Jobs are growing, but not in all sectors

Few days back it was reported that a sample of elite manufacturing companies has seen a growth in workforce of 3% every year over the past decade. Not going into the details of what companies were considered, how many were considered in the sample, the 3 % growth is a significant one, experts say.

Jobs

 

image taken from: quickbase

But there is fundamental question – what type of jobs were created that saw an increase in % in workforce? Evidence shows that most of these jobs are white-collar’ed jobs.  Information technology techies, CA’s and MBA’s are contributing to the increase in this workforce %. While this is a very good sign, majority of people out in the nation, seeking for jobs does not have these qualifications. They are more likely to fit in the blue-collar, shop-floor jobs. With the automations and re-engineering emerging, the blue collar jobs are shrinking. – The question resurfaces. Is the employment situation in nation is improving?

Manufacturing, textile, construction, tourism are some industries that require more blue collars jobs. It is time to have polices, that boost more growth in these sectors. Also with reference to my previous blog http://thekalyan.com/2014/05/20/why-rupee-should-not-appreciate-against-dollar/ it is vital that we export more that have more scope in manufacturing, textile industries.

Employee performance review : How far a Bell Curve is good?

 

There is this debate of whether the bell curve is a right fit for performance ratings and salary hikes in the current dynamic world of corporates. Bell curve which forces a small set of high performers and a small set of bad performers to each side of the curve is pioneered by GE.

bell-curve-hiring

 

image courtesy: fistfuloftalent

Though it is virtually followed by many large organizations, many of the companies debate that it is not the right way of reviewing the employees’ performance.

Microsoft and Adobe decided last year, to not to use bell-curve as employee assessment tool any more. Indian IT major Infosys too is rethinking whether to use this statistical model as a tool to rate its 150,000-plus employees. It is understood that performance rating is evolving with respect to the current trend. One should consider individual contribution rather than just relative performance. The bell curve creates a conflict as it limits the number of high performers. In fact Infosys replaced the bell curve with the performance curve, where it assumes that most employees are high performers, some are average and very few perform poorly.
There are other players – Internet companies Google, Twitter and LinkedIn that do not use the bell curve.
To conclude, the performance evaluation methods followed by big organizations are slowly changing from traditional bell curve to more employee favored methods.

Tablets and Phablets

It seems the global market for tablets are slowing down because of the large screened smartphone also called as “Phablets”.

While tablets are great for watching films and browsing the internet, large-screened phones are capable of doing pretty much the same, with perhaps more features packed into their smaller shells. For instance, you might be able to Facetime or iMessage your mates with an iPad, for example, but can you send a good old fashioned text message. Or make a call?.

But again when it comes to price, the tablets are cheaper as compared to the similar featured same company phablet…

tablets-phabs

When it comes to sales, Tablets sales was growing at a rate of 50% last year, but it is slowly going down. Resources says that Apple’s ipad is the largest tablet vendor in the first quarter of 2014, but its market share too is slowly fading away. Samsungs and Amazons kindle’s tablet sales are also seeing a noticeable decline. At the same time, Apple and Samsung are capturing the market with their phablets. Apple planning to launch iPhone Air/6 and Samsung already in the game with Galaxy note. Though it’s hard the cannibalization of these products are going good.

Another reason of slow sales is the replacement cycles. For example the Apple’s iPad: Apple hasn’t really come with a significant value for the new iPads every year, – this makes harder to convince consumers  shown a penchant for offering only modest upgrades to its slates to buy the latest model. There’s no need to buy a new tablet every year, as these devices offer a good experience for 18 to 24 months

India’s trade with China

Why Trade with China is Important

Our Trade account deficit with China is around $39 billion. This is because as India has mostly imported electronics and hardware from China. Now that India wants to narrow this deficit, it is ready to provide the software services and expand its presence, as India cannot narrow this gap through traditional export commodities.

INCH

Difficulties:

At the same time India is getting pressure in hardware and electronics, manufacturing sectors to use China products, but India is keen to develop in house and reduce imports to boost jobs. Also China wants to get into mobile telephony, digital TV, audio, but we are not interested in that as India want to develop our domestic industry.

Where can we work together:

Meanwhile India is also keen in looking china’s technical help in Indian Railways infrastructure to improve heavy lagging operations, station development and speeding up the trains.

In summary, India can do trade with China where

  • India can benefit from infrastructure expertise of Chinese and that don’t have domestic industry impacted.
  • Areas where there are no security concerns.

 

 

 

 

 

Technology for future!!

The innovations in emerging technologies help us to solve many challenges. They show a ray of hope for us in the coming years.

Health care sector: 

Challenges:

  • Diabetic patients who are 5 crs. in 2010 to be doubled to 10 crs. by 2013
  • Caner occurrences can be very high
  • By 2030 25% of deaths will be because of heart disease

How technology helps: Many companies around the world are developing networked devices for continuous monitoring of health. These new networked devices are very vital in the treatment of chronic diseases by identifying in early stages. Networked devices will let hospitals monitor patients when they are away, and help provide recommendation if needed.

technology1

 

image courtesy: laimoon

Food sector:

Challenges:

  • Population in India to be 1.5 billion by 2030 against 1.2 now
  • Production is 500 million tonnes in 2030 against 260 million tonnes now

How technology helps: Crop yields decrease because of extreme weather, genetic engineering can produce crops that can tolerate extreme temperatures. IT help in controlling the water and fertilizer use in farms. Also smart technologies based on sensors can cut down waste significantly.

 Energy sector

Though it is possible to produce all our energy from renewable sources, the costs are high. Solar energy will be of great advantage with new technology innovations.  Third and fourth generation nuclear energy technologies are safer and far more environment friendly than the current. Fusion power which is also from atomic reactions, also is great innovation in energy production

Quality of life

Smart technologies will add an edge to managing cities. Sensor networks and analytics will help to provide information about water usage, traffic patterns, accidents, fires and so on.

What’s the problem going in Ukraine?..

After going through the news today, I could not resist to write this blog on Ukraine that is going through rough situation.

Ukraine is one of the countries that has very old heritage and culture flourished in 4500 BC like that of our old Indus civilization. It is in Eastern Europe, which also shares the border of 2300 KM with Russia along with European countries Poland, Hungary, Romania and two more.

What is the Problem:

Ukraine is in deep economic crisis. Ukraine was supposed to sign an years long pending ‘trade’ deal in November 2013 with European Union that have lot of benefits – once signed can get it out from the current economic crisis. But the president Yanukovych did not sign it under the pressure of Russia negating the deal.

Many people who are eagerly waiting for their promising future from European deal – started the protests in Kiev, the capital city after it failed.

Ukraine

A brief History:

In 1932 Stalin from Russia killed up to 10 million people, mostly in East Ukraine and started occupying. Ukraine that was the “bread basket of Europe” had a rich and ancient culture of farmers,  wanted to hold on to their language and their land. As a civilization, Ukraine is a thousand years older than Moscow. Ukrainians had fought for their independence.

Finally Ukraine had got its independence in 1992 when USSR was fallen apart into Russia. But the Russian dominance continues and has grip in east Ukraine.

West Ukraine supports Europe and East Ukraine is still been dominating by Russia.

So what’s happening:

Russia is claiming that it is helping the people of Ukraine by buying €11 billion worth of Ukrainian government bonds and will cut the price of natural gas.  But European Union is claiming that it is a sign of corruption and strategy by Russian President Vladimir Putin’s to have Russian’s grip on Ukraine’s resources.

What are Hawks and Doves in Finance

When ever our RBI Governor mentions that interest rates are increased this time, it is hawkish and vice versa is dovish.

What are they?

Policymakers are labeled as hawks or doves depending on how aggressive they are in dealing with the economic. Like the predatory hawk that grabs any unsuspecting prey, hawkish policymakers go on the offensive to tackle a problem. They keep the inflation in check with high interest rates.

Dovish policymakers, on the other hand, are peace-loving and prefer sweet-talking the enemy into submission. They argue that if you keep rates low, companies will borrow more, build more manufacturing units, produce more goods and services. Thus, supply will eventually catch up to demand, reducing inflation.

hawks-vs-doves

 

image courtesy: http://www.macrobusiness.com.au

Why are they important?

If the RBI is hawkish — believes that inflation is a worry. What does it do? It promptly increases the repo rate (pls refer to my previous article on repo rate http://thekalyan.com/2013/12/16/rbi-what-is-repo-rate/), the rate at which banks borrow money from the RBI. Banks in turn try recovering this increase in cost from their customers in the form of higher loan rates. This works towards reducing people’s spending — people take fewer loans and buy fewer homes, cars and other things. As consumption falls, it helps control prices. So, if you can’t produce more goods quickly, the next best thing to do is to make people buy fewer goods.

Why should I care?

You’ve been planning to buy a home for some time now and intend taking a bank loan for it. But, you might just have to do a rethink if the RBI is in a hawkish mood. For if you take on that loan now, your EMIs (equated monthly installments) may soon go up as the RBI hikes interest rates. But you are benefited if you have more number of bank deposits. As interest rates climb, you get a better return on your deposits. Also, if the government is in hawkish mood, there can be higher taxes and lower subsidies.

well, it is always not possible to have the government in dovish mood, both have the positives and negatives.

For more pls check the The Business Line, 4th Feb 2014

IT industry requirement ‘for’ India

When one thinks of IT, they can get only the picture of IT industries, serving US, UK, Australia, Singapore etc. But ironically, there is a lot that has to be done in our country with respect to Information Technology. As per the NASSCOM president, R Chandrashekar, The IT industry needs to reach out to the domestic market and there is a great requirement in these pockets of our nation.

it

image courtesy: isamit.in

“We need to reach out to the people in domestic market and achieve the transformation which the nation requires. Only through technologies will we get services which are accessible, convenient and affordable,” the NASSCOM chief said here today in his address at the National e-Governance conference.

Chandrashekar said there are good amount of opportunities that can be employed with new technologies like social media and cloud computing.

“We have to admit that the industry has also not looked at the domestic market as intensely and seriously as it should have,” he said.

Government can do lot better in these markets that are a good chance for infrastructure improvement as well as for job creation.  Govt. can also create an integrated platform to engage social issues like women’s safety, construction of roads and social audit.

It could be done with minimum expense and will have a big impact on the e-governance programme, and also it would be the first of its kind in the world.

There is a need to promote partnerships with industry and the government to reform the administrative processes in each of the ministries and states.

Reasons for today’s downfall of Sensex

 

Fall of Rupee Value: The rupee falling down fast to 63 levels against the dollar and it can sink to 65 levels(1 dollor= 65 Rs.), as experts forecast. The rupee hit 62.90 in early trade on Monday, its lowest level since November 22. Low value of Rupee means the FII’s (Foreign Institutional Investor, you can also check one of my previous blog http://thekalyan.com/2014/01/10/fii-and-its-role-in-indian-markets/ ) start selling the rupee and start investing the dollors in some other markets. This creates the tension of loosing investments in the SENSEX, causing the markets to loose the shares, thus leading the market value to fall down.

marketcrash

 

Image courtesy: firstpost.in

Quantitative Easing: The US central bank is currently buying assets worth $85 billion per month from the marketplace which has helped ease global liquidity conditions and India has been a beneficiary with respect to continuous inflows of capital. Fed officials are seen cutting their bond-buying programme by another $10 billion.

As per the latest data, December jobless rate in the US fell to 6.7% from 7% month on month. Also, in the third quarter, the US economy grew at about 4%. All these leads in reduction in buying these assets. Therefore, any reduction in the pace of easing by the Federal Reserve is likely to affect the capital inflow and also the value of the Indian rupee.

Rise in Repo rate: As WPI (wholesale price index is at higher rate than the retail inflation, RBI may see a rise in repo rate (http://thekalyan.com/2013/12/16/rbi-what-is-repo-rate/)

Elections 2014: Last year, the stock market was sort of confident that a BJP-led government would make it to a stable govt.  but AAP will have an impact in having the BJP to have a stable govt. Latest surveys see the BJP managing a little over 200 seats, but then that won’t be enough to form a strong and stable government, which is a key factor for good markets. An instable govt., will have a less strength in the decisions because of external support by other parties, making the markets rely on the govt. standpoint.

How MBA is valuable..!!

 

Jump on the corporate ladder
: If one is working in a industry for few years and have CEO dreams or he / she is not happy with the salary he/she is getting, an MBA may just boost the need. MBA can help move from junior to middle and from middle to senior management. With a good MBA degree your senior manager designation can be turned into a GM profile in less than two years which otherwise may take five to eight years. 

An MBA also helps in commanding a higher starting salary as compared to a non-MBA with same experience. 

Not having an MBA can prove to be an obstacle in some organizations.

  MBA

Image courtesy: einsedu.com

Change in career path: 
Marketing, finance, HR give a perspective to understand the business in various directions. 
If one has a year’s experience in sales and do not like it much, he/she can do an MBA, specialise in HR and get a job in that field. During MBA, one can also intelligently plan their internships to show focus on a new industry that they want to switch to.

Opportunities and increased earning: 
Most of the good jobs advertised want MBA listed as an essential qualification to apply. People who hold an MBA degree find different types of employment opportunities, both domestically and internationally. 

It is estimated that 70 per cent of the senior managers or board directors worldwide are MBAs. So one gets higher salaries as MBA. It is relevant to know that this growth mostly comes with longer work hours.

To start on your own: 
At the core, MBA teaches skills to manage different parts of a business and exposes a person to real world business situations using case studies and industry visits. So it is a good training ground for up coming managers and entrepreneurs. If one want to become an entrepreneur, he/she can get into an MBA programme and learn the basics of sales, marketing, business planning, finance and get started as an entrepreneur. An MBA is not essential to become an entrepreneur but it surely helps. 
May be college dropouts like Bill Gates, Steve Jobs and Mark Zuckerberg are famous, but there are  quite a large number of entrepreneurs, who get on that path after finishing their degree.

Knowledge: Finally MBA is about acquiring knowledge. 
Ite is a great way to acquire diversified knowledge. When one puts the knowledge to work and share with others, their growth becomes faster. If one goes into an MBA with an open mind, he/she will come out a better person.

To top it all, an MBA is ticket to a fast growth career and success if you are willing to work for it.

For more info, pls check the Times of India 21st Jan 2014