| About a year and a half ago, I listened to a speech by a guy named Dinesh D’Souza. He had just written a book called “What’s so great about America.” The title is a statement, not a question. As he was describing the plight of people who struggle with real poverty all over the globe, he quipped that while we worry about cars and big houses, many people in Africa, Asia and parts of South America would “be happy to have regular bowel movements.” That line got a little chuckle but I realize now that he wasn’t kidding. In India, I saw many skinny, near-naked people living in squalor. Some bathed themselves in muddy rainwater that collected in the potholes. Collecting trash, others picked through rubble that lined the streets. In the countryside, I saw people thrashing wheat by hand, or digging in the dirt without tools. Everywhere I went with my travel group, we saw beggars. The water they drink is not clean; the food they eat is not substantial nor particularly nutritious; their living conditions are not safe. Yes, I can understand, their bowels are probably not functioning to their potential. If they were, it would be a big deal. D’Souza wasn’t kidding. This is Thanksgiving Day and I am not creative enough to think of anything else to do with a blog post today than to give thanks. Of course I am thankful for the really big things, like a great wife and kids, a home, work that I enjoy, faith and great friends, but lately I am finding particular joy in giving thanks for the little things. For example, I am thankful for matching socks, and paper for writing down ideas, pens that work, pencils that are sharp. I am thankful for shoes and gloves and a warm hat. I am thankful for all those free newspapers that are available throughout the city, not that they offer particularly good reading but they tell me I am in a world full of people with all kinds of different ideas. I am glad everyone is not the same. (Oops, I think that is a big thing, not a little thing.) I am grateful for the little restaurant where I buy my lunch three days out of five. I am grateful for plumbing, let alone indoor plumbing. I am grateful for soap and a dependable razor. I am grateful for toothpaste that tastes good and dental floss. I am grateful for Kleenex and paper towels, sugar and chocolate chips, banana bread and spaghetti. I am grateful that someone figured out electrical outlets should be standardized, and I am grateful that someone figured out all the rules for driving on the road, and I am grateful that the parking meters in downtown Minneapolis take a rest on certain holidays, including Thanksgiving. I am grateful for my eyesight and my ears so I can drink up all the interesting things that are going on around me. I am grateful for the squirrels and all the little animals that scurry through my back yard, giving me entertainment. I am grateful for the people who collect our trash and deliver our mail and provide police and fire protection. I am grateful for the operators who staff the 411 telephone service and the people who put together the phone book. I am grateful for the street cleaners and the cable guy and the meter readers and all the other people who do their jobs to keep the city operating. But, oops, there I go again. These are big things. None of these things are little. Maybe there are no little things. Good health, including properly functioning bowels, is a big thing. On this Thanksgiving, in 2007, I am particularly thankful for those people in India. I saw a lot of poor people when I was there but I didn’t see people who had given up. They were persevering. They were making the most of what they have. It seemed to me that they were holding onto hope. They must have seen potential that most of us miss. Thinking about all the things for which I can be grateful is helping some of that potential to come into view for me. |
Thursday, November 22, 2007
Thanksgiving
Wednesday, November 14, 2007
The blessing of adoption
November is National Adoption Awareness Month. I wrote a memoir about adoption, something Susan and I experienced four times. This is an excerpt from Emerging Son (www.emergingson.com) where I reflect on fatherhood, the result of our adoption efforts.
Why do we have children anyway? It’s a question that seems particularly relevant to adoptive parents. Unlike biological parents, we can’t claim any child was unexpected. We took very deliberate, complicated steps to assure our place as parents. Why?
I was responding to a deep inner yearning – a yearning that almost seems in conflict with itself as I was seeking to reclaim my childhood and at the same time seeking my adulthood. I wanted that family I grew up with. Childhood was such a positive, loving, and happy time for me, I wanted it again. But I also wanted to grow up. Like any living creature, I wanted to become what I am – that is, an adult. And somehow I grew to believe that a typical man approaching 40 should know the love of a wife and kids, the security of home, and meaningful work. As a kid watching my dad, I never realized what a bid deal it was to have all this; now I know.
The same way a baby emerges from the familiar comfort of the womb into the unknown, harsh but opportunity-filled world, a man exchanges a carefree, self-centered existence for the uncertain but potentially joyous responsibility of fatherhood. I am grateful for the time I had as a single man, and for the time I had with Susan before we had children, but I am so grateful for this period. Parenthood demands love and trust and faith like no other period in life I have known. Fatherhood is helping me to replace my natural-born selfishness with selflessness. Maturity is figuring out that the whole world doesn’t revolve around me, and fatherhood is helping me to see that, and more important, to embrace that.
I found my home in fatherhood. Now my job, which could take decades, is to help my kids find their home.
I want the same thing for my children as I want for myself: I want them to work all their lives to replace their natural human selfishness with earnest selflessness.
Love that can change the world comes from a selfless heart. Susan and I will give our kids opportunity. They will go to good schools. We will show them many wonderful places in the United States and the world. And I will support them, no matter what their vocation. Their pursuit of any demanding, honest work will make me proud. But people don’t change the world by what they do, they change the world by who they are. And I pray my children grow to become the selfless heroes that the world so desperately needs.
Why do we have children anyway? It’s a question that seems particularly relevant to adoptive parents. Unlike biological parents, we can’t claim any child was unexpected. We took very deliberate, complicated steps to assure our place as parents. Why?
I was responding to a deep inner yearning – a yearning that almost seems in conflict with itself as I was seeking to reclaim my childhood and at the same time seeking my adulthood. I wanted that family I grew up with. Childhood was such a positive, loving, and happy time for me, I wanted it again. But I also wanted to grow up. Like any living creature, I wanted to become what I am – that is, an adult. And somehow I grew to believe that a typical man approaching 40 should know the love of a wife and kids, the security of home, and meaningful work. As a kid watching my dad, I never realized what a bid deal it was to have all this; now I know.
The same way a baby emerges from the familiar comfort of the womb into the unknown, harsh but opportunity-filled world, a man exchanges a carefree, self-centered existence for the uncertain but potentially joyous responsibility of fatherhood. I am grateful for the time I had as a single man, and for the time I had with Susan before we had children, but I am so grateful for this period. Parenthood demands love and trust and faith like no other period in life I have known. Fatherhood is helping me to replace my natural-born selfishness with selflessness. Maturity is figuring out that the whole world doesn’t revolve around me, and fatherhood is helping me to see that, and more important, to embrace that.
I found my home in fatherhood. Now my job, which could take decades, is to help my kids find their home.
I want the same thing for my children as I want for myself: I want them to work all their lives to replace their natural human selfishness with earnest selflessness.
Love that can change the world comes from a selfless heart. Susan and I will give our kids opportunity. They will go to good schools. We will show them many wonderful places in the United States and the world. And I will support them, no matter what their vocation. Their pursuit of any demanding, honest work will make me proud. But people don’t change the world by what they do, they change the world by who they are. And I pray my children grow to become the selfless heroes that the world so desperately needs.
Tuesday, October 30, 2007
Global business: easier than ever but still challenging
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.”
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.”
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.
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