn give them access to control other economies. How ? Marketing of these produce are done to spur the demand, specially in large consumer markets of China, India and USA itself. Once the demand is high, the supply meets it and results in large trade activities ultimately leading to increasing volume of money flow across borders. Multinational firms such as apple, google, Microsoft, IBM, Toyota, BMW, HP, amazon, caterpillar, etc reaps the benefit of this trend.

Trend 3: Mobile and global talent market - Skilled labour in emerging economies for example information technology professionals from India and China find it increasingly attractive to move overseas and earn higher wages. Economic development, international labour laws, ease of movement and global language platform adds icing on the cake by making it smooth and convenient for labour to move across borders and find attractive employment. In the last decade from 150 million to 250 million labour force has moved across borders with most of them directed towards OECD countries. And on the other hand we have also seen reverse brain drain, where a large chunk of working age population is moving back to their home countries, for example students from China, India and middle east work for few years in USA/Europe/Australia and then find it attractive to move back.

I am not proposing any solution to some of the problems I have mentioned here and I am also not proposing any ideas. I am not saying that globalization is a problem and also not that the this three trends are the only trends, which depicts the demographics. I am just saying that we should start thinking about it and start focusing on the bigger picture, while solving micro economic issues. 

I am just suggesting that this changing trends are great influence on the global economics.

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Journey from Web 1.0 tooooo Web 2.0

What is Web 2.0 ?.....

Even before I think about Web 2.0, a term which we often here now-a-days I wonder what was Web 1.0 ? Is it everything we know about web or internet before the term Web 2.0 came into existence. Is it Google that revolutionized the web with its extensive use of collaboration technology or widely designed rich internet applications that seamlessly allowed users to share information. Is Web 1.0 just about static pages with information which could not be shared intelligently and in a secured and stable way ?

Can we assume Web 1.0 is web without blogs, wikis, folksonomies, ajax, flash, rich internet applications (RIA), high speed data sharing (broadband) means web where information was available everywhere but not readily accessible to the users. Where individuals were not team players but standalone entities trying to win over the rest.

Analogy comes to my mind correct me if does not appeal.........

Web 1.0 is like a project in a stage where people do not have good team work abilities, they all are individual contributors and say each of them excellent on their own but when they come together cannot collaborate well. Where as Web 2.0 is like a project moving from the unit test stage to integration testing mode where all components so seamlessly and magically integrates with each other that ultimately gives rise to a single product provide best user experience.

Web 2.0 gave birth to enhanced social networking sites (facebook, myspace, orkut), high speed and high quality video sharing (youtube), content management (wikis), personal experience sharing (blogs like mine :-)). Basically this new age of internet helped all of us come closer electronically (are we losing the human touch here ?). It introduced a revolutionized concept of networking where people sitting even next to each other in the office cubicle could be talking via IM or facebook wall.

Web 2.0 in a lay mans term is nothing but intelligent web, a web with semantic (meaning) to it not just content. Semantic web is one of the most researched fields now a days where you attach a metadata with every data in order to organize/categorize it. Its like a book shelf where in order to put the right book in the right category you need to read the books topic and some of its content or simply say the name. I myself did a MS project on RDF (Resource Description Framework) which is a framework that talks about conceptual description or modeling information by attaching some syntactic and semantic meanings to it. You build a tree of resources with every node having a meta data to describe about its contents.

Now a days at work people often talk about adopting ajax, flash, mash ups and other technological concepts to make the internal or external web sites more appealing to the user. A conventional user of the internet or the internal applications gets very excited when you show them the power and speed of using ajax (of not refreshing the form) and reducing the response time. Auto completes or type-aheads are used extensively thought for faster content search, DOM tree in the browser are manipulated real time with one component or node state could change or update others in the tree. Many tools, javascript libraries, frameworks, IDE are getting available to the developers to easily integrate rich html components into thier applications.

Disclaimer: Using this posts I just wanted to mention about Web 2.0 in brief with a simple analogy, those interested in the details can use the resources below.

Resources:
1. Wiki link to Web 2.0 definition
2. Web 1.0 - Lets define it anyways
3. Web 2.0 conference
4. Excellent Web 2.0 workgroup

Bhopal Gas Tragedy - 1984 India

Cost of poor security measures = 17,000 dead & nearly 400,000 affected

24 years have past since one of the most deadliest tragedy's hit the human race affecting millions & leaving tens of thousands widow, orphan, and poor. People are still dying or suffering from the after effects of this disaster which took place on Dec 3rd 1984 early morning hours.

Recently watching a documentary on an American TV channel moved me, my heart & my soul by looking at the sufferings my fellow Indians have weathered. I am writing this post not to reiterate of what many theories, articles, statements and research have stated but just to send a reminder as simple as a Microsoft Outlook calendar reminder to the readers that if in any way we can help the cause to relieve the pain of the people. At least we should be aware of what happened that time and appreciate the social activists sincerely running around the world to identify what was root cause of this genetic disorders still prevalent in the population of Bhopal, India.

The Tragedy

Imagine early morning 1 AM when all might be sleeping peacefully in their homes in order to regain energy for work day ahead, a poor boy might be dreaming of making it big, common man might be thinking how to satisfy ever growing need for money in the family, young girl might be thinking what to wear for the movie tomorrow and mother thinking what should I cook for lunch tomorrow?. Plethora of thoughts, dreams and peace were shattered when a poisonous gas (40 tonnes of Methyl Isocyanate) from Union Carbide's (UCIL) pesticide plant was released into the air killing 2000 in matter of minutes. "A series of studies made five years later showed that many of the survivors were still suffering from one or several of the following ailments: partial or complete blindness, gastrointestinal disorders, impaired immune systems, post traumatic stress disorders, and menstrual problems in women. A rise in spontaneous abortions, stillbirths, and offspring with genetic defects was also noted." (The Bhopal Disaster)

Time line of the event (Wikipedia)

At the plant
21.00 Water cleaning of pipes start.
22.00 Water enters 610. Reaction starts.
22.30 Gases coming out from the VGS-tower.
00.30 The large siren sounds and is turned off.
00.50 The siren is heard within the plant area, workers escape.

Outside
22.30 First sensations. Suffocation, cough,vomiting.
1.00 Police alerted. People escaped.
2.00 First people reached Hamidia hospital. Half blind, gasping for air.
2.10 The alarm was heard.
4.00 The gases reduced.
6.00 The police's loudspeaker: "Everything is normal".


Morning: Thousands of dead bodies and hundreds of dead cattle lying on the streets.

Few questions still not answered :

How corruption blocked $417 million paid by Union Carbide as a settlement claim to reach the common man (25,000 INR per person equivalent to $500 was only paid at that time) ?

What kind of research is still going in Canada, USA and India to identify nature of Methyl Isocyanate which lead to genetic disorder ?

References below for more detail
Rediff's page on 20th anniversary of the tragedy
Full details on the disaster WIKIPEDIA
Bhopal Gas Tragedy: An Analysis
Bhopal Disaster
Bhopal gas tragedy lives on
Bhopal Picture
Towards Freedom
Excellent Presentation on Bhopal Tragedy

BRIC vs. US/UK/Europe - Cricket Test Match

Recently while watching a 1 day cricket match between India and Australia an analogy strikes my mind. Let me first introduce some basic terms related to my analogy. Since this is a very broad topic, I have provided links to various articles to give you more insight.

Economy? - An economy is the realized system of human activities related to the production, distribution, exchange, and consumption of goods and services of a country. It can simply be a measure of the progress a country is making in terms of products, services, assets and reserved wealth.

Cricket? - A game very similar to baseball with 11 players instead of 9 on each side (batsmen, bowlers and fielders). Check this 4 minute video about cricket. TEST match is something played over a 5 days period with each team playing twice where as 1 day is shorter and more interesting form of the game.

Backgorund: Few years back USA, UK and European union were considered the only major players on the economical cricket field but now focus is shifting to Asia, Brazil, Russia and other developing countries. US and other major developed countries are still leading the world economy in terms of trades (import and export), domestic consumption and products. But trends have been witnessed by major economist indicating that Brazil, Russia, India and China soon as early as 2025 will become the major player on the field. The term BRIC was coined by a global economist from Goldman Sachs to put forward a point that by 2050 these 4 countries will eclipse most of the richest countries.

Being an Indian I am a ardent follower of Cricket. I am going to simply compare 2 sides on how well their 11 players (listed below) are currently playing and helping for the Economic Growth of the country.

Team A - BRIC vs. Team B - US/UK/Europe

1. Infrastructure: Opening batsmen no 1, most critical for the team to win. Team A has recently realized the importance and is spending enough money to build roads, airports, railway networks, water supply system, sewage and other required infrastructure elements. Team B was smart enough to realize this long back during the world war era and build it; which gave them the edge over A. Not just building but maintaining critical infrastructure is of utmost importance.

2. Domestic product: GDP opening batsmen no 2, the player who should closely and intelligently work with no 1 and foster a long partnership to give a solid start to the team. Team B accounted for 45% of world GDP in 2007 but Team A is growing at a rapid pace. China and India are aiming and achieving nearly 9% GDP growth.

3. Natural Resources: In terms of natural resources both the teams are nearly equal. An 8 billion barrel capacity light oil field recently confirmed in Tupi, Brazil (News). Brazil if successful to draw the full capacity of the new discovery, will compete with Arabs in oil supply. India is one of the major player in steel, coal and copper. Russia accounts for around 20% of the world's production of oil and natural gas and possesses large reserves of both fuels.

4. Inflation: Inflation in simple terms is the rise in average price of goods which can be attributed to 2 factors: supply of money (how much money government is printing) and supply/demand of goods. This middle order batsmen has the responsibility to bring stability to the innings regardless the performance of first 3 players. Both teams are keeping a very close tab on inflation rate by controlling interest rate and domestic product supply. A & B are both performing equally well however US Recession is leading to higher inflation in US as well as affecting the world market.

5. Government Policies: How liberal is the economy, how open is government to foreign investors, what are the free trade policies ?, what is the import duty on commercial products like cars, etc ?. All these are driven by government policies. Team B liberalized economy pretty early and brought in enough outside money for growth. However Indian finance minister (currently prime minister of India) Dr. Manmohan Singh liberalized the Indian economy in the last decade. Giving infrastructure contracts to private companies brought in competition and hence better quality and timely completion of major projects. Read about China here.

6. Corruption: A parasite that hinder countries growth and spoils its image. It is prevalent globally but the problem for Team A is corruption to the very core. Corruption is US is at a very high level, within large organizations or government agencies. But for example in India corruption is everywhere; from 2000 rupee/month earning clerk to politicians at the top most seat in the country, from schools to industries. In China due to reluctance of communist for a political reform almost 10% of government spending goes in kickbacks and bribes.

7. Literacy: Key middle order player of the team who's service is always required. This player if an all rounder can immensely boost chances of the win. Team B achieved nearly 95% literacy, but for Team A again this is core issue which is holding it back to perform consistently. Team A is rapidly reforming education system to increase awareness for example China introduced English in primary standards to increase English speaking population. Brazil's 88% population can read and write. India is also pushing education to the villages and under developed areas in the country through social organizations.

8. Agriculture 9. Industries 10. Technology 11. Climate -----
    4 major bowlers of the team who should bowl well and take early wickets to put pressure on the opponent. These 4 players form the bowling backbone to push the countries economy. A country should be self sufficient to meet domestic demand of food through a developed Agriculture sector. However Climatic conditions like enough & timely rain can help player 8 immensely. So I can say #8 & #11 are the opening bowlers and should complement each other.

Industrial growth and use of the best available Technology can help the country to boost GDP. Team B (US/Britain) had their Industrial Revolution in early 1800's but Team A although started late is catching up now.

So the conclusion is that team B played their 1st innings very well and put up big score on the board. Now its team A's turn to play well and challenge team B.

I am not an economist or do not have in depth understanding of above mentioned 11 players but I just wanted to put forward a comparison between these two teams on which world is currently concentrating on.

Few interesting articles:
* Nicholas Vardy's Build Your Fortune BRIC By BRIC
* Four futures for China
* Six mega trends in India
* Is your state in Recession

Change in Technology

Technology changes and evolves faster than anything in today's world, blink an eye and you see a new technology, framework, design pattern, tool or software out there. Hardly few decades back people were using punch cards to enter data although punch card itself is pretty old. Charles Babbage designed the first mechanical calculator using punch cards and soon a technology giant IBM came out with unit record processors for business data processing. IBM released first working computer model in 1950, now in 2008 only 58 years since the origin of this whimsical, magical and powerful hardware; we see miracles being performed using it.

Every 18 to 20 months, advances in technology virtually double the computing power $1 can buy. A statistical study shows that in the last 35 years computing performance has increased by a factor of a million and entry level price has decreased by factor of 1000. First came punch cards (total hardware), then computers (bundled with a software called operating system which made it seamless and transparent to access computers), then people started writing tools and applications using low level languages like C, COBOL, Pascal etc.Next came high level languages like Java, C++, Perl, etc which made it so much easier for the programmers to write browser (IE, Mozilla Firefox, Netscape ) based applications. All of these led to the evolution of World Wide Web (WWW) and took the world with a storm. People started using simple browser interface to access plethora of information available in the world.

People were using super computers (IBM mainframes) which took 1 room space to fit with vacuum tubes, then came desktop (mean looking machine that can fit on your desk), then came laptop which is portable and easily sits on your lap. Now we see people using palm tops, PDA's, and even smaller hand held devices. It won't be an overstatement to say that soon a wallet or pen size hardware will replace all the above.

First time I heard about computers when I was in 8th grade and was fascinated by its ability to make any complex task simpler. First program I wrote was in C (a very simple character array printing module), yesterday I was programming in Java and today I am talking about virtualization and agile framework with my colleagues. I wonder will something I am learning today become obsolete tomorrow?.

In such a rapidly changing environment a question always haunts me; how should I keep my resume up-to-date with all the buzz words and new technologies? I welcome your opinions about the same.

Change in Marital Status

Marriage - "A sharp turn in your life, only the best driver with control (maturity), judgment (right decision at the right time) and vision (attention, importance to each other) can take it smoothly without damaging (compromising himself/herself much) it" .... by Vinay Solanki.

Most youngster, eligible bachelors, those in the courtship period and the one's on the verge of getting married are worried how for the heaven sake I will be able to manage this change in my life? Jackson Brown says "marry the right person, this one decision will determine 90% of your happiness or misery" but I totally disagree. I think no person can be right or wrong for you, only the best you can do is judge the cosmetic points like looks, hobbies, common interest, intelligence, etc. But unless you start living with someone you can never know 100% how compatible you are. No marriage is perfect, you need loads of efforts to make it perfect. However as per me best marital relationships are the one with little sweet quarrel's, lot of romance and love, trust (most critical), respect for each other and freedom. There is no right age to get married, if you think you have found the right person and you are mature enough to handle then go ahead.

Change of marital status from single to married brings with it lots of responsibilities, expenses, stability, maturity (over the period of time of course). You need to be very very good listener, observer and motivator to keep the FLAME of marriage always burning red and flamboyant. To maintain the spice in it keep putting hot sauce (passion), red chili (attraction), garam masala (fun n laughter).

Successful marriage is like a bond between two metals, each metal have to be moulded a bit, each metal's shape and size is changed a bit in order to make an alloy which is then becomes inseparable.

So go ahead and face the challenge with your partner and enjoy !!

Change, change, change.....

I am not asking for a change of $20 bill but just conveying or trying to reiterate a very popular belief 'the only constant in life , in this world, on this earth and in the entire universe is Change'.

You may wonder why in the first place I am talking about change, common we all know about it so well but still none of us are capable to manage change most effectively, efficiently or positively. Change is so pervasive and fundamental, change is thought provoking, it provokes many form of anxious attention from each of us. Change is threatening, enticing, puzzling, the very stuff of life, change is Invigorating.
Change is invigorating (energizing), hmmm....why it is energizing?... a new home - change of location, change of job, change of love, change of weather, change of surroundings, change of guards at the border, change of government policies, change of dress, change of course, change of technology, change of partners, change of relationships....change of any kind brings with it a form of energy (positive or negative)....change is always invigorating. Change is the very stuff of life without it we would not be who we are or where we are or what we are doing?....

Change is not an issue, it is the management of change which is difficult and most critical to any one's success. Survival of the fittest (only the best will last) - only 'the one' who can adapt to change will exist till eternity. It brings us out of our comfort zone, asking us to do something in a different manner, sometime altogether in a new way and most of the time somewhat unknown. Change leads us to new journey, on a new unknown path, in a black hole and we don't know when we will see ray of light/hope. There is always light after dark, happiness after moment of sadness, smile after a cry, new after old similarly change is always for good (In India we say 'jo hota hai acche ke liye hota') and I believe this very strongly.

Those eager to capitalize on new opportunities or those who want to achieve success in shorter span of time change frequently and at a faster pace then others. Change brings me and many others like me to a foreign land for higher studies and with a hope to get higher paying job, earn quick bucks, many stay back and make this as homeland whereas some go back to their homeland to be close to family and friends but ultimately all this process involves so much change, changing place, change in body chemistry to adapt to new environment and weather, change of friends, change of timezone and many more.

Change..."more coming soon"