Benjamin Franklin and Thomas Jefferson needed three weeks to travel across the Atlantic Ocean in the late 1700s; Charles Lindbergh took 33 hours to fly from New York to Paris in 1927. Last Friday, it took about 21 hours to travel from Mumbai, India to Minneapolis. The venture consisted of back-to-back nine hour flights, with a three-hour layover in Amsterdam.
Global air travel is routine today, but I still marvel how easy it is for 21st Century citizens to conduct business around the world. When we landed in Delhi on Oct. 21, one of my colleagues quickly picked up the score of the Gopher football game. (The University of Minnesota lost to North Dakota State University, 27-21.) And we could follow the Red Sox victories over Cleveland in the AL Championship series, and the first two games of the World Series, just as if I were in my living room at home. I was able to keep in contact with my office by email and post to my web site with absolutely no trouble.
The ease of conducting business from half-way around the globe, however, should not fool us into thinking that it is easy to do business in a foreign country. Minnesota’s disappointing experience with the Essar Group serves as an apt example. While we were in India, Essar Global of Mumbai announced it had closed a deal to purchase Minnesota Steel Industries in Nashwauk. At a cost of $1.6 billion, Essar plans to develop a specialty steel plant on the site that would represent the biggest foreign investment in Minnesota ever, bringing many sorely needed jobs to the area.
But the ink on the purchase papers was barely dry when the U.S. Department of Commerce contacted Minnesota Gov. Pawlenty to inform him of Essar’s engagements with Iran. Essar apparently is in negotiations to build a multi-billion dollar oil refinery in Iran. The Iran involvement would be a violation of U.S. sanctions against the country; Pawlenty said he could no longer support the Essar investment in Minnesota.
It is possible that Essar will back out of the Iranian deal, and even if it doesn’t it is possible that another steel company will come along and set up shop in Minnesota if Essar is barred from operating here. But what a roller coaster! Whatever happens, it will be a long time before a new steel mill is operating on Minnesota’s Iron Range.
Whenever you do a deal, you never really know what you’ve got until the deal is done. Even with the best due diligence, surprises always come up after the deal is officially closed. The significance of those surprises is typically proportionate to the size of the deal -- $1.6 billion is a lot of money; gaining a new steel plant, and then losing it in a matter of days for an area that desperately needs the jobs, is wrenching.
During our trip, we were apprised of cultural differences between Americans and Indians. Proud and formal, Indians like to assure potential clients. Sometimes they say “yes” to cover for the short term, only to back away when it comes time to close a deal. One mission delegate shared a story about contact he had with a potential Indian customer. All the negotiations went smoothly, and a deal was all but signed. In the end, the client never signed, much to the surprise of the Minnesotan.
I don’t consider any of these nuances to be significant enough to deter American business people who really want to do business in India. If you have a product appealing to middle class consumers, you really need to look at getting into this market. Rusy Kohli, who is handling distribution of Polaris in India, summarized the decision American companies need to consider about doing business in India.
“You can get in now and be the first one in, and put up with all the difficulties and barriers,” he said, on the one hand. Or, on the other hand, Kohli said: “You can wait until some of the barriers become easier to handle but then play catch up to all those others companies that got in ahead of you.”
Tuesday, October 30, 2007
Monday, October 29, 2007
India is the placed to be
As I looked out the window from my 16th floor room in the Hilton Towers Hotel in Mumbai on Friday, I saw a city that reminded me of New York. It was busy and chaotic in Mumbai, a city that went by the name of Bombay until 1995, but the commotion seemed more understandable here than it did in the other parts of India we visited. I actually think I could live here, a comment I would not make about Delhi or Bangalore.
Renny Thomas, a consultant with McKinsey & Company, made a compelling case for India’s economic potential during a morning-long briefing. He explained India has 200 million households. Each household represents an average of 5.5 people. Three things will happen over the next 40 years: The number of households will grow, the average income of the wage earners in those households will grow, and the average number of people in those household will decline.
These trends are motivating to any company which offers household products. Nowhere else in the world is there such a large market with so much up-side potential. The average household size in China is 3.7 people and in Russia it is 2.8 people, Thomas offered for context.
Thomas noted that 30 percent of the country’s population currently lives in urban areas, a percentage that is expected to grow to 70 percent in the next 50 years when the population is expected to level off at 1.5 billion people. Currently, 700 million people or 75 percent of the country’s population, live in rural India, dotted with some 65,000 villages.
I wondered whether the country’s 9 percent annual GDP growth would mean much to those living in rural areas. A reliable source of electricity cannot be guaranteed even in urban areas, so what hope might there be for raising living standards in rural areas? Thomas said wide-area wireless networks will bring internet access to low-cost battery operated computers, which will help bring new levels of education to the country’s remotest sectors. “The country gets wireless,” he said, citing the fact that Indians are signing up for cell phone service at a rage of 6 million new subscribers per month. In a country were land lines were never particularly reliable for communication, more Indians that ever are talking to each other by cell phone.
Habil Khorakiwala, head of the Federation of Indian Chambers of Commerce, said the proportion of people living in poverty in the country already has declined by 15 percent since the country opened itself up to economic reforms in 1992. The middle class has grown from as small as 15 million people to well over 100 million people in the last 15 years.
Thomas cited McKinsey & Company data which showed the number of “deprived” households – the poorest of the poor – had dropped as a percentage of total population from 80 percent in 1995 to 54 percent in 2005. By 2025, it is projected to drop to 22 percent. By 2025, 41 percent of the country’s population is expected to be in the middle class.
To my mind, helping hundreds of millions of people out of poverty is a very compelling reason to get involved in commerce with India. It is always gratifying to know that a business venture may bring profits, but I think it is even more exciting to consider that it will help people live at a better standard of living.
Clearly, there are a number of barriers to doing business in India – poor infrastructure, high import duties, unreliable sources of electrical power and water. But all kinds of American companies have shown those obstacles can be overcome. If you want to be a part of the biggest economic development story in the history of the planet, then India is the place to be.
Renny Thomas, a consultant with McKinsey & Company, made a compelling case for India’s economic potential during a morning-long briefing. He explained India has 200 million households. Each household represents an average of 5.5 people. Three things will happen over the next 40 years: The number of households will grow, the average income of the wage earners in those households will grow, and the average number of people in those household will decline.
These trends are motivating to any company which offers household products. Nowhere else in the world is there such a large market with so much up-side potential. The average household size in China is 3.7 people and in Russia it is 2.8 people, Thomas offered for context.
Thomas noted that 30 percent of the country’s population currently lives in urban areas, a percentage that is expected to grow to 70 percent in the next 50 years when the population is expected to level off at 1.5 billion people. Currently, 700 million people or 75 percent of the country’s population, live in rural India, dotted with some 65,000 villages.
I wondered whether the country’s 9 percent annual GDP growth would mean much to those living in rural areas. A reliable source of electricity cannot be guaranteed even in urban areas, so what hope might there be for raising living standards in rural areas? Thomas said wide-area wireless networks will bring internet access to low-cost battery operated computers, which will help bring new levels of education to the country’s remotest sectors. “The country gets wireless,” he said, citing the fact that Indians are signing up for cell phone service at a rage of 6 million new subscribers per month. In a country were land lines were never particularly reliable for communication, more Indians that ever are talking to each other by cell phone.
Habil Khorakiwala, head of the Federation of Indian Chambers of Commerce, said the proportion of people living in poverty in the country already has declined by 15 percent since the country opened itself up to economic reforms in 1992. The middle class has grown from as small as 15 million people to well over 100 million people in the last 15 years.
Thomas cited McKinsey & Company data which showed the number of “deprived” households – the poorest of the poor – had dropped as a percentage of total population from 80 percent in 1995 to 54 percent in 2005. By 2025, it is projected to drop to 22 percent. By 2025, 41 percent of the country’s population is expected to be in the middle class.
To my mind, helping hundreds of millions of people out of poverty is a very compelling reason to get involved in commerce with India. It is always gratifying to know that a business venture may bring profits, but I think it is even more exciting to consider that it will help people live at a better standard of living.
Clearly, there are a number of barriers to doing business in India – poor infrastructure, high import duties, unreliable sources of electrical power and water. But all kinds of American companies have shown those obstacles can be overcome. If you want to be a part of the biggest economic development story in the history of the planet, then India is the place to be.
Thursday, October 25, 2007
Meet some of the delegates
Not only am I getting the opportunity to meet many wonderful people from India, but I am getting to know my colleagues on this trade mission. Let me introduce a few of them to you:
Kim Pearson founded New Boundary Technologies in 1985, a software company with 30 employees. He said he’s made two observations during his trip here. First, the small tech companies in Bangalore are raising the standard on human resource practices. In order to mitigate rates of turnover as high as 30 percent, the small companies are adopting HR policies typically only found in big companies. “They spell out a compelling career path, and offer good training,” he said. They offer good compensation with bonuses. Pearson said they do a better job than most small tech companies in the United States. The example of the Indian companies is actually going to force American companies to adopt similar HR practices in order to compete for talent.
Second, Indian companies have done a good job of creating a knowledge repository so that when someone leaves the company, the information in their head is not lost. The company records everything and the person who takes over gets all that information and doesn’t miss a beat. With all the people who are going to be retiring as the Baby Boomers age, “we need to be doing the same thing in our companies so the intellectual capital of the company is not lost,” he said.
Erik Paulsen, state representative for Eden Prairie, Minn., recently announced he is running for the third congressional district seat in the U.S. House of Representatives. He is interested in India because there are a number of tech firms in Eden Prairie. He is interested in facilitating cooperative arrangements between Indian firms and those in Minnesota.
Paulsen introduced legislation last session that resulting in a $150,000 appropriation to the University of Minnesota for the launch of a Minnesota India Center. Paulsen said details for the center’s operation are being worked out by University officials, but he suspects it will offer some kind of support to businesses interested in India. It may also focus on health concerns.
A China Center was set up at the University of Minnesota in 1979, a resource Paulson tapped as he worked for legislation establishing a program to teach Mandarin in Minnesota schools.
Mark Aulik, owner of Allow Hardfacing and Engineering Co., of Jordan, Minn., spends about half his year in India, where he has been doing business since 2001. His company makes equipment for processing food, including automatic potato peelers and fruit packaging machines. He believes his company is a natural fit for India, where food is so important, yet most of its rots before it gets to market.
Aulik sells a system for rendering slaughtered animals so no parts go to waste. The system gives the animal’s owner a more efficient way to process animals and reduces land and water pollution. Aulik said he believes his company can make a big difference in India.
Megan and Dennis Doyle are founders of Hope for the City, a charity that channels excess corporate equipment and supplies to disadvantaged people. They recently shipped a carton of medical supplies to Armenia. In seven years, people all over the world have received millions of dollars in supplies through Hope for the City. The program also offers meals to disadvantaged children during the summer in the Twin Cities.
Hope for the City has a micro-loan program in India, with 75 loans currently outstanding. The loans range from $100 to $500. The money is being used to help villagers start or advance a business. On person used the money to buy an iron to start a laundry business, another used the money to buy a water buffalo.
Boris Miksic is president of St. Paul-based Cortech, which has been doing business all over the world for years. Miksic told the group that his company has just signed a deal to help an Indian state clean up its streets and give work to the poor. The state is hiring unemployed women to go around their city and pick up trash, using biodegradable trash bags made by Miksic’s company.
Miksic has published a 286-page paper-back autobiography, titled “American Dream: a guy from Croatia.” He gave me a copy of the book and I have been reading it as we travel.
Sam Roy is president and CEO of EPS Technologies of Mankato. His company has developed a technology for reducing the pollution emitted by diesel engines. The product already is in use in Thailand. As we drive about, he notes all the trucks driving by, belching out clouds of exhaust. Visibly excited about his company, Roy said the product will make the air cleaner and help the owners of the vehicles save a lot of money.
Steven Cremer is president of Harmony Enterprises in the tiny southeast Minnesota community of Harmony. His business was started by locals looking to do something to spur their economy. In the 1960s, they made the tent components to travel trailers. Now, with 60 employees, the company makes waste management products. For example, the company makes a machine which compacts cardboard, which can be recycled.
Sidney Emery is CEO of MTS Systems, which makes testing equipment. Emery said the company made a decision a few years ago to focus on China and he is here evaluating that decision. His conclusion is they made the right decision. He said the difference is China offers opportunity right now, whereas the opportunity in India is still a few years off.
Brett Shockley is CEO of Spanlink, a company that helps companies automate their telephone systems. With his company’s equipment, a customer can call an office in Minneapolis, and be seamlessly transferred to an employee in St. Paul. This allows businesses to make the most of their branch networks, Shockley explained. With all the economic growth in India, there are going to be a lot of new offices needing phone systems.
Gopal Khanna is commissioner of the Minnesota Office of Enterprise Technology. Gov. Pawlenty calls him the state’s chief information officer. Before joining the Pawlenty administration, he worked as chief financial officer for the Peace Corps, improving procedures across the organization’s international operations. Khanna, of Indian heritage, is bringing new efficiencies in information management and telecommunications to the state’s numerous departments and agencies.
Steve Korstad, chief financial officer for Coronal, is traveling with his colleague John Howard III. Coronal is an emerging company which offers a pollution-free way to incinerate waste products. Using carbon arching technology, garbage can be vaporized with heat that exceeds the temperature of the surface of the sun. The process produces a methane gas that can be used or sold. The company is preparing to set up shop in northern Minnesota near a paper mill, which will use the methane to dry its paper. Garbage from neighboring communities will fuel the operation.
Kim Pearson founded New Boundary Technologies in 1985, a software company with 30 employees. He said he’s made two observations during his trip here. First, the small tech companies in Bangalore are raising the standard on human resource practices. In order to mitigate rates of turnover as high as 30 percent, the small companies are adopting HR policies typically only found in big companies. “They spell out a compelling career path, and offer good training,” he said. They offer good compensation with bonuses. Pearson said they do a better job than most small tech companies in the United States. The example of the Indian companies is actually going to force American companies to adopt similar HR practices in order to compete for talent.
Second, Indian companies have done a good job of creating a knowledge repository so that when someone leaves the company, the information in their head is not lost. The company records everything and the person who takes over gets all that information and doesn’t miss a beat. With all the people who are going to be retiring as the Baby Boomers age, “we need to be doing the same thing in our companies so the intellectual capital of the company is not lost,” he said.
Erik Paulsen, state representative for Eden Prairie, Minn., recently announced he is running for the third congressional district seat in the U.S. House of Representatives. He is interested in India because there are a number of tech firms in Eden Prairie. He is interested in facilitating cooperative arrangements between Indian firms and those in Minnesota.
Paulsen introduced legislation last session that resulting in a $150,000 appropriation to the University of Minnesota for the launch of a Minnesota India Center. Paulsen said details for the center’s operation are being worked out by University officials, but he suspects it will offer some kind of support to businesses interested in India. It may also focus on health concerns.
A China Center was set up at the University of Minnesota in 1979, a resource Paulson tapped as he worked for legislation establishing a program to teach Mandarin in Minnesota schools.
Mark Aulik, owner of Allow Hardfacing and Engineering Co., of Jordan, Minn., spends about half his year in India, where he has been doing business since 2001. His company makes equipment for processing food, including automatic potato peelers and fruit packaging machines. He believes his company is a natural fit for India, where food is so important, yet most of its rots before it gets to market.
Aulik sells a system for rendering slaughtered animals so no parts go to waste. The system gives the animal’s owner a more efficient way to process animals and reduces land and water pollution. Aulik said he believes his company can make a big difference in India.
Megan and Dennis Doyle are founders of Hope for the City, a charity that channels excess corporate equipment and supplies to disadvantaged people. They recently shipped a carton of medical supplies to Armenia. In seven years, people all over the world have received millions of dollars in supplies through Hope for the City. The program also offers meals to disadvantaged children during the summer in the Twin Cities.
Hope for the City has a micro-loan program in India, with 75 loans currently outstanding. The loans range from $100 to $500. The money is being used to help villagers start or advance a business. On person used the money to buy an iron to start a laundry business, another used the money to buy a water buffalo.
Boris Miksic is president of St. Paul-based Cortech, which has been doing business all over the world for years. Miksic told the group that his company has just signed a deal to help an Indian state clean up its streets and give work to the poor. The state is hiring unemployed women to go around their city and pick up trash, using biodegradable trash bags made by Miksic’s company.
Miksic has published a 286-page paper-back autobiography, titled “American Dream: a guy from Croatia.” He gave me a copy of the book and I have been reading it as we travel.
Sam Roy is president and CEO of EPS Technologies of Mankato. His company has developed a technology for reducing the pollution emitted by diesel engines. The product already is in use in Thailand. As we drive about, he notes all the trucks driving by, belching out clouds of exhaust. Visibly excited about his company, Roy said the product will make the air cleaner and help the owners of the vehicles save a lot of money.
Steven Cremer is president of Harmony Enterprises in the tiny southeast Minnesota community of Harmony. His business was started by locals looking to do something to spur their economy. In the 1960s, they made the tent components to travel trailers. Now, with 60 employees, the company makes waste management products. For example, the company makes a machine which compacts cardboard, which can be recycled.
Sidney Emery is CEO of MTS Systems, which makes testing equipment. Emery said the company made a decision a few years ago to focus on China and he is here evaluating that decision. His conclusion is they made the right decision. He said the difference is China offers opportunity right now, whereas the opportunity in India is still a few years off.
Brett Shockley is CEO of Spanlink, a company that helps companies automate their telephone systems. With his company’s equipment, a customer can call an office in Minneapolis, and be seamlessly transferred to an employee in St. Paul. This allows businesses to make the most of their branch networks, Shockley explained. With all the economic growth in India, there are going to be a lot of new offices needing phone systems.
Gopal Khanna is commissioner of the Minnesota Office of Enterprise Technology. Gov. Pawlenty calls him the state’s chief information officer. Before joining the Pawlenty administration, he worked as chief financial officer for the Peace Corps, improving procedures across the organization’s international operations. Khanna, of Indian heritage, is bringing new efficiencies in information management and telecommunications to the state’s numerous departments and agencies.
Steve Korstad, chief financial officer for Coronal, is traveling with his colleague John Howard III. Coronal is an emerging company which offers a pollution-free way to incinerate waste products. Using carbon arching technology, garbage can be vaporized with heat that exceeds the temperature of the surface of the sun. The process produces a methane gas that can be used or sold. The company is preparing to set up shop in northern Minnesota near a paper mill, which will use the methane to dry its paper. Garbage from neighboring communities will fuel the operation.
Wednesday, October 24, 2007
A cost of doing business
Business in India is predicated on licensure and compliance with various government regulations, on both the state and national level. I learned today that many businesses routinely pay local officials to expedite approvals. It seems like a major problem for American businesses that want to set up shop in India, particularly in light of a U.S. federal law known as the Foreign Corrupt Practices Act which prohibits companies from paying bribes in other countries.
Naraya Manepally, CEO of an Indian manufacturer, explained that small bribes are simply part of the cost of doing business in this country. He called the demands for cash from state and municipal inspectors “obligations” and said small companies like his really have no choice but to pay them. The company has a subsidiary which partners with a Minnesota company. Together, they make filters for automobiles and industrial uses.
“We plan for obligations,” he said in a veiled reference to bribes that initially went over my head. “Obligations come on a daily level. Inspectors and others come and ask for money. You will have to pay them,” he said in a matter-of-fact tone.
Gul Iqbal, who worked 30 years for IBM, said government employees are underpaid and that is why they frequently ask to be paid on the side. “The biggest problem in India is the low-paid government employees,” he said.
Several experts on conducting business in India advised our delegation that U.S. companies should find an Indian partner if they want to succeed here. They said it is very difficult for a foreign company to come to Indian and launch a business without local help – a believable assertion given the complexity of life here, from its numerous languages, untenable logistics, and multiple layers of government.
“You have to find an Indian partner if you want to sell here, especially if you are new,” explained Mark Russell of U.S. Commercial Service with the American Embassy. “New products need licenses and you need clearances. It is almost impossible for a U.S. company to get clearances without a local partner.”
Manepally implied that local partners could take care of nuisance bribes, insulating the American company. He clarified, however, that business people considering operating in India should follow the law. “Only deal with white money, don’t deal in the gray areas,” he advised.
I asked him about the seeming contradiction. He noted that on big, federal requirements, like the payment of taxes, enforcement is strict and business people need to comply. “You will get caught if you don’t,” he said. Municipal inspections, however, are less formal although local inspectors can shut an operation down. “You should just plan in your budget to set aside some money for them,” he said.
Not everyone, however, agreed that people need to pay bribes in order to do business here. Gayatri Yadav, who works for General Mills’ operation in India, said they do not pay bribes. “The multi-nationals make it clear from the outset they will not do bribes in India. You can do business honestly in India,” she said.
Som Mittal, a senior vice president for Hewlett Packard in India, commented: “We have done six joint ventures and we never paid. There were delays, but when word gets out that you don’t pay, they leave you alone.”
When I asked other members of the Minnesota delegation what they thought about the need to pay bribes, they all said that no business person should ever consider it. Even acknowledging delays in getting licenses and other municipal approvals, they uniformly said they would never pay a bribe.
“Bribe,” of course, is my word and perhaps it is too strong. Manepally may have used the word “obligation” for more purpose that merely obfuscation. The delegation is staying at the magnificent Leela Palace and when the bellhop brought my bag to my room he held out his hand. I gave him money. Was it a tip or a bribe? Certainly if I refused him I could expect my luggage delivery to be a little slower the next time. The bellhop, like the factory is inspector, is paid a wage. In both cases, their official earnings are probably small. Is it wrong for them to ask for a little more? Is it wrong for me, the customer, to give the guy a few bucks, or I mean rupees?
The bribery issue certainly complicates the thinking a business person might put into the prospects of doing business here. If you work for a large, well-branded company, it is easy to say you will never pay a bribe. The country wants these kinds of companies so much that it is not likely to push for bribes if they run into initial resistance. A small start-up with no reputation certainly would not get similar treatment. A clerk at a license bureau just might not get around to notarizing your application until an under-the-table payment is made. Inspectors may well hold up construction approval on a new factory for such a company for months, if not years. This kind of lost time is costly and could sink the company.
Business can be messy and an entrepreneur has to decide when they embark on a new venture whether they really want to get their hands dirty, especially if they want to do business in India.
Naraya Manepally, CEO of an Indian manufacturer, explained that small bribes are simply part of the cost of doing business in this country. He called the demands for cash from state and municipal inspectors “obligations” and said small companies like his really have no choice but to pay them. The company has a subsidiary which partners with a Minnesota company. Together, they make filters for automobiles and industrial uses.
“We plan for obligations,” he said in a veiled reference to bribes that initially went over my head. “Obligations come on a daily level. Inspectors and others come and ask for money. You will have to pay them,” he said in a matter-of-fact tone.
Gul Iqbal, who worked 30 years for IBM, said government employees are underpaid and that is why they frequently ask to be paid on the side. “The biggest problem in India is the low-paid government employees,” he said.
Several experts on conducting business in India advised our delegation that U.S. companies should find an Indian partner if they want to succeed here. They said it is very difficult for a foreign company to come to Indian and launch a business without local help – a believable assertion given the complexity of life here, from its numerous languages, untenable logistics, and multiple layers of government.
“You have to find an Indian partner if you want to sell here, especially if you are new,” explained Mark Russell of U.S. Commercial Service with the American Embassy. “New products need licenses and you need clearances. It is almost impossible for a U.S. company to get clearances without a local partner.”
Manepally implied that local partners could take care of nuisance bribes, insulating the American company. He clarified, however, that business people considering operating in India should follow the law. “Only deal with white money, don’t deal in the gray areas,” he advised.
I asked him about the seeming contradiction. He noted that on big, federal requirements, like the payment of taxes, enforcement is strict and business people need to comply. “You will get caught if you don’t,” he said. Municipal inspections, however, are less formal although local inspectors can shut an operation down. “You should just plan in your budget to set aside some money for them,” he said.
Not everyone, however, agreed that people need to pay bribes in order to do business here. Gayatri Yadav, who works for General Mills’ operation in India, said they do not pay bribes. “The multi-nationals make it clear from the outset they will not do bribes in India. You can do business honestly in India,” she said.
Som Mittal, a senior vice president for Hewlett Packard in India, commented: “We have done six joint ventures and we never paid. There were delays, but when word gets out that you don’t pay, they leave you alone.”
When I asked other members of the Minnesota delegation what they thought about the need to pay bribes, they all said that no business person should ever consider it. Even acknowledging delays in getting licenses and other municipal approvals, they uniformly said they would never pay a bribe.
“Bribe,” of course, is my word and perhaps it is too strong. Manepally may have used the word “obligation” for more purpose that merely obfuscation. The delegation is staying at the magnificent Leela Palace and when the bellhop brought my bag to my room he held out his hand. I gave him money. Was it a tip or a bribe? Certainly if I refused him I could expect my luggage delivery to be a little slower the next time. The bellhop, like the factory is inspector, is paid a wage. In both cases, their official earnings are probably small. Is it wrong for them to ask for a little more? Is it wrong for me, the customer, to give the guy a few bucks, or I mean rupees?
The bribery issue certainly complicates the thinking a business person might put into the prospects of doing business here. If you work for a large, well-branded company, it is easy to say you will never pay a bribe. The country wants these kinds of companies so much that it is not likely to push for bribes if they run into initial resistance. A small start-up with no reputation certainly would not get similar treatment. A clerk at a license bureau just might not get around to notarizing your application until an under-the-table payment is made. Inspectors may well hold up construction approval on a new factory for such a company for months, if not years. This kind of lost time is costly and could sink the company.
Business can be messy and an entrepreneur has to decide when they embark on a new venture whether they really want to get their hands dirty, especially if they want to do business in India.
Tuesday, October 23, 2007
Do they really want us?
While we are being greeted warmly, I am picking up little undercurrents which give me some skepticism about the prospects of conducting business in India. On Monday, a local business official expressed indifference toward on Minnesotan’s concern over high import tariffs, and yesterday a key government minister expressed little interest in helping a group of Minnesota business leaders bring their products and services to India.
About 20 members of the Minnesota trade mission delegation visited the Ministry of the Environment & Forests on Tuesday. Several delegates represent companies that produce products that could help India reduce pollution and waste, or otherwise operate in a “greener” fashion. Minnesota State Senator Satveer Chaudhary opened the meeting, while Steve Riedel, Minnesota’s international trade representative, following up. We were fortunate enough to meet with Meena Gupta, the Minister of Environment & Forests. She was accompanied by an aide R.H. Khwaja, who was educated at the University of Minnesota.
Mark Aulik, president of a Jordan, Minn.-based company that helps meat processors render typically unusable animal parts, asked for help bringing his product to India. Sam Roy, president and CEO of EPS Technologies of Mankato, Minn., sought direction for his effort to bring technology to the country which would help increase the efficiency of diesel engines in trucks and busses. “We want to know how we can get our technology to your country. Can you give us a clear vision?” Roy asked.
Minister Gupta’s answer was disappointing. “We are the ministry of the environment,” she said. “You need to visit with the ministry of commerce … This ministry will not be able to give you an answer.”
I thought it was an odd response to a group of influential business leaders who had traveled half way around the world to explore business potential in India. Even if she really couldn’t help, I am surprised that she didn’t offer a more politically accommodating response. Her blunt answers really did not make anyone feel particularly welcome.
Aulik, who has spent considerable time traveling around India, offered a suggestion about pollution control laws that Gupta utterly rejected. He suggested that the country’s current pollution standard on waste water from factories is so stringent that no one tries to meet it. He said he had tested drinking water from the tap in several Indian locations and found that even that water did not meet the requirements for industrial waste water. Aulik said that if the municipalities can’t even clean up the drinking water to meet industrial pollution standards, how can companies be expected to meet that standard?
Aulik suggested lowering the standard to something more attainable. “If people worked toward an attainable level and accomplished even half that goal, it would still be a significant improvement over current conditions,” Aulik explained.
Gupta outright dismissed the suggestion. “It would not be very politically acceptable to lower the standard,” she said, ignoring the practical implication of her position.
Also, when Boris Miksic, president and CEO of Cortec Corporation in St. Paul, explained an agreement his company just reached with an Indian state to sell biodegradable plastic bags there, Gupta showed little interest.
And, Carmine D’Aloisio, a member of the U.S. Embassy staff in charge of commercial affairs, commented that prohibitively high tariffs keep a lot of environmentally sound technologies from being imported into the country. Again, Gupta offered no response.
Gupta’s indifference matched the attitude that I picked up from Phiroz Jandrevala, head of the Confederation of Indian Industries. In a luncheon presentation on Monday, Jandrevala seemed to offer a particularly callous response to a question about high tariffs which make it difficult for many American companies to bring products into India. He essentially told the business audience to pass the cost on the buyer. He refused to acknowledge a problem with the level of tariffs. While high today, he noted tariffs were much higher 60 years ago.
Perhaps the responses from Gupta and Jandrevala are a sign of the country’s success. So much foreign business investment is pouring into the country that they don’t need to concern themselves with barriers that might be making it difficult for small and medium size companies to do business here.
In my mind, the jury is still out about whether India is a good place for American companies to do business. On the one hand, there is definitely opportunity here, and the initial country reaction to newcomers seems welcoming. But, on the other hand, when you start considering specific details, some business and government sectors do not appear overly excited about the prospects of foreign companies setting up shop here.
About 20 members of the Minnesota trade mission delegation visited the Ministry of the Environment & Forests on Tuesday. Several delegates represent companies that produce products that could help India reduce pollution and waste, or otherwise operate in a “greener” fashion. Minnesota State Senator Satveer Chaudhary opened the meeting, while Steve Riedel, Minnesota’s international trade representative, following up. We were fortunate enough to meet with Meena Gupta, the Minister of Environment & Forests. She was accompanied by an aide R.H. Khwaja, who was educated at the University of Minnesota.
Mark Aulik, president of a Jordan, Minn.-based company that helps meat processors render typically unusable animal parts, asked for help bringing his product to India. Sam Roy, president and CEO of EPS Technologies of Mankato, Minn., sought direction for his effort to bring technology to the country which would help increase the efficiency of diesel engines in trucks and busses. “We want to know how we can get our technology to your country. Can you give us a clear vision?” Roy asked.
Minister Gupta’s answer was disappointing. “We are the ministry of the environment,” she said. “You need to visit with the ministry of commerce … This ministry will not be able to give you an answer.”
I thought it was an odd response to a group of influential business leaders who had traveled half way around the world to explore business potential in India. Even if she really couldn’t help, I am surprised that she didn’t offer a more politically accommodating response. Her blunt answers really did not make anyone feel particularly welcome.
Aulik, who has spent considerable time traveling around India, offered a suggestion about pollution control laws that Gupta utterly rejected. He suggested that the country’s current pollution standard on waste water from factories is so stringent that no one tries to meet it. He said he had tested drinking water from the tap in several Indian locations and found that even that water did not meet the requirements for industrial waste water. Aulik said that if the municipalities can’t even clean up the drinking water to meet industrial pollution standards, how can companies be expected to meet that standard?
Aulik suggested lowering the standard to something more attainable. “If people worked toward an attainable level and accomplished even half that goal, it would still be a significant improvement over current conditions,” Aulik explained.
Gupta outright dismissed the suggestion. “It would not be very politically acceptable to lower the standard,” she said, ignoring the practical implication of her position.
Also, when Boris Miksic, president and CEO of Cortec Corporation in St. Paul, explained an agreement his company just reached with an Indian state to sell biodegradable plastic bags there, Gupta showed little interest.
And, Carmine D’Aloisio, a member of the U.S. Embassy staff in charge of commercial affairs, commented that prohibitively high tariffs keep a lot of environmentally sound technologies from being imported into the country. Again, Gupta offered no response.
Gupta’s indifference matched the attitude that I picked up from Phiroz Jandrevala, head of the Confederation of Indian Industries. In a luncheon presentation on Monday, Jandrevala seemed to offer a particularly callous response to a question about high tariffs which make it difficult for many American companies to bring products into India. He essentially told the business audience to pass the cost on the buyer. He refused to acknowledge a problem with the level of tariffs. While high today, he noted tariffs were much higher 60 years ago.
Perhaps the responses from Gupta and Jandrevala are a sign of the country’s success. So much foreign business investment is pouring into the country that they don’t need to concern themselves with barriers that might be making it difficult for small and medium size companies to do business here.
In my mind, the jury is still out about whether India is a good place for American companies to do business. On the one hand, there is definitely opportunity here, and the initial country reaction to newcomers seems welcoming. But, on the other hand, when you start considering specific details, some business and government sectors do not appear overly excited about the prospects of foreign companies setting up shop here.
Monday, October 22, 2007
Getting down to business
Our trade mission began Monday with a day-long seminar on the Indian economy and business environment. In Ballroom I of the Hyatt where we are staying, we got a thorough economic overview, presented by officials from the American Embassy here, and from various Indian trade groups.
While much of the opportunity here related to the growing middle class was re-iterated, the challenges of doing business also were explained. Manish Mathur, a principal with the consulting firm A.T. Kearney Ltd., explained, for example, logistical difficulties. Average ship turn-around time in an Indian seaport is seven days, compared to a place such as Singapore, where it is six to eight hours. The average ground speed of transportation is 30 to 40 kilometers per hour. “That is too slow,” Mathur said. “I see this holding the country’s growth back for five years.”
To be sure, enormous investments in infrastructure are expected. John Davison, minister counselor for economic affairs with the U.S. State Department, said $500 billion will need to be invested in the country’s roads in the next five years.
Logistical challenges, plus other factors, cause India to be ranked low compared to other countries in terms of “ease of doing business.” Based on numerous factors, Mathur said his firm ranks India 120th in the world. The United States ranks 3rd and China ranks 83rd. More specifically, India ranked 111th for ease of starting a business, 134th for licensing, and 177th for enforcing contracts.
Still, investment is pouring into the country. India currently ranks second in the world (behind China) for direct foreign investment (DFI), up from 15th in 2002. Davison noted that in the first six months of 2007, DFI was at an all-time high for India.
Holly Higgins, minister counselor for agricultural affairs with the U.S. Department of Agriculture, described the country’s farm economy. Farming is important here, making up 20 percent of the country’s GDP, although that proportion is diminishing as other sectors grow. The nation has 114 million farms, averaging 3.5 acres in size. About 120 million people depend on farming directly for their livelihood, while another 600 million depend on it indirectly.
Higgins noted that farms within 120 miles of major cities are faring the best because there is opportunity for them to bring their commodities to markets, where demand for good fresh-grown produce and farm products is strong.
I have often heard India described as a country of contrasts and I guess that aptly describes a country where 600 million people live on less than $2 per day, yet cell phones are selling at a rate of 7 million per month. In the evening, we left our comfortable hotel surroundings on a bus to visit with David Mulford, the distinguished U.S. Ambassador to India. As we drove to his palatial residence – a building which inspired the architecture for the Kennedy Center in Washington, D.C. – we saw what must have been thousands of people living in squalor. The roads are lined with shanties of mud, canvas tarp and scraps of metal. I had seen these kinds of living conditions in Bogota, but here they go on seemingly forever. In Bogota, they were confined to smaller areas.
I am told people are coming to Delhi to live from the countryside at a rate of 300,000 per year. At that rate, it seems the makeshift housing will only grow. Can these millions of people be lifted into a standard of living where they have sufficient housing, clothing, and regular meals? Clearly, the Indian government recognizes the challenge. The mantra of the current government is “inclusive growth.” Strong GDP growth won’t mean much if it fails to include three-fourths of the country’s population.
That’s one of the reasons the Indian government is happy to host trade missions like the one I am on. Ambassador Mulford said the United States is eager to help and noted trade missions from other states which recently had been through Delhi. Business delegations from three other states are scheduled to come through in the next month, he said.
While much of the opportunity here related to the growing middle class was re-iterated, the challenges of doing business also were explained. Manish Mathur, a principal with the consulting firm A.T. Kearney Ltd., explained, for example, logistical difficulties. Average ship turn-around time in an Indian seaport is seven days, compared to a place such as Singapore, where it is six to eight hours. The average ground speed of transportation is 30 to 40 kilometers per hour. “That is too slow,” Mathur said. “I see this holding the country’s growth back for five years.”
To be sure, enormous investments in infrastructure are expected. John Davison, minister counselor for economic affairs with the U.S. State Department, said $500 billion will need to be invested in the country’s roads in the next five years.
Logistical challenges, plus other factors, cause India to be ranked low compared to other countries in terms of “ease of doing business.” Based on numerous factors, Mathur said his firm ranks India 120th in the world. The United States ranks 3rd and China ranks 83rd. More specifically, India ranked 111th for ease of starting a business, 134th for licensing, and 177th for enforcing contracts.
Still, investment is pouring into the country. India currently ranks second in the world (behind China) for direct foreign investment (DFI), up from 15th in 2002. Davison noted that in the first six months of 2007, DFI was at an all-time high for India.
Holly Higgins, minister counselor for agricultural affairs with the U.S. Department of Agriculture, described the country’s farm economy. Farming is important here, making up 20 percent of the country’s GDP, although that proportion is diminishing as other sectors grow. The nation has 114 million farms, averaging 3.5 acres in size. About 120 million people depend on farming directly for their livelihood, while another 600 million depend on it indirectly.
Higgins noted that farms within 120 miles of major cities are faring the best because there is opportunity for them to bring their commodities to markets, where demand for good fresh-grown produce and farm products is strong.
I have often heard India described as a country of contrasts and I guess that aptly describes a country where 600 million people live on less than $2 per day, yet cell phones are selling at a rate of 7 million per month. In the evening, we left our comfortable hotel surroundings on a bus to visit with David Mulford, the distinguished U.S. Ambassador to India. As we drove to his palatial residence – a building which inspired the architecture for the Kennedy Center in Washington, D.C. – we saw what must have been thousands of people living in squalor. The roads are lined with shanties of mud, canvas tarp and scraps of metal. I had seen these kinds of living conditions in Bogota, but here they go on seemingly forever. In Bogota, they were confined to smaller areas.
I am told people are coming to Delhi to live from the countryside at a rate of 300,000 per year. At that rate, it seems the makeshift housing will only grow. Can these millions of people be lifted into a standard of living where they have sufficient housing, clothing, and regular meals? Clearly, the Indian government recognizes the challenge. The mantra of the current government is “inclusive growth.” Strong GDP growth won’t mean much if it fails to include three-fourths of the country’s population.
That’s one of the reasons the Indian government is happy to host trade missions like the one I am on. Ambassador Mulford said the United States is eager to help and noted trade missions from other states which recently had been through Delhi. Business delegations from three other states are scheduled to come through in the next month, he said.
Sunday, October 21, 2007
The Taj
Many of the stories I have read about India in the business press note its inadequate infrastructure. While companies can feel confident about the labor force that might built a product, it might feel uncertain about its ability to move the product from one place to another, from the factory to the port. Our first day in Delhi gave credence to such concerns.
It was 78 degrees out when our plan landed in Delhi at 12:35 a.m. on Sunday, Oct. 20. Upon deplaning, it took an hour to get through the immigration station and collect our luggage. We were greeted warmly by the staff at the Hyatt Regency, where we are staying, but it was 3 before anyone got to bed.
By 8 the next morning, we were on a bus, headed 120 miles southeast to Agra, the city of the Taj Mahal. What an education I received, simply looking out the window during the five-hour trip. I saw nine people sleeping under a bridge, wrapped from head to toe in blankets. There were lots of animals, including elephants, camels, monkeys, orangutans, oxen, donkeys and cows. Some were tethered to posts, others roamed free, but none of them seemed to move too fast. The traffic, already disorienting to this American because everyone drives on the left side of the street, was intense, with little attention seeming to be paid to road signs, including stop lights and lane markers.
A four-lane road leads to Agra and about half way there, we see thousands of people marching in the opposite direction, many of them carrying flags. They are taking up a full lane, forcing traffic on that side of the street down to a single lane. Our guide explained the protestors are marching to Delhi, where thousands plan to meet Oct.29 for a massive demonstration against the government. The issue has to do with the confiscation of their land by government for economic development purposes. V.K. Singh, of Mercury Travels Limited in Agra, gave us an example. He said the Tata Group, a large Indian manufacturing company, worked with the government to acquire land in Calcutta in order to build an auto assembly plant. The construction displaced many locals. They do not believe they were fairly compensated for their land, and so now they protesting. Apparently, this is going on all over the country.
During the bus ride, our host Gov. Tim Pawlenty, worked the crowd, stopping at each row to talk to at length. I am told this is a significant change from the behavior of the previous governor, Jesse Venture. When he led a trade mission to Mexico, he apparently never visited with any of the people accompanying him. I talked to the governor about the sister city agreement he is set to sign with Haryana on the trip. I ask what he thinks of the idea of a neighborhood, like the one I live in, arranging for a sister neighborhood relationship. Linden Hills, I commented, might be interested in such a thing. Gov. Pawlenty said he liked the idea and encouraged me to contact the India Center at the University of Minnesota to pursue it.
The Taj Mahal, or simple “The Taj” as locals call it, is spectacular. There apparently are concerns about pollution in the area near the landmark, so we get off the bus a mile or two away and get on electric buses, which take us the final distance. We are given about 90 minutes to explore. It is a cloudless, warm day, and the Taj stands magnificently on the horizon. It is built atop two platforms, which the guide said makes it appear taller than it actually is. Four towers on the corner of the building give the monument additional visual appeal. They are constructed to lean outward at a 2 degree angle so that if an earthquake ever struck the area, they would fall outward rather than onto the Taj itself.
The area is crowded, the number of people increasing the near to the Taj as I advance. We are required to remove our shoes, or to put slipper-like coverings over our shoes. I feel a little bit like an astronaut slipping the big blue cloth coverings over my black Rockports. I took many pictures of the building – probably 25 or so – and so is everyone else. They say the Taj is the most-photographed building in the world and I believe it, based on what I see.
A door far too small to accommodate all the people, lets visitors in and out of the Taj. Upon entry, however, I am disappointed. I expected more. It is dark inside, and all of the walls are white. This is a magnificent building, but inside it does not compare to the great cathedrals of Europe like Notre Dame in Paris, or St. Peter’s Basilica in Rome.
Time goes quickly and we have to return to the bus. Dozens of vendors approach me to buy souvenirs, mostly little wooden statues, books and jewelry. They name a price and then a lower price. Eventually they ask me to name my price. I have no interest. I am not going to buy anything here. They are very persistent, continuing to lobby for my attention through the window even after I have found my seat on the bus.
We exchange stories on the bus; a couple of people in the group saw Mick Jaggar, accompanies by a very tall women. Sam Roy of Mankato even got a picture of them.
On the way back, we stop at the home of Ararati and Vishnu Lall. They are in the jewelry business, selling all over the world. They have a beautiful home in Agra, and treat the entire delegation of refreshments, consisting of tea, other drinks and cake. Vilash Lall, the sixth generation son, tells us a little bit about doing business in India. He noted the instability of the state governments. “They last only eight or nine months,” he said. Many organizations get around the law by setting up phony “front” businesses, while the real unauthorized work goes on “in the back.” He did not provide details, but one can imagine.
He also expressed some concern over a certain amount of greediness, saying that a typical hotel room in India might cost the equivalent of $300 or $400 per night, when then exact same room can be had in other major cities around the world for $150. “People are going to find it too expensive to come here,” he lamented.
The Lalls are relatives of Gopal Khanna, commissioner of the State of Minnesota’s Office of Enterprise Technology. I asked him what he thought about the country’s prospects for continued growth. “India has three things going for it,” Khanna said. “First, the people here have a genuine interest in learning and education. Second, the people here are entrepreneurial. It is in their DNA. It has always been that way, for thousands of years. And third, the country is willing to accept people of different philosophies and religions. We are a true pluralistic society. This is the mark of a true democracy.”
“Do you think the economy will lift a half a billion people from the ranks of poverty to a middle class lifestyle?” I ask.
“It is a 100-year project,” he said.
It is about 6 p.m. when we begin our ride back. I am tired, having slept only a few hours the night before. The drive is going smoothly until 7:50 when we come to a complete stop on the highway. The two lanes of traffic going northwest are not moving, and some vehicles have cross the median and are attempting to advance on the road going the opposite way. That two-lane portion of the highway has been reduced to one lane to make way for on-coming traffic. Even with this accommodation, however, nobody is moving.
There is uncertainty about the situation. What is the hold up? How long will it last? People in other cars are getting out and walking around. Finally, it is determined that the road is being blocked by those protestors we saw on the way out. They have set up camp on our side of the road and no one can get through. We have no idea how long we will be tied up, and at one point many people get off the bus and walk over to a restaurant for something to drink. A couple of times, it looked like we were going to advance, but after a few feet of movement, those hopes were dashed.
Everyone on the bus seems good natured about it. We are told that if you plan to do business in India, you have to “roll with the punches.”
At 10:15 p.m., we finally break through the log jam and traffic starts moving again. We are 98 kilometers or about 60 miles from Delhi. I spend the remainder of the ride talking to Sam Roy, president of EPS Technologies in Mankato, Minn. His company is bringing a new product to market which will vastly increase the efficiency of diesel engines. The product already is in use in Thailand, and he wants to bring it to India. He said truck and bus owners can save big money with his product, in addition to substantially reducing green house gas emissions. He was looking forward to the remainder of the mission trip, during which he planned to meet with potential Indian partners.
At about midnight, we roll into the hotel driveway. It has been an amazing day. India is a land of great potential, I can see. But logistics are a problem. If a major highway can be shut down by a protest, how reliable is the transportation system? Companies that set up here to manufacture need to be able to count on moving their products in a timely fashion. They need to be able to rely on the road systems, train system, airports and seaports. Perhaps they can, but the delays on the highway would really concern me if I had to rely on them on a regular basis.
It was 78 degrees out when our plan landed in Delhi at 12:35 a.m. on Sunday, Oct. 20. Upon deplaning, it took an hour to get through the immigration station and collect our luggage. We were greeted warmly by the staff at the Hyatt Regency, where we are staying, but it was 3 before anyone got to bed.
By 8 the next morning, we were on a bus, headed 120 miles southeast to Agra, the city of the Taj Mahal. What an education I received, simply looking out the window during the five-hour trip. I saw nine people sleeping under a bridge, wrapped from head to toe in blankets. There were lots of animals, including elephants, camels, monkeys, orangutans, oxen, donkeys and cows. Some were tethered to posts, others roamed free, but none of them seemed to move too fast. The traffic, already disorienting to this American because everyone drives on the left side of the street, was intense, with little attention seeming to be paid to road signs, including stop lights and lane markers.
A four-lane road leads to Agra and about half way there, we see thousands of people marching in the opposite direction, many of them carrying flags. They are taking up a full lane, forcing traffic on that side of the street down to a single lane. Our guide explained the protestors are marching to Delhi, where thousands plan to meet Oct.29 for a massive demonstration against the government. The issue has to do with the confiscation of their land by government for economic development purposes. V.K. Singh, of Mercury Travels Limited in Agra, gave us an example. He said the Tata Group, a large Indian manufacturing company, worked with the government to acquire land in Calcutta in order to build an auto assembly plant. The construction displaced many locals. They do not believe they were fairly compensated for their land, and so now they protesting. Apparently, this is going on all over the country.
During the bus ride, our host Gov. Tim Pawlenty, worked the crowd, stopping at each row to talk to at length. I am told this is a significant change from the behavior of the previous governor, Jesse Venture. When he led a trade mission to Mexico, he apparently never visited with any of the people accompanying him. I talked to the governor about the sister city agreement he is set to sign with Haryana on the trip. I ask what he thinks of the idea of a neighborhood, like the one I live in, arranging for a sister neighborhood relationship. Linden Hills, I commented, might be interested in such a thing. Gov. Pawlenty said he liked the idea and encouraged me to contact the India Center at the University of Minnesota to pursue it.
The Taj Mahal, or simple “The Taj” as locals call it, is spectacular. There apparently are concerns about pollution in the area near the landmark, so we get off the bus a mile or two away and get on electric buses, which take us the final distance. We are given about 90 minutes to explore. It is a cloudless, warm day, and the Taj stands magnificently on the horizon. It is built atop two platforms, which the guide said makes it appear taller than it actually is. Four towers on the corner of the building give the monument additional visual appeal. They are constructed to lean outward at a 2 degree angle so that if an earthquake ever struck the area, they would fall outward rather than onto the Taj itself.
The area is crowded, the number of people increasing the near to the Taj as I advance. We are required to remove our shoes, or to put slipper-like coverings over our shoes. I feel a little bit like an astronaut slipping the big blue cloth coverings over my black Rockports. I took many pictures of the building – probably 25 or so – and so is everyone else. They say the Taj is the most-photographed building in the world and I believe it, based on what I see.
A door far too small to accommodate all the people, lets visitors in and out of the Taj. Upon entry, however, I am disappointed. I expected more. It is dark inside, and all of the walls are white. This is a magnificent building, but inside it does not compare to the great cathedrals of Europe like Notre Dame in Paris, or St. Peter’s Basilica in Rome.
Time goes quickly and we have to return to the bus. Dozens of vendors approach me to buy souvenirs, mostly little wooden statues, books and jewelry. They name a price and then a lower price. Eventually they ask me to name my price. I have no interest. I am not going to buy anything here. They are very persistent, continuing to lobby for my attention through the window even after I have found my seat on the bus.
We exchange stories on the bus; a couple of people in the group saw Mick Jaggar, accompanies by a very tall women. Sam Roy of Mankato even got a picture of them.
On the way back, we stop at the home of Ararati and Vishnu Lall. They are in the jewelry business, selling all over the world. They have a beautiful home in Agra, and treat the entire delegation of refreshments, consisting of tea, other drinks and cake. Vilash Lall, the sixth generation son, tells us a little bit about doing business in India. He noted the instability of the state governments. “They last only eight or nine months,” he said. Many organizations get around the law by setting up phony “front” businesses, while the real unauthorized work goes on “in the back.” He did not provide details, but one can imagine.
He also expressed some concern over a certain amount of greediness, saying that a typical hotel room in India might cost the equivalent of $300 or $400 per night, when then exact same room can be had in other major cities around the world for $150. “People are going to find it too expensive to come here,” he lamented.
The Lalls are relatives of Gopal Khanna, commissioner of the State of Minnesota’s Office of Enterprise Technology. I asked him what he thought about the country’s prospects for continued growth. “India has three things going for it,” Khanna said. “First, the people here have a genuine interest in learning and education. Second, the people here are entrepreneurial. It is in their DNA. It has always been that way, for thousands of years. And third, the country is willing to accept people of different philosophies and religions. We are a true pluralistic society. This is the mark of a true democracy.”
“Do you think the economy will lift a half a billion people from the ranks of poverty to a middle class lifestyle?” I ask.
“It is a 100-year project,” he said.
It is about 6 p.m. when we begin our ride back. I am tired, having slept only a few hours the night before. The drive is going smoothly until 7:50 when we come to a complete stop on the highway. The two lanes of traffic going northwest are not moving, and some vehicles have cross the median and are attempting to advance on the road going the opposite way. That two-lane portion of the highway has been reduced to one lane to make way for on-coming traffic. Even with this accommodation, however, nobody is moving.
There is uncertainty about the situation. What is the hold up? How long will it last? People in other cars are getting out and walking around. Finally, it is determined that the road is being blocked by those protestors we saw on the way out. They have set up camp on our side of the road and no one can get through. We have no idea how long we will be tied up, and at one point many people get off the bus and walk over to a restaurant for something to drink. A couple of times, it looked like we were going to advance, but after a few feet of movement, those hopes were dashed.
Everyone on the bus seems good natured about it. We are told that if you plan to do business in India, you have to “roll with the punches.”
At 10:15 p.m., we finally break through the log jam and traffic starts moving again. We are 98 kilometers or about 60 miles from Delhi. I spend the remainder of the ride talking to Sam Roy, president of EPS Technologies in Mankato, Minn. His company is bringing a new product to market which will vastly increase the efficiency of diesel engines. The product already is in use in Thailand, and he wants to bring it to India. He said truck and bus owners can save big money with his product, in addition to substantially reducing green house gas emissions. He was looking forward to the remainder of the mission trip, during which he planned to meet with potential Indian partners.
At about midnight, we roll into the hotel driveway. It has been an amazing day. India is a land of great potential, I can see. But logistics are a problem. If a major highway can be shut down by a protest, how reliable is the transportation system? Companies that set up here to manufacture need to be able to count on moving their products in a timely fashion. They need to be able to rely on the road systems, train system, airports and seaports. Perhaps they can, but the delays on the highway would really concern me if I had to rely on them on a regular basis.
Saturday, October 20, 2007
Travel
Sitting in coach for 15 hours is not a particularly pleasant experience, although it is the price of admission to India for any Minnesotan. My journey started Friday evening at Minneapolis/St Paul airport, where more than 400 people loaded onto the Northwest airline flight to Amsterdam. The flight was oversold and when they offered people travel vouchers worth $750 to exchange their seat for the same flight the next day, I considered if for a moment. I would like to take my family to Florida this winter. Seven hundred and fifty dollars would pay for at least two airfares. But I stuck with my original plan. Going a day later would mean missing an opportunity to see the Taj Mahal.
It took seven and half hours to fly from Minneapolis to Amsterdam. I sat next to a guy who sells pipes. He said he had been to India, and that he had mixed feelings about it. He said he had a hard time adjusting the Indian cultural norms in business where for the sake of politeness, people usually say “yes” even if they really mean “no.” Like most Americans, he would rather have clarity than politeness.
The pipe salesman asked me if I was traveling to Calcutta. He said “there are a lot of beggars, many of them don’t make it through the night. In the morning you see dead bodies on the street.” No, I am not going to Calcutta, but perhaps on another trip I will.
The first people I see on the jetway coming off the aircraft are two soldiers dressed in black carrying machines guns – on has black skin, the other white. I wonder why they are there. They make no expression as I pass.
The Amsterdam airport is busy, and I immediately locate the gate where I need to catch my connecting flight to Delhi – F4. As I walk through the corridors, past the coffee shops and small stores, I notice something: people can smoke here. Living in Minnesota, I don’t think I have seen a person smoke indoors in a public building since the mid-1970s. I look out the window and see flatness. There are not mountains or hills on the horizon.
There was only an hour scheduled between flights, so I had to hustle. The line for boarding is a mile long, but there is a separate line for people who hold an “elite” flying status. A while back, Northwest Airlines mailed me a silver status membership card. Apparently it gets me into the shorter line. I actually feel a little guilty as I look back at the line that goes back and around a corner. But not too guilty. I use the shorter line.
When everyone is boarded on the KLM DC-10, we are informed of a mechanical problem. We were told we might have to change aircraft. What a disappointment! As it is, we were going to get into Delhi late, giving us only a few hours of sleep before the all-day excursion to see the Taj. Now we would be getting in even later. Some two hours later, we left. Never had to change planes. We were told they fixed the problem.
It was difficult sleeping on either of the flights. I may have gotten some sleep on the first leg, but no more than a few minutes on the second. I am passing the time journaling and reading a book by G.K. Chesterton. I had read Othodoxy 20 years ago, and I selected it off my bookshelf at home because the books size (150-page paperback) made it easy to carry in my briefcase. When traveling, you have to consider the difficulty of carrying everything. Chesterton’s wisdom is illuminating. I had forgotten most of his message, which centers on the idea that there is a God; there is objective right and wrong. We are not to make up the rules as we go; if we do, we will destroy ourselves.
Before I left home, John, my 10-year-old gave me his medal of St. Michael the archangel. “He’ll keep you safe” John said.
“You couldn’t do much better than to have St. Michael’s protection,” I said, thanking my incredibly sensitive boy. I love my wife and children. The only downside taking a trip to India for business is the extended time away from family. I will miss them. I do already. But this blog makes it a little easier for us to stay connected.
It took seven and half hours to fly from Minneapolis to Amsterdam. I sat next to a guy who sells pipes. He said he had been to India, and that he had mixed feelings about it. He said he had a hard time adjusting the Indian cultural norms in business where for the sake of politeness, people usually say “yes” even if they really mean “no.” Like most Americans, he would rather have clarity than politeness.
The pipe salesman asked me if I was traveling to Calcutta. He said “there are a lot of beggars, many of them don’t make it through the night. In the morning you see dead bodies on the street.” No, I am not going to Calcutta, but perhaps on another trip I will.
The first people I see on the jetway coming off the aircraft are two soldiers dressed in black carrying machines guns – on has black skin, the other white. I wonder why they are there. They make no expression as I pass.
The Amsterdam airport is busy, and I immediately locate the gate where I need to catch my connecting flight to Delhi – F4. As I walk through the corridors, past the coffee shops and small stores, I notice something: people can smoke here. Living in Minnesota, I don’t think I have seen a person smoke indoors in a public building since the mid-1970s. I look out the window and see flatness. There are not mountains or hills on the horizon.
There was only an hour scheduled between flights, so I had to hustle. The line for boarding is a mile long, but there is a separate line for people who hold an “elite” flying status. A while back, Northwest Airlines mailed me a silver status membership card. Apparently it gets me into the shorter line. I actually feel a little guilty as I look back at the line that goes back and around a corner. But not too guilty. I use the shorter line.
When everyone is boarded on the KLM DC-10, we are informed of a mechanical problem. We were told we might have to change aircraft. What a disappointment! As it is, we were going to get into Delhi late, giving us only a few hours of sleep before the all-day excursion to see the Taj. Now we would be getting in even later. Some two hours later, we left. Never had to change planes. We were told they fixed the problem.
It was difficult sleeping on either of the flights. I may have gotten some sleep on the first leg, but no more than a few minutes on the second. I am passing the time journaling and reading a book by G.K. Chesterton. I had read Othodoxy 20 years ago, and I selected it off my bookshelf at home because the books size (150-page paperback) made it easy to carry in my briefcase. When traveling, you have to consider the difficulty of carrying everything. Chesterton’s wisdom is illuminating. I had forgotten most of his message, which centers on the idea that there is a God; there is objective right and wrong. We are not to make up the rules as we go; if we do, we will destroy ourselves.
Before I left home, John, my 10-year-old gave me his medal of St. Michael the archangel. “He’ll keep you safe” John said.
“You couldn’t do much better than to have St. Michael’s protection,” I said, thanking my incredibly sensitive boy. I love my wife and children. The only downside taking a trip to India for business is the extended time away from family. I will miss them. I do already. But this blog makes it a little easier for us to stay connected.
Looking for the future in India
Perhaps the greatest economic development challenge of our time is India. I am traveling there this week with a business contingent of 70 Minnesotans to see for myself.
A group of people about the size of the population of the United States lives what we would consider to be a middle-class lifestyle in India, leaving the remaining 800 million people in poverty. That’s a lot of poor people but the country’s annual GDP growth rate of 9 percent offers great hope. Banashri Bose Harrison, the minister of commerce for India at the U.S. Embassy in Washington, D.C., says the ranks of the middle class are growing at a rate of 5 percent per year. At that rate, about 500 million of the country’s poor could advance to middle class lifestyles within 35 years.
Gov. Tim Pawlenty is leading the group of about 50 business leaders, six journalist, a dozen state officials and four travel professionals on the first India mission ever led by a Minnesota governor. Pawlenty wants to promote business between the countries. He says that while the population in the United States is holding relatively flat, the population in India is growing. If Minnesota-based companies are to expand their markets, they are going to have to consider selling in countries that offer growing populations.
Last month, Ashok Kumar Attri, an Indian diplomat living in Chicago, addressed the business delegation during a pre-mission briefing. He described GDP growth of 9.3 percent during the last two years, a rate that he claims is accelerating. During the first three decades after the country gained its independence in 1947, the country’s economy grew at a rate of about 3.5 percent – comparable to the current rate of U.S. GDP growth. It grew to 5.7 percent in the 1980s and it averaged 6.0 percent between 1990 and 2005. Attri says the country expects growth topping 10 percent in the coming years.
He makes that claim based largely on a robust work force – 52 percent of the country’s population is below the age of 25. Even as far into the future as 2025, the median age of the population will only be 30 years old. The total workforce, that is, people between the ages of 15 and 59 currently is 696 million people. That figure is expected to grow to 1.02 billion by 2050.
The country has a solid intellectual base on which to build. Literacy is not confined to the middle class; with a literacy rate of 61 percent, a significant portion of the country’s poor can read. And, among the country’s better-off folks, 380 universities and 11,200 colleges produce more than 50,000 computer professionals per year, and more than 360,000 engineers.
Attri identified eight business sectors that he said offer the greatest prospects for propelling the economy: infrastructure, real estate, retail, IT, pharmaceuticals, biotechnology, entertainment and automobiles. Pawlenty would like Minnesota businesses with expertise in those areas to make the most of the opportunity.
Economists, however, worry about the country’s high rate of inflation, the effects of which have been masked in recent years by the extraordinary economic growth. Rising real estate prices have fueled a good part of that growth. The same easy credit that led to the housing bust in the United States is facilitating a lot of real estate deals in India. If the country were to experience a real estate collapse anything like what the United States is experiencing, it could hurt the country’s economy.
The information packet that Minnesota delegates were given by Pawlenty’s administration noted other problems that plague the country, including a robust human trafficking industry. “India has been on the Tier 2 Watch List since 2004 for its failure to show evidence of increasing efforts to address trafficking in persons,” the state’s briefing states.
The Minnesota delegation will get a whirlwind tour of the country, beginning in New Delhi, the country’s capital, with 12.7 million people. The visit will open with sight seeing at the Taj Mahal, four hours away by bus in Agra. Monday and Tuesday morning are devoted to business in New Delhi, with a reception Monday night at the U.S. Embassy hosted by the U.S. Ambassador to India. Tuesday evening, the group travels to Bangalore, the country’s I.T. center. After two days in the city of 5.7 million people, the group travels to Bombay, which took the name Mumbai in 1995. The island city of 16.4 million is features one of the most dense urban populations in the world.
Pawlenty noted that $129.5 million of the state’s $15 billion in exports go to India, making it the state’s 22nd-largest export country. About half the state’s exports to India are computers made by IBM in Rochester. Pawlenty also noted increasing investment in Minnesota by Indian companies. The Essar Group, for example, is investing $1.6 billion in the Iron Range to open a new mining and steel manufacturing plant. .
Tony Lorusso, the executive director of the Minnesota Trade Office, said: “This trip is just a start of what I hope will be a long relationship with India.”
While the business opportunity is motivating most of the people in this trade mission, I am intrigued by the possibility of a half a billion people moving up and out of poverty over the next 35 to 50 years, grace of a robust economy. Can it really happen? What role can Minnesota companies play in developing India’s economy? More business for Minnesota companies could mean a stronger economy for Indians. One retired businessman I talked to who has been to India several times said he is skeptical. “There are so many people living in poverty, I don’t see how they can do it,” he said.
Certainly there are obstacles, but certainly there is hope. Tom Friedman writes in his book, The World is Flat, that India is the future. It’s educational system, population growth and British-based legal system give it the edge over China, another country experiencing amazing economic growth. I have some expectations about what I will see here: congested traffic, overcrowded sidewalks, beautiful new buildings next to shanty-towns. But what I am going to be looking for is the future. If the country cannot grow its middle class, then perhaps when I look all I will see is the past. But I am going to look really hard to see the future.
A group of people about the size of the population of the United States lives what we would consider to be a middle-class lifestyle in India, leaving the remaining 800 million people in poverty. That’s a lot of poor people but the country’s annual GDP growth rate of 9 percent offers great hope. Banashri Bose Harrison, the minister of commerce for India at the U.S. Embassy in Washington, D.C., says the ranks of the middle class are growing at a rate of 5 percent per year. At that rate, about 500 million of the country’s poor could advance to middle class lifestyles within 35 years.
Gov. Tim Pawlenty is leading the group of about 50 business leaders, six journalist, a dozen state officials and four travel professionals on the first India mission ever led by a Minnesota governor. Pawlenty wants to promote business between the countries. He says that while the population in the United States is holding relatively flat, the population in India is growing. If Minnesota-based companies are to expand their markets, they are going to have to consider selling in countries that offer growing populations.
Last month, Ashok Kumar Attri, an Indian diplomat living in Chicago, addressed the business delegation during a pre-mission briefing. He described GDP growth of 9.3 percent during the last two years, a rate that he claims is accelerating. During the first three decades after the country gained its independence in 1947, the country’s economy grew at a rate of about 3.5 percent – comparable to the current rate of U.S. GDP growth. It grew to 5.7 percent in the 1980s and it averaged 6.0 percent between 1990 and 2005. Attri says the country expects growth topping 10 percent in the coming years.
He makes that claim based largely on a robust work force – 52 percent of the country’s population is below the age of 25. Even as far into the future as 2025, the median age of the population will only be 30 years old. The total workforce, that is, people between the ages of 15 and 59 currently is 696 million people. That figure is expected to grow to 1.02 billion by 2050.
The country has a solid intellectual base on which to build. Literacy is not confined to the middle class; with a literacy rate of 61 percent, a significant portion of the country’s poor can read. And, among the country’s better-off folks, 380 universities and 11,200 colleges produce more than 50,000 computer professionals per year, and more than 360,000 engineers.
Attri identified eight business sectors that he said offer the greatest prospects for propelling the economy: infrastructure, real estate, retail, IT, pharmaceuticals, biotechnology, entertainment and automobiles. Pawlenty would like Minnesota businesses with expertise in those areas to make the most of the opportunity.
Economists, however, worry about the country’s high rate of inflation, the effects of which have been masked in recent years by the extraordinary economic growth. Rising real estate prices have fueled a good part of that growth. The same easy credit that led to the housing bust in the United States is facilitating a lot of real estate deals in India. If the country were to experience a real estate collapse anything like what the United States is experiencing, it could hurt the country’s economy.
The information packet that Minnesota delegates were given by Pawlenty’s administration noted other problems that plague the country, including a robust human trafficking industry. “India has been on the Tier 2 Watch List since 2004 for its failure to show evidence of increasing efforts to address trafficking in persons,” the state’s briefing states.
The Minnesota delegation will get a whirlwind tour of the country, beginning in New Delhi, the country’s capital, with 12.7 million people. The visit will open with sight seeing at the Taj Mahal, four hours away by bus in Agra. Monday and Tuesday morning are devoted to business in New Delhi, with a reception Monday night at the U.S. Embassy hosted by the U.S. Ambassador to India. Tuesday evening, the group travels to Bangalore, the country’s I.T. center. After two days in the city of 5.7 million people, the group travels to Bombay, which took the name Mumbai in 1995. The island city of 16.4 million is features one of the most dense urban populations in the world.
Pawlenty noted that $129.5 million of the state’s $15 billion in exports go to India, making it the state’s 22nd-largest export country. About half the state’s exports to India are computers made by IBM in Rochester. Pawlenty also noted increasing investment in Minnesota by Indian companies. The Essar Group, for example, is investing $1.6 billion in the Iron Range to open a new mining and steel manufacturing plant. .
Tony Lorusso, the executive director of the Minnesota Trade Office, said: “This trip is just a start of what I hope will be a long relationship with India.”
While the business opportunity is motivating most of the people in this trade mission, I am intrigued by the possibility of a half a billion people moving up and out of poverty over the next 35 to 50 years, grace of a robust economy. Can it really happen? What role can Minnesota companies play in developing India’s economy? More business for Minnesota companies could mean a stronger economy for Indians. One retired businessman I talked to who has been to India several times said he is skeptical. “There are so many people living in poverty, I don’t see how they can do it,” he said.
Certainly there are obstacles, but certainly there is hope. Tom Friedman writes in his book, The World is Flat, that India is the future. It’s educational system, population growth and British-based legal system give it the edge over China, another country experiencing amazing economic growth. I have some expectations about what I will see here: congested traffic, overcrowded sidewalks, beautiful new buildings next to shanty-towns. But what I am going to be looking for is the future. If the country cannot grow its middle class, then perhaps when I look all I will see is the past. But I am going to look really hard to see the future.
Thursday, October 18, 2007
Goodbye to an old friend
My friend Ben Haller died on Monday. He was 88.
Ben sold the Northwestern Banker magazine in 1988 to Paul Blackburn, who merged it with his magazine, Commercial West. Both of the magazines were started a century earlier, Northwestern Banker published out of Des Moines, and Commercial West originating out of Minneapolis. Upon the merger, Blackburn renamed the magazine NorthWestern Financial Review.
I was the editor at the time of the merger. I had competed against Haller and his staff the three years prior, and for the next year or so, I edited columns that he continued to contribute. He was an awesome writer. Nobody had banking industry knowledge like Ben Haller. When he wrote about something that happened in the late 1980s, he could compare it to similar events in the 1950s or the 1960s. Whenever some crisis arose that we all thought meant the end of the banking industry as we knew it, Haller would say the exact same thing took place three or four decades earlier.
I respected Haller because he seemed to know everyone in the industry and everyone seemed to know him. He started working at the Northwestern Banker upon his discharge from the U.S. Army in 1945. He eventually was named editor, then bought into the magazine, and then became the magazine’s sole owner in 1981. There aren’t very many people who stick with the same company for 43 years, as Ben did.
Ben Haller was born in 1919 in Omaha, one of 14 children. I wrote a feature on him when the magazines merged and at that time he told me about his military service. He was training with a company of soldiers, but one afternoon he tore ligaments in his knee playing touch football. The injury was so serious that he couldn’t keep up the pace of his Army training, and he was pulled out of his company and placed in the class behind. Years later, he did some digging around to find out whatever happened to some of his old buddies in that original company and he discovered that nearly everyone in the company was killed in the invasion at Normandy.
Haller had always been a devout Catholic, but this realization really got him to thinking about why God had spared his life. Clearly, he thought, God had something important in mind for him to do with his life.
Haller saw combat in World War II himself, flying 19 combat missions. At one point, his plane was shot down over Yugoslavia. The entire crew was presumed dead. Officials informed Haller’s young bride, Peggy, that he had been killed in action. Months later, the crew was discovered, rescued and Haller turned up in a hospital in Italy.
After the war, Ben and Peggy had five kids and eight grandchildren. They were married for 63 years.
I just returned from Ben’s wake; the funeral is tomorrow morning. Peggy asked about my kids. I said they were fine, adding that four kids sure keep my wife and I busy. Peggy said: “They keep you busy but you know it’s worth it. At times like these, it is obviously worth it.” Her kids and grandkids were among the many people remembering Ben at the Sacred Heart Church Parish Center in West Des Moines.
By the time a colleague and I bought the magazine from Paul Blackburn in 1992, Haller had stopped contributing columns, but we stayed in touch. I would see him annually at the Iowa Bankers Association convention in Des Moines every September. The IBA has a club for people who have worked in the banking industry for 50 years or longer. These “50-year bankers” have a luncheon at the convention, and Ben would always attend. He was so close to the group that they made him an honorary member, the only non-banker ever to be welcomed into the ranks of the 50-year banker group.
I got a little worried last month when I went down for the convention and Ben wasn’t at the luncheon. I had talked to Ben last spring. In fact, I invited him to consider contributing columns again. After taking a couple weeks to think about it, he wrote me a letter saying he’d like to do it, that he would get to work on it right away, and that he would send me the first column as soon as he was done with it. I never received a column.
At the wake, it was noted that he lived the last several months of his life in great pain. I never knew, but I should have guessed. He would have submitted a column or two if he were doing okay; he wouldn’t have missed the 50-year banker lunch if he hadn’t been pretty bad off.
I’m going to miss my friend.
Ben sold the Northwestern Banker magazine in 1988 to Paul Blackburn, who merged it with his magazine, Commercial West. Both of the magazines were started a century earlier, Northwestern Banker published out of Des Moines, and Commercial West originating out of Minneapolis. Upon the merger, Blackburn renamed the magazine NorthWestern Financial Review.
I was the editor at the time of the merger. I had competed against Haller and his staff the three years prior, and for the next year or so, I edited columns that he continued to contribute. He was an awesome writer. Nobody had banking industry knowledge like Ben Haller. When he wrote about something that happened in the late 1980s, he could compare it to similar events in the 1950s or the 1960s. Whenever some crisis arose that we all thought meant the end of the banking industry as we knew it, Haller would say the exact same thing took place three or four decades earlier.
I respected Haller because he seemed to know everyone in the industry and everyone seemed to know him. He started working at the Northwestern Banker upon his discharge from the U.S. Army in 1945. He eventually was named editor, then bought into the magazine, and then became the magazine’s sole owner in 1981. There aren’t very many people who stick with the same company for 43 years, as Ben did.
Ben Haller was born in 1919 in Omaha, one of 14 children. I wrote a feature on him when the magazines merged and at that time he told me about his military service. He was training with a company of soldiers, but one afternoon he tore ligaments in his knee playing touch football. The injury was so serious that he couldn’t keep up the pace of his Army training, and he was pulled out of his company and placed in the class behind. Years later, he did some digging around to find out whatever happened to some of his old buddies in that original company and he discovered that nearly everyone in the company was killed in the invasion at Normandy.
Haller had always been a devout Catholic, but this realization really got him to thinking about why God had spared his life. Clearly, he thought, God had something important in mind for him to do with his life.
Haller saw combat in World War II himself, flying 19 combat missions. At one point, his plane was shot down over Yugoslavia. The entire crew was presumed dead. Officials informed Haller’s young bride, Peggy, that he had been killed in action. Months later, the crew was discovered, rescued and Haller turned up in a hospital in Italy.
After the war, Ben and Peggy had five kids and eight grandchildren. They were married for 63 years.
I just returned from Ben’s wake; the funeral is tomorrow morning. Peggy asked about my kids. I said they were fine, adding that four kids sure keep my wife and I busy. Peggy said: “They keep you busy but you know it’s worth it. At times like these, it is obviously worth it.” Her kids and grandkids were among the many people remembering Ben at the Sacred Heart Church Parish Center in West Des Moines.
By the time a colleague and I bought the magazine from Paul Blackburn in 1992, Haller had stopped contributing columns, but we stayed in touch. I would see him annually at the Iowa Bankers Association convention in Des Moines every September. The IBA has a club for people who have worked in the banking industry for 50 years or longer. These “50-year bankers” have a luncheon at the convention, and Ben would always attend. He was so close to the group that they made him an honorary member, the only non-banker ever to be welcomed into the ranks of the 50-year banker group.
I got a little worried last month when I went down for the convention and Ben wasn’t at the luncheon. I had talked to Ben last spring. In fact, I invited him to consider contributing columns again. After taking a couple weeks to think about it, he wrote me a letter saying he’d like to do it, that he would get to work on it right away, and that he would send me the first column as soon as he was done with it. I never received a column.
At the wake, it was noted that he lived the last several months of his life in great pain. I never knew, but I should have guessed. He would have submitted a column or two if he were doing okay; he wouldn’t have missed the 50-year banker lunch if he hadn’t been pretty bad off.
I’m going to miss my friend.
Thursday, October 11, 2007
Beardsley shares history of triumph and tragedy
Long-distance runner Dick Beardsley is a well-known personality on the local speaking circuit and I was privileged to hear him address a business group Monday night in Bloomington. He shared the thrill of being one of the world’s leading marathoners and the agony of struggling with a drug addiction that nearly killed him. The likeable, 6-foot-2 runner invited us to support his foundation, which offers support to chemically-dependent people undergoing treatment.
After washing out of football, Beardsley tried out for his high school’s cross country team, a much better fit for the 135-pound junior. He had never run competitively before, and at the first practice of the season, he found himself walking the last mile of a three-mile run. With practice and persistence, he became a steady runner for his senior year season in 1974.
“There are no short cuts to success,” he said. “You’ve got to believe in yourself. If you are willing to put in the work, the sky is the limit.”
Beardsley graduated from high school never having run in the state high school championship. His college career, at the University of Minnesota-Waseca, did not bring him fame, although he was encouraged by his coach who repeatedly told him he “could be as good as he wanted to be.”
In 1981, he ran Grandma’s marathon in Duluth, Minnesota. He was feeling well prepared and, mysteriously, picked up subliminal messages that he would run the course in two hours and nine minutes. He recently had recorded a time of 2:12 in the London marathon. Amazingly, he won Grandma’s with a time of 2:09:36.
The pinnacle of Beardsley’s career was the Boston marathon, ten months later. Six miles into the race, running shoulder to shoulder with Cuban-born Alberto Salazar, Beardsley told himself he could win the race. He felt terrible those first miles of the race, but a quarter of the way into the marathon, he knew he could compete with Salazar, the world’s top runner at the time.
Beardsley found himself about two blocks behind Salazar with a little over three miles to go. Beardsley sprinted forward to catch up. On the last left turn before the finish line, one of four motorcycles escorting the leaders turned in front of Beardsley, forcing him to take several extra steps. The difference was too much to overcome. Salazar won the race with a time of 2:08:51; Beardsley came in about a second and a half behind at 2:08:52.
Although others said it was clear the motorcycle cost him the race, Beardsley refused to blame anyone for his second-place finish.
Beardsley’s career, which had sky-rocketed him to international fame, took a dive after that. An injury prevented him from competing in the 1984 Olympics. Then, on Nov. 13, 1989, he suffered an accident on a farm that changed the course of his life. The broke several bones in the accident, and nearly lost his leg.
Over several years of treatment, he became addicted to pain-killing drugs. He said by the mid 1990s, he was downing 80 to 90 pills per day. He said he would go from doctor to doctor, seeking prescriptions. When he couldn’t get them, he would forge his own.
Beardsley eventually was caught and locked up in a drug ward in Fargo, N.D. He went through a lengthy, painful, and expensive rehabilitation process.
“Good things can come from bad situations,” Beardsley summarized, noting the launch of his new foundation, which is accessible through www.DickBeardsleyfoundation.org.
“You can live forty days without food, seven days without water and a few minutes without air, but not one moment without hope,” said Beardsley, who would like to bring hope to chemically dependent people in need of treatment.
I got the opportunity to meet and talk with Beardsley before his presentation. He is bright-eyed and personable. He is very likable and he tells a compelling story. I am sure he will succeed in bringing hope to many people who otherwise would not have any.
After washing out of football, Beardsley tried out for his high school’s cross country team, a much better fit for the 135-pound junior. He had never run competitively before, and at the first practice of the season, he found himself walking the last mile of a three-mile run. With practice and persistence, he became a steady runner for his senior year season in 1974.
“There are no short cuts to success,” he said. “You’ve got to believe in yourself. If you are willing to put in the work, the sky is the limit.”
Beardsley graduated from high school never having run in the state high school championship. His college career, at the University of Minnesota-Waseca, did not bring him fame, although he was encouraged by his coach who repeatedly told him he “could be as good as he wanted to be.”
In 1981, he ran Grandma’s marathon in Duluth, Minnesota. He was feeling well prepared and, mysteriously, picked up subliminal messages that he would run the course in two hours and nine minutes. He recently had recorded a time of 2:12 in the London marathon. Amazingly, he won Grandma’s with a time of 2:09:36.
The pinnacle of Beardsley’s career was the Boston marathon, ten months later. Six miles into the race, running shoulder to shoulder with Cuban-born Alberto Salazar, Beardsley told himself he could win the race. He felt terrible those first miles of the race, but a quarter of the way into the marathon, he knew he could compete with Salazar, the world’s top runner at the time.
Beardsley found himself about two blocks behind Salazar with a little over three miles to go. Beardsley sprinted forward to catch up. On the last left turn before the finish line, one of four motorcycles escorting the leaders turned in front of Beardsley, forcing him to take several extra steps. The difference was too much to overcome. Salazar won the race with a time of 2:08:51; Beardsley came in about a second and a half behind at 2:08:52.
Although others said it was clear the motorcycle cost him the race, Beardsley refused to blame anyone for his second-place finish.
Beardsley’s career, which had sky-rocketed him to international fame, took a dive after that. An injury prevented him from competing in the 1984 Olympics. Then, on Nov. 13, 1989, he suffered an accident on a farm that changed the course of his life. The broke several bones in the accident, and nearly lost his leg.
Over several years of treatment, he became addicted to pain-killing drugs. He said by the mid 1990s, he was downing 80 to 90 pills per day. He said he would go from doctor to doctor, seeking prescriptions. When he couldn’t get them, he would forge his own.
Beardsley eventually was caught and locked up in a drug ward in Fargo, N.D. He went through a lengthy, painful, and expensive rehabilitation process.
“Good things can come from bad situations,” Beardsley summarized, noting the launch of his new foundation, which is accessible through www.DickBeardsleyfoundation.org.
“You can live forty days without food, seven days without water and a few minutes without air, but not one moment without hope,” said Beardsley, who would like to bring hope to chemically dependent people in need of treatment.
I got the opportunity to meet and talk with Beardsley before his presentation. He is bright-eyed and personable. He is very likable and he tells a compelling story. I am sure he will succeed in bringing hope to many people who otherwise would not have any.
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