Make in India

India is an outlier in terms of economic development. Traditional economic theory suggests that in the beginning all economies are dominated by agriculture. As the economy develops, manufacturing becomes the predominant sector. Further up in the stage of development comes services. The linear development is the model for all countries, including China. The one exception is India.

India has never been a manufacturing economy and has leapfrogged to becoming a service economy. A full 55% of India's economy is the service sector. This is all fine, but for one problem. Where are the jobs for the teeming millions of Indians going to come from ? You need a big manufacturing base to absorb the youth coming into the job market every year. India has to create 12 m new jobs every year. Hence the Make in India need.

India actually has a huge competitive advantage now - it is actually cheaper as a manufacturing destination than China. China has become expensive, but retains its predominant position simply because there is no real alternative at that scale. Countries like Vietnam or Bangladesh are small. The only big competitor is India. 

Achieving real manufacturing scale and , thereby jobs, will need concerted action over 20 years. Mere slogans will, of course, achieve nothing. This has to be backed up by proper policy action.

What is needed to be done ?  Quite a lot actually, but let us begin with three things that do not need to be done

- Tax incentives to manufacturing. This is the soft option, but must not be done. Neither is it necessary nor is it equitable to do so.

- Lowering interest rates. All the pressure on the RBI governor is self serving bullshit. No serious company makes investment decisions based on short term interest rate

- Diluting labour laws. Actually this is hardly needed. Labour laws, other than when factories are closed, are actually sensible, fair and progressive in India today. It is better than, say, in France. We should not dilute labour laws and allow the Rambo manufacturing that  happened in China.

The key elements that need to be tackled are

- Amending the Land Acquisition Act. The last Act completely swung the other way and as it stands now it is almost impossible to acquire land to set up a factory. The government, realising this, is acting through an ordinance

- Infrastructure - Ports, Roads, Railways and Power. This will take time, but must be done largely by the government, although partnership with the private sector will also be key.

- Single window clearance from the government. All clearances within 3 months for setting up a factory.  Doesn't matter if a mistake or two is made.

- Remove all caps on foreign investment in manufacturing. Who cares where the money is coming from as long as jobs are created. 

- Rein in Ramamritham. If possible chop him into bits and throw him into the sea. You just have to drive through Sriperumbudur, on the outskirts of Madras to see the havoc Income Tax Ramamritham has caused. Shut factories - Nokia, Foxconn ...... Any industrialist who now starts a factory without a cast iron defence against Ramamritham is an idiot.

- Enforce contacts and the rule of law speedily. Perhaps even a separate judicial process for business matters. One of the sad facts in India is that despite the rule of law, contracts, especially with the government, are practically unenforceable.

- Make India, one India. Each state competes with others to create bottlenecks and roadblocks, because of the preponderance of local Ramamrithams. National laws, such as the GST are an imperative. The Centre cannot dictate this, but should simply go ahead with the willing states and leave the outliers either to join the bandwagon or suffer.

- Stay the course. Create the framework and then don't change it for a decade at least. Let a thousand flowers bloom !

None of this is even politically contentious in a major way. Start and build  momentum. Investments will come. Money will be found. A juggernaut, once started, cannot be stopped - there is already the example of the IT industry.

Motor ahead, India.

The Pathetic and Paltry Time Magazine Assignment Rate & Rights Grabs

What's good for the goose is clearly not good for the gander. "Purchase" is not "license." According to Time's own website (here) " We license Time Inc.�s peerless content, brands and products to partners in new businesses and emerging markets."

DEFINITION: Peerless
adjective 1. having no equal; matchless; unrivaled. Synonyms: unmatched, unequaled; unique, unsurpassed. * source: Peerless, at Dictionary.com

Yet, that "peerless content" which Time wants contributors to produce is not something that they are purchasing like a computer or plane ticket. The software they pay a fee to license from Microsoft and Adobe, while seemingly purchased, is not, it's licensed. They may have "purchased" a physical CD of the software, but they do not have ownership of the software to use across multiple platforms unless they obtain a broader license to the work, and pay an appropriate additional fee.

As reported in PDN Pulse (here), Karen Myers, who is Time's UK�s Director of Corporate Communications, said �...Contributors need to bear in mind that commercial realities dictate that we will be using the content that we purchase in many different ways..." yet Time's website Terms & Conditions (here) make it abundantly clear (regarding the intellectual property on their website) they "own, solely and exclusively, all rights, title and interest in and to the Web Site, all the content (including, for example, audio, photographs, illustrations, graphics, other visuals, video, copy, text, software, titles, Shockwave files, etc.)."

Time UK has been, and it will remain, licensing content from contributors. They will not be "purchasing" ownership of it any more than I can take that Norman Rockwell I want to buy and (once I do) make posters and lithographs off of it. Yet that is what Time UK (and as has been suggested by others, this is a trial balloon for US contracts) wants to do.

This smacks of what occurred in the late 1990's, when Time unceremoniously foisted upon contractors, contributors, and freelancers, a new egregious contract. Many of the seasoned team of photographers, stood their ground and refused to sign, only to be replaced by those who looked up to them as standard bearers - "peerless" photographers, to coin Time's characterization. The "new team" stepped in to fill the void, crumbling what ground those photographers were standing on. You can, no doubt, see those who were undercut by the newcomers sitting back and saying "what goes around comes around..." and not missing a wink of sleep as the downward spiral continues.

(Continued after the Jump)

How Far Down Is That Spiral Going?

In 1980, the Time Magazine contract indicated a rate of $350, and in about 1990 it was $450. In 2000 and on through to about 2011, it's $500. It's about $550 in 2014.

In 1980, $350 was worth, well, let's set that as the baseline, and say $350 is worth $350.

Would the 1980 photographers taken an assignment for the "Peerless" Time Magazine for $191? No, they would not.

Here's how Time Inc's (NYSE: TIME) assignment rates have worked, throughout the years.

First is the middle line, which tracks the rate as paid. The top line is the rate had it kept up with inflation alone. The bottom line is the buying power of that rate, over time.

How did we arrive at these numbers? The US Department of Labor has a calculator (here) that allows you to compare buying power, over time. It's a fact that essentially everything increases in cost over time. That loaf of bread in 1980 was about $0.50 and now it's $1.50. Gas? Of course - more expensive too. As such, your ability to buy something has been reduced, over time, unless you get a "cost of living adjustment" in your income stream.

If Time were paying an assignment rate of $1,000.00 it would have just kept up with inflation relative to their previous $350 assignment rate from 1980.

Has their per-page ad rate gone up? Yes.

Have their employees received cost-of-living salary increases? Yes.

Where is the equity in paying those that produce that peerless content that brings in readers? Absent.

Know that if you're a photographer now that accepted the $500 back 10-15 years or so ago (when it should have been about $750), you were undermining the photographers who tried to take a stand for better pay then. Now, when you try to take a stand, make no mistake about it, there will be photographers who will fill the void, and you can join the ranks of past Time Magazine contributors saying "what goes around, comes around - trust me, I have experienced the financial pain that proves it."

You either stand together, or fail separately. Your choice.

----------------
Related:
The REAL 'New Frugality'-Time Style, 7/25/09

---

Please post your comments by clicking the link below. If you've got questions, please pose them in our Photo Business Forum Flickr Group Discussion Threads.

The bonanza / disaster of 2014

As the year draws to a close it is customary to review the year gone by. What do you think was the most significant event of 2014 ? Some would say Ukraine. A few might vote for Ebola. Still others might say ISIS. What about the missing Malaysian Airlines plane ? Others might say the Indian elections. Many in my part of the world might even say Lingaa :)

In my opinion however, the most significant happening of 2014 was the steep fall in the price of oil. In June 2014, Brent crude stood at $110 a barrel. Today it is at $ 60. This has profound ramifications on both the economics and politics of the world.

Because of the world's dependence on oil as the primary source of energy, there has been a massive transfer of wealth over the last decade or two from the poor to the rich. Most of the world's nations are oil importers. A few, blessed by sheer geographical luck are oil exporters. Wealth has gushed from the former to the latter for years now.

With the step decline in the price of oil, the tide has turned. The oil exporters are facing economic disaster. The hardest hit is Russia - a kleptocracy that has frittered away the oil boom years, now suffering from the twin effects of falling oil prices and the sanctions over Ukraine.  The rouble has crashed and they have been caught pissing in to the wind  (apologies to this blogger !). Next in line is Venezuela, another country that wasted the good years. Iran is yet another sufferer. Even mighty Saudi Arabia is vulnerable. The following chart shows the lot that is in trouble.

The rest of the world is a winner. Inflation, world over, has come down. Global GDP may raise by 0.5% or so, purely on account of oil price. The US and China are the biggest beneficiaries. In fact the booming shale gas production in the US, coupled with weak economic growth globally has caused the fall in price of oil. As an aside, the tree huggers in the UK and elsewhere in Europe who have been blocking every move to frack in Europe must be forced to pay $110 a barrel for oil and not benefit from the effect of the shale gas revolution in the US.

Poor countries across the world have benefited from lower oil prices and have been able to curb inflation. India is the biggest beneficiary of them all. Inflation in India has steeply fallen solely on account of oil prices. Petroleum subsidy has fallen so much that the government has raised taxes on petroleum products and at the same time decontrolled diesel prices without a squeak from the public. The fiscal situation would have been a far greater disaster but for the unexpected bonanza. 

Oil prices will probably recover, but are unlikely to go back to three figures in the near term. That might have larger consequences. Inflation can be held in check. Funding to the Islamic jihadists, which has largely flown from oil money is likely to be constrained. Russia is unlikely to repeat its misadventures as in Ukraine. The oil producers such as Venezuela and Nigeria, who are most affected will be forced to adopt more sensible economic policies which can only benefit them in the long run. All in all, we can ring in the new year with a feel good factor.

PS : This blogger owes an apology for going AWOL for 2 months and is deeply thankful to his readers who have all been very kind and encouraged him to "come back"

Dumb Hookers and Photographers

How much money are you losing when you're not paid when the services are rendered, or even on time?

There's an old saying:

"even the dumbest hooker knows they get paid up-front."

Setting aside the disparagement some of the purveyors of the oldest profession in the world, the sentiment of being paid up-front is obviously a time-honed position.

Consider this - A common credit card has a 17% interest rate on charges.

Why Interest?

Q: Why do people charge an interest rate? A: It's "the cost of money." The concept is - if a financial institution loans you money to buy a house, they're not able to use that same money to invest in stocks or other investments that will, over time, increase in value. Therefore, when a bank loans you $300,000 with 30 years to pay it back at 5% interest, and with you paying a monthly mortgage of $1,654, at the end of 30 years, they will have earned $229,910 in interest and you will have paid a total of $595,639 for that house.

If you were to buy $10,000 in photo equipment, and not pay it off in a year, you would have to pay $1,838.92 in interest if the interest was "compounded monthly" as compared to $1,852.58 if the interest was "compounded daily." As such, the difference between "compounded monthly" and "compounded daily" is $13.66. How does that work? What happens is that "compounded daily" means that on day 1 you owe $10,000.00. At the end of day 1, approximately $4.66 in interest is accrued, and so on day 2 you owe $10,004.66. Compounded monthly, you wouldn't owe any interest until the end of the month, but then you would owe $141.67 in interest.

(Continued after the Jump)

Now, consider the value of your own money - that which you earned. If you earned $5,000 for an assignment, and you get paid that money up front, you could, in theory, immediately invest it in one of the safer investments - bonds - with a 4% return. So, at the end of the year, it would have $5,204 in value. Thus, it should be painfully obvious that if that client waited a year to pay you, you would have lost the ability to make that investment, thus, losing $204. Simple math tells you that if they waited 6 months, you'd have lost $102, and in 90 days, you'd have lost $51.

So, when that client tells you "we pay in 90 days" what they're saying to you is "I know your bill is $5,000, but we're going to pay you in 90 days, and you'll have lost $51 in earning value during that time, so you'll only have earned $4,949.00."

Consider that most clients and vendors should be on a 30 day pay cycle, that same $5,000 has a per-month value of $17.00. That's like a client disavowing a parking garage expense or a two-person fast food meal, "just because�"

Here's the rub - when you incur a $5,000 expense your credit card company wants it paid back in 30 days, or you pay interest. $70.83 at 17%. Where's your $70.83 when a client doesn't pay you in 30 days?

So, on that $1,000 assignment, where's your $14.17 when that client doesn't pay in 30 days?

It compounds. If you're a photographer that does three $500 a week assignments, that's a gross revenue of $78,000. That's 156 assignments a year. The difference between getting paid in 30 days versus in 60 days is, at $7.08 an assignment, an $1,104.48 loss in the power of your money, or doing just over two of those assignments for free.

There are many "standard" payment cycles, all built into your business model and what works for you.

Most wedding photographers take a deposit when the contract is signed and the full amount a week before the wedding, or upon delivery of the proofs (I'd recommend a week before the wedding.)

Many commercial photographers expect a deposit when the contract is signed (so they can start booking air/hotels and incurring other expenses on the clients' behalf) and the balance due on receipt of final images (but before first usage of said images).

Other photographers are on a 14-day, 21-day, or 30-day schedule. Some require clients to pay on the spot with credit cards.

In the end, it's important to recognize the value of your money, and get it as soon as possible.

---

Please post your comments by clicking the link below. If you've got questions, please pose them in our Photo Business Forum Flickr Group Discussion Threads.

Et tu Your Majesty ?

One of the pleasures of life is to start the day with a strong cup of coffee in one hand and The Hindu on the other. But the dangers of such a practice was brought out today - scalding by spilling the hot stuff on a sensitive part of your anatomy, the coffee turning utterly bitter in the mouth, etc etc. For right in the front page was the news that caused me to convulse uncontrollably. Her Majesty the Queen , had sent her first tweet !

This blogger's vehement opposition to that abominable medium and  contempt for "twits" is well know. He is well ware that 99.99999% of the world are in the opposite camp. But he consoled himself that a few dignified men and women of great stature, like Her Majesty (and himself !) had better taste and sense. Now he is somewhat perturbed that he may be the only dignified man standing.

Her Majesty's first tweet is a perfect example of the inanity of Twitter. She tweeted - "It is a pleasure to open the Information Age exhibition today at the @ScienceMuseum and I hope people will enjoy visiting. Elizabeth R." If there was a more useless piece of information, I am yet to see it. But to be reduced to having to sign Elizabeth Regina (I am sure you didn't know her second name). ...... What has the world come to.

In order to update himself on the useless stuff that so called celebrities tweet, this blogger spent a frustrating hour reading them. Here's a sample of recent tweets made by these worthies

Barack Obama - "Will you weigh in on #Obamacare?"  - he has some hope !

Narendra Modi - "Lot of things we can get to know by talking. Not only information but points of view" - What fantastic wisdom.

Shashi Tharoor - "I am donating them a biogas plant of 1tonne per day capacity" - So what.

Justin Bieber -  "Life is about the journey :)"  - Stunning discovery.

Shahrukh Khan - " I think Life, Movies & other such essentials, do start after 40!"  - OK, you old man.

Neil degrasse Tyson (a leading astrophyicist) : "I wonder if social media atheists ever use "OMG". If so, they probably intended to type "OYG"  -  What a scientific insight

Sachin Tendulkar  - "Wash your hands before every meal.... Spread the word on" - Ok mommy

Paris Hilton - "There's no place like home"  - OK couldn't resist peeking into the tweets of the wisest lady in the world.

David Cameron - "I'm angry at the sudden presentation of a €2bn bill to the UK by the EU. It's an appalling way to behave and I won't be paying it on Dec 1st" - Have you heard a better rendering of the loudly squealing schoolboy ?

Angela Merkel - "Guten Morgen liebe BürgerInnen und einen schönen Sonntag!  (Good morning dear citizens and have a nice Sunday) "  Doesn't she have anything better to do on a Sunday morning ??

and, of course, our own blog king and  commenter extraordinare 

Congoboy - "I swear, it peed on me."   -  OK; that one was below the belt, but I can't resist needling Congoboy. Its an actual tweet by him though !

What a colossal waste. Of all the useless, inane , pointless, drivel in the world, 99% can be found on this monstrosity called Twitter.

So having tweeted her first tweet, what is the Queen going to follow it with. Here are a few helpful suggestions

- Pip Pip

- Oh dear, my foot aches

- Coochie Coo George

- Oh God, do I have to get up and go to another boring function ?

- Toodle oo

PS : This post is at the request of my dear friend, fellow blogger and commenter, "Nancy" who made the request commenting on the previous post !

Don't ask for a raise; ask for a drop !

Microsoft's CEO, Satya Nadella got himself into a pickle yesterday. He was asked at a women's forum what women should do to get paid more. He replied "It’s not really about asking for the raise, but knowing and having faith that the system will give you the right raises as you go along,” he said, adding that such patience was “good karma”.

In this politically correct world, he was, of course, asking for trouble. He has been pilloried and the only sensible PR thing to do is to grovel and apologise. Women are paid less than men, in some places (although I challenge anybody to prove this in the IT industry. I know this industry intimately. No sensible company pays women differently from men for the same job. There are less than 50% women in the IT industry, and a lot less in senior echelons,  but that is due to a whole host of other reasons, not unequal pay).

I have no desire to incur the wrath of the politically correct. So I am not going to debate whether Nadella should grovel or not. Instead, if you eliminate the gender factor from the equation, I think he was making a fair point. In fact, I would go a step farther to say that in some instances, we should be asking for a pay drop; not a pay rise !

Labour , and skills, are a commodity, like any other. Price depends on demand and supply. Every commodity's prices go up and down (even gold). Except an individual's salary, which goes only up. Unfortunately , we have been conditioned to expect a salary hike every year and that the more it is the better. Actually, the worst thing that can happen to us is that we get a fat salary hike each year. For, if we keep increasing our "price", a time will soon come when we have become outpriced. At that point, we are sure to be sacked. If collectively everybody in our unit does this, the unit will be shut down and the jobs moved somewhere where the wages are lower (probably overseas). If one is an outlier, then you can be sure that the person would be fired under some pretext or the other and we will be replaced by somebody cheaper. This is the brutal fact of today's workplace.

The trick is therefore to price yourself, just a shade below market. That way, the company cannot afford to sack you. If that means taking a salary drop, then so be it. In fact, as you age beyond 45, I submit, you should be looking to a salary drop every year. There is a far greater age discrimination in the job market than gender discrimination (try getting a new job when you are 50).  The only way you can continue to age and survive without being fired, is to keep your "price" competitive, allowing for the fact that there is a perceived efficiency bias in favour of the young. A small discount to the market is the right place to be in. Unless you are in France, or unless you are in a profession where you cannot be sacked (as one commenter to this blog is).

I know this is heresy and I am going to probably be pilloried. But I would rather hold a lower paying job than no job at all.

Thankfully, I am no Nadella. So I can afford to be politically incorrect !!

Spare a thought for Nauru

Nauru is a strange country. It's a trivia nut's delight. It is the only country in the world without an official capital. It is the second smallest state in terms of population after the Vatican. Its 10,000 odd people are the fattest in the world. It is an island nation in the middle of the Pacific Ocean, thousands of miles from anywhere. But this post is not to extoll the Robinson Crusoeish place as some sort of a paradise - it is instead about the strangeness of its economy.

Nauru is , to put it mildly, plain broke. Bankrupt with a capital B. But in the 1970s and 1980s it was the richest country in the world in terms of per capita income ! How did the richest country in the world go bust in 30 years. It is a strange story indeed.

Nauru's prosperity came from the most unlikeliest of sources - bird poo.  Over millions of years, seabirds crapped all over the island. The poo accumulated and accumulated and became guam. When Nauru became independant in 1968, it found itself sitting on a valuable mineral - phosphate - that was easily extractable and a key ingredient for making phosphatic fertilisers.

Nauru became a major phosphate exporter. India was one of its chief markets - a joint venture company was even set up in Orissa, called Paradeep Phosphates between the governments of India and Nauru. Nauru made a killing with phosphate exports. And climbed to become the richest country in the world . Its 10,000 odd people lived a life of luxury - no taxes, no need to work hard. In the process they got fat. Very fat. Literally.

But Nauru is a small island. In 20 years or so, the phosphate deposits ran out. Now the islanders were left with nothing.

What they did next to raise income is a unique story that beggars belief. In the 1990s they tried to become an offshore finance centre. They, of course, were incapabale of managing this sensibly. Criminals made a beeline for the place and it became a major money laundering centre. The US promptly banned it and the dreams of becoming a financial haven quickly turned to dust. They tried selling citizenship for a fee, but once criminals found that they couldn't operate there, very few came.

Next it tried to play the diplomatic game to raise some money. In 2002, it  kicked Taiwan diplomatically and recognised the the mainland - The People's Republic. A grateful China gave it $130 million. In 2005, it kicked The People's Republic out and re recognised Taiwan. It is unclear how much money it made from it.  But you can do this sort of a thing only once ! It however remains ready to recognise any country in need of recognition. It did so with Abkhazia, a breakaway region of Georgia and a grateful Russia promptly gave it $ 50m.

In the last few years it has turned to yet another strange source of income. It takes in illegal immigrants - boat people landing up in Australia - in return for money. So some of the poor Vietnamese, Indonesians and Sri Lankans, find themselves in camps in Nauru instead of their presumed heaven of Australia. Australia pays Nauru for this "service".

The government of Nauru has been historically incompetent and useless. In that, of course, it is not alone. But it is now bankrupt and virtually shut down. It's bank accounts in Australia have been frozen. It's few assets , again in Australia, have been repossessed. It has defaulted on its bonds. Back home, it is not clear if the government can even function anymore. Australia has to save it.

The ordinary Nauruans deserve some sympathy. They have the highest incidence of Type 2 diabetes in the world, affecting 40% of the population Most people are unemployed.  If Australia does not send aid, they will be virtually in penury. The sad problem is that they are a speck in the ocean. Who cares ?

Buy Property - Gangnam Style

Remember Psy and the megahit video Gangnam style ?  Yeah, I know, two years is the equivalent of a full Jurassic Age in pop music circles, but still ..... While you were trying to prance about like a horse, did you wonder what Gangnam style really meant ??

Gangnam is actually a suburb in Seoul, inhabited by the mighty and wealthy. The song was a parody of the lifestyles of those mighty men and women. Today Gangnam district came back into the news, with a property deal that raised my eyebrows so much that they vanished into my hairline (such as it is !). A 79,000 sq metre plot was up for sale. Thirteen bidders emerged, including two of Korea's biggest corporations , Hyundai and Samsung. Hyundai won it ; apparently they want to build their corporate headquarters there. The price tag ? A cool $ 10 bn. If you do the math , that is $126,000 per sq mtr. Or if you are an Indian, preferring ancient British metrics, Rs 7.6 lakhs per sq ft !!!

What sort of a crazy world do we live in where the price of a piece of land just enough to plant your two feet in and stand still, is more than the annual income of 99% of the population of the planet. Well, that is Gangnam style.

There is an ancillary question to be asked. What is Hyundai doing trying to build a corporate headquarters for $ 10 bn ? Investors are asking that question too. The shares of Hyundai were beaten down by 9% when news of this transaction broke out.  After all Hyundai didn't make a profit of $ 10bn last year. The pundits believe that Hyundai overpaid by about 3 times !  Hyundai defended it with typical corporatespeak - "Internally, we think we offered the appropriate price, considering various factors such as our global business plan and its future value ".

This blogger bought a Hyundai car a little while ago, for about the same price as would have fetched 1 sq ft of the land in Gangnam district. He is now unclear as to whether he should have opted to buy the land instead. You see, he is somewhat ( OK severely) dance challenged. However that has not deterred him from dreaming of some delectable dance moves that would make a dozen redheads swoon (Sriram please note !). So maybe, to get the right inspiration, he should have perhaps done the property deal and stood on his 1 sq ft plot of land in the middle of Gangnam district. And then practiced some intricate moves under the watchful tutelage of Psy. Trying to contort himself inside 1 sq ft may have perhaps cured his dance challenged status !

No use crying over spilt milk now. The car is there in the basement (for some hilarity on what this blogger is doing to it, read here). However he is intending to write to Chung Mong-koo, the patriarch of the Hyundai family offering to exchange his new car for the equivalent plot of real estate in Gangnam district. After all you see, its not very obvious which is overvalued more !!

India's most admired company

Which is India's most admired company ?  The results of Fortune's 2014 survey released recently, reveals a surprising name at the top. It is ITC.

For those unfamiliar with Indian business, ITC is primarily a cigarette company. In the good old days, it stood for Imperial Tobacco Company. Today it runs its cigarette business quietly. It has diversified into a conglomerate - Hotels and Consumer Goods being the most visible elements of its business. It does a lot of good work, especially in the agricultural sector. Its work with farmers in various parts of the country is legendary. Its has a great management team and wonderful strengths. It has been there for decades and has been a proven success over a long period of time. Growth in revenues and market capitalisation over the years has been outstanding. Yet, and yet, there must be some feeling of unease of it being the most admired company. It sells cigarettes and still makes most of its money from cigarettes.

Is that right ? ITC deserves the award on most counts - growth, profitability, value creation, quality of management, social work, etc etc. But it fails a fundamental litmus test. A cigarette maker cannot be the most admired company, in this blogger's humble view, no matter what.

The results also show where the priorities and values of business people are. The ranking is based on a survey of essentially business people. I am sure it was a very scientifically done survey and a number of parameters were covered. But the corporate world does not get it, when it comes to how the rest of the world sees everything. Do this survey amongst non business folks and it is highly unlikely that ITC would come out as the most admired company. If the corporate world continues to run by its own set of values, and is not sensitive to the outside world, it can only lead to general perception that companies are exclusively concerned with money and are of dubious morals.

This blogger does not smoke, but is actually a defender of the choice of adults to do so or not. I have no problem with ITC selling cigarettes and making lots of money from it. It serves a consumer need and as long as consenting adults choose to smoke out of their own free will, I have no problems with it. There are lots of addictions in the world which are harmful to health and it is not anybody's business to be preventing others from doing what they might themselves not choose to do. So ITC's success in the cigarette business is something I won't object to, and even applaud. But that doesn't make it a fit candidate for the most admired company in the land.

ITC has been hovering in the top five of this list for many a year. But even Yogi Deveshwar, the outstanding Chairman of ITC, I suspect, would rather wish it was not at the top.

Incidentally there isn't an IT company in the top five. The top five has four companies that have each been around for nearly hundred years  - ITC itself, Larsen & Toubro, Hindustan Unilever and State Bank of India. Only Maruti Suzuki is a relative youngster at 40 years old !! Isn't that interesting ?

Windows 9 ?? Yaawwwn !

It's a sign of the times that a rumour that Microsoft is planning a preview of Windows 9 in end September is being met with a huge yawn. Remember when Windows itself came after DOS. And the launch of Windows 95 ? Each of them was a landmark event in the history of computing. Now, of course, technology has moved on and Microsoft has been left standing still. Who cares about Windows now anyway ?

Actually a lot care. Windows is now largely a corporate product - almost every company uses Windows as the operating system for the millions of computers its employees use. And every upgrade of the Windows operating system, is hugely expensive. Coupled with Office, Microsoft is omnipresent in the corporate world. There every such new version is met with fear and dread by the IT folks - for , a huge bill is coming. This is also why Microsoft remains a highly profitable company.

The rate of change in the tech industry is so fast that it seems almost impossible to create and nurture a brand in the way you can do in other industries. The sole exception to this is Apple, but even there, all that is happening is that the rate of fade is slower than that of the others. Brands get commoditised extremely fast. Do you now care what brand of smartphone you own -  Other than a few  members of the Apple Fan Club, nobody cares. Just pick the phone that is fancy at the moment and at the cheapest price. Full stop. Are you really going to get excited about the coming iPhone 6 ???

This is actually a surprise. In other fast changing industries, (OK; maybe not as fast changing as tech), brands survive beautifully. Show me a man who doesn't lust after a BMW. Or wouldn't mind a Rolex. Or wouldn't fly Singapore Airlines. And yet, it seems very few have cracked the marketing puzzle in tech. There are great products in the tech world. But a great product does not automatically make a great brand. How much ever new products come in the iwatch space, the aspirational brand will still be Rolex. Maybe its simply because the tech world is full of geeks - there are very few marketeers there.

So what of Windows 9 ? If its even remotely as painful as Windows 8, then it will be met with every curse in the land. Microsoft really is pig headed in absolutely not listening to its consumers. Refusing to reinstate the Start button and hiding behind gobbledygook is a marketing disaster on part with New Coke.  And yet, I am sure Windows 9 will deliver all sorts of great tech possibilities while exasperating the consumer. After all it was Bill Gates' mother, in the early days of Windows who told him what fool would make a consumer click the start button to close down the computer.

So if you are a geek, and reading this piece, go out and talk to your granny. She is really your customer. Or you prefer, meet the gorgeous (but intellectually challenged) blonde serving you in the pub. Get her to use your new product without a tutorial. Figure out what makes her tick (imagine the wonderful ancillary benefits of this study). Maybe you can then ditch those glasses and transform from a nerd to a marketing whiz kid. It is then that the great brands of the tech world will arise.

The $1000 pill

How do you price a drug ?  Its a question almost impossible to answer without vehement and justifiable criticism, whatever your answer may be. Nothing typifies this better than the absolute storm raging over Sovaldi.

Sovaldi is a new drug introduced as a cure for Hepatitis C, which was hitherto very difficult to cure. Almost a miracle drug with something like 90% success rate.  In six months it has already become the largest selling drug in the world. In these six months, it has clocked sales of $5.7 billion. Its maker, Gilead, has seen a 50% jump in share price.  Fantastic, you would think.

The only fly in the ointment is that each pill costs $1000 in the US. Or Rs 60,000 if you prefer. You need to take the pills for a six week period, twice a day. That's a bill of $ 84,000. In the rupee equivalent it sounds even more expensive - Rs 50 lakhs.

A veritable storm of accusation and counter argument has arisen. $ 1000 a pill ?? That is criminal argue the opponents. The big bad corporate world is simply gouging the sick to make greedy profits. Bad Bad.

Counters the company - the $ 84,000 treatment bill is significantly cheaper than any alternative which can all be proved to be more expensive with lesser chances of success.  This is therefore a cost saving to patients and instead of being deified, the company is being villified, they say.The trouble with this argument is that the alternative is really liver failure.

This being the US of A, there are all sorts of complications. Medicaid, their programme for providing free medicines for the poor, estimates that it would cost it $ 55 bn if every person eligible for Medicaid and is suffering from Hepatitis C is given this medicine. And the law says no drug that has been approved by the FDA can be withheld from Medicaid.  Of course, there isn't the $ 55bn lying around.  It has also been estimated that the premiums for Medicare (their programme for the elderly) could go up by upto 8% on this single drug alone.

Free market and freedom of pricing is a fundamental tenet of the capitalist world. America, to its credit, defends this even under difficult circumstances. The pharmaceutical industry is a special one - most research results in failure and blockbuster drugs are extremely rare. For every success there are probably 100 failures. If you do not allow blockbuster drugs to make very high profits, there will not be the pipeline of innovation. For all the noise from the rest of the world, the fact is that most of medical innovation comes from the US.

What about the rest of the world, indeed. In previous cases phramaceutical companies have been pilloried for pricing drugs so expensive in the third world that the most needy have no access to them. Gilead, mindful of these pressures, has priced the drug at $11 a pill in Egypt. This has resulted in a storm of protest in the US. If you can sell it for $ 11 in Egypt, why are you charging me $ 1000, shout the American customers (insurance companies, actually, for it is they who foot the bill in the US). They are cursing that America is subsidising the rest of the world on medical innovation. Gilead is shaking its head saying heads I lose, tails you win.

So back to the basic question - how do you price a drug. Yes, free markets and freedom of pricing is important. Yes, huge profits are the attraction for costly R&D which mostly fails. And yet when something succeeds, it creates a monopoly and it is an accepted principle in capitalism that monopolies will be regulated by the government. It is also a fact that, unlike in other product categories, the consumer does not have freedom of choice and is in an extremely vulnerable position at the time of consumption.  Difficult issues to grapple with.

The last body you would expect to give a sane solution to this, is the US Senate, filled with pompous gasbags of doubtful literacy and questionable intelligence. But in this case, this blogger is actively looking to the US Senate to provide an opinion. For the issue has been taken up by Ron Wyden , one of the (only ?) respected, principled Senator from Oregon (Sriram take a bow for electing him). He is one of the few capable of producing a position of substance.

What do you think. Even this blogger, a champion of free markets and rewarding innovation, is blanching at the thought of a $1000 pill. The logic may be impeccable. But to swallow Rs 60,000 twice a day .......

My sympathies are entirely with Argentina this time

Thomas Greisa is an ass. Thomas who , you might ask. This specimen is a Judge of the Southern District Court of  New York. Why should you bother about the "Southern District Court of New York", you might want to know. Unfortunately, the state of the world is that, we have to. For the USA is back to its old game - imposing its laws on the rest of the world.

The problem is Argentina. Remember the many times I have railed against Argentina, here , here and , on the same matter, here. This time my sympathies are entirely with them.

It all stems back to 2001 when Argentina defaulted on its international loan obligations. As is usual in such cases, an agreement was reached with most of the creditors , rescheduling the interest and repayment obligations. The operative word is "most". A few funds simply sold  their debts at a deep discount to whoever was willing to buy them. Up stepped a bunch of hedge funds, whom we shall justifiably call "vulture funds" as the Argentianians have labelled them. This lot have bought up the debt at a deep discount. They have then held out against any settlement and insisted that they be paid in full. They went to court in the US and thus entered  His Lordship  of Southern District Court fame.

Forget all the arguments about a petty judge of a "Southern District Court" imposing his will on a sovereign nation. The worthy has now ruled that the vulture funds should be paid in full, paid before the others who settled and no payment should be made to the others until the vultures have been paid. No less a body than the United States government has backed Argentina, calling Judge Griesa's ruling "impermissibly broad" and raising concerns that it could undermine U.S. foreign relations. The IMF has said that Griesa's ruling could make it easier for a handful of creditors to disrupt a country's efforts to reduce its debt burden. The  pedant is unmoved. He has ruled thus.

The consequence is that Argentina is in default again. They had a payment required to be made to the parties who settled yesterday. They duly deposited this amount which they had to do in a US bank. Unfortunately the judge has ordered that this money be frozen - because Argentina is in violation of his order and have not paid the vultures.

Argentina has basically said that they would honour the obligations of the rescheduled debt, but they are no way going to pay the holdouts in full. In this, they have a case. Restructuring of debt obligations is a common practice everywhere in the world, and more so in the US. The US bankruptcy law, on which the entire business system in the US relies in, has this as a fundamental precept. Business activity in the US, leave alone in the world, will come to a grinding halt if a few vultures are allowed to block any debt rescheduling process.

Why has the judge ruled like this ? Officially he has taken umbrage under the Ramamrithamesque parri passu clause, which is a technicality not worth elaborating. The real problem is that Argentina long refused to accept his jurisdiction over a soverign matter , and when it was forced to, basically showed him its finger. It is a dangerous strategy to show the finger at such a man. He has basically showed Argentina the finger back.

Pointed fingers apart, the original problem was of course Argentina's ridiculous management of its economy, piling of debt and reaching a point of default in the first place. In this, they are of course, not unique. Other notable members of the club - Greece, Portugal, Cyprus, Ireland keep them good company. India is also making every effort to join them. You could argue that the US is also an honorary member, given the levels of its debt. I wonder what the reaction would be if Judge Li Ping of the Second Sessions Court in Beijing ruled that the United States had to pay Chinese bondholders before Social Security cheques were despatched to US citizens. Perhaps he could cheekily rule that the bondholders must also be paid before the Medicare claim of Thomas Greisa is honoured.

The only beneficiaries out of this decade old saga are the lawyers. Imagine the fees they must be raking up.

A free idea for you to make millions from

Entrepreneurship is all about ideas. If you have an idea for a great product or service, capital, talent and profits will flow to you. You will become a multi millionaire. In recognition of all the patience you dear readers have shown, this blogger now offers an idea for free - a product from which you can make millions !

The idea is, well, an old fashioned one. The product I suggest to you is the typewriter !! Before you groan, consider the following facts.

The country (to its eternal credit) which is completely fed up with the antics of the NSA is Germany. Even in the erstwhile East Germany the extent of snooping and surveillance probably did not go this far. When revelation after revelation brings home the extent of NSA spying (even to the extent of tapping the phone of Angela Merkel), the Germans have become angrier and angrier. And businesses, and government, have started to react in the only way possible - ditch the computer !

Back comes the good  old fashioned typewriter. German defence contractor Diehl has switched entirely to typewriters and snail mail for all sensitive documents and correspondence. Many German politicians are deciding to follow suit. Not any typewriter mind you. Only the non electronic variety will do. Complete with carbon paper for copies.  A typewriter with not a semiconductor in sight, thank you. That's the only way to be safe from the spies.

Typewriter sales have gone up by 35% and is expected to go up by 100% in the near future. Now, very few make typewriters anymore. In Germany, only two companies of any stature make them - Bandermann and Olympia. And they are Expensive, complete with a capital E. There may even be a waiting list to buy a typewriter; obviously there is no capacity for 100% growth.

Where Germany leads, the rest of the world will follow. Many Americans would be happy to follow suit. Many politicans of all stripes might dutifully switch - not so much because of the spying, but because they would rather that their antics do not leak out, at least in print. Without a doubt there will be 10 million Chinese, perhaps all of them from the Communist Party, who would also like the safety of something that cannot easily be monitored. And while you may not care for it, the shady characters, right from petty criminals to terrorists, would no doubt love the security from snooping.

So build a factory to make typewriters in some village in India. Make a zillion of them. Export the whole lot. Advertise the world over that your products are the only ones that are NSA proof. Guarantee to customers that they cannot be spied upon except by somebody staring right over the typist. As a corollary business, supply carbon paper and printer ribbon at $1000 per pack (Hewlett Packard, you are getting beaten at your own game). And as a future foray into services,  also supply typists - millions of Rajalakshmis available wherever you want. All you then have to do is to count the cash flowing in.

Underneath the frivolity is a serious point. There will be a backlash against the all pervasive snooping. For some things at least it is better to go back to trusted technology of the old - the typewriter, the comptometer, the pen, the paper, and even, perish the thought,  the face to face meeting !

FUSEVISUAL - 5 Questions | 5 Answers | 5 Images

For almost a year now, the website FUSEVISUAL has been doing insightful interviews of a number of photographers from around the world. Recently, I was interviewed (here), and found myself sharing a number of things with my interviewer, Cameron Davidson, I hadn't intended to. I've been following the site for some time, and while some of the photographers I know (Renee Comet, Robert Seale, Seth Resnick, Chris Crumley, and Susana Raab, many I don't. Cameron (whom I have known for many years) takes a surprisingly in-depth look at each of them, and it's refreshing.

The concept is simple - 5 questions and their answers, along with 5 images. The idea, of course, is to draw in viewers to see, as the founders write "to deliver a site that uniquely showcases visual communication experts", but the mission is to not only share the answers and images, but also to make a difference through charitable contributions both in the United States, and Haiti. Their "Give" page details these charities, and encourages others to get involved.

So, go check out FUSEVISUAL, not because I'm featured there, but more importantly, because they're doing good and you just might learn a thing of two (or a dozen) about how other creatives have mastered their craft, as a part of your journey to master yours.

(Comments, if any, after the Jump)

---

Please post your comments by clicking the link below. If you've got questions, please pose them in our Photo Business Forum Flickr Group Discussion Threads.

Has the world gone mad ?

I think it has. Nothing but madness can explain the awfulness of the last few days.

The downing of the Malaysian Airlines plane over Ukraine is one of the sorriest events to ever happen. Two bunch of loonies are fighting over God knows what - yes Russia is meddling in Ukraine, which as a country has almost ceased to exist and everybody is bent on killing everybody else. But to shoot a civilian airliner that was simply overflying the country ??? What sort of a nut case or , in reality a group of nut cases wants to shoot that down ? For what ? What did the poor people who just had the misfortune of being in that plane do to deserve this. Reports say a large number of them were actually flying to Australia for an AIDS conference. Some of the leading AIDS researchers have been lost to the world. What a senseless tragedy.

Consider the situation of Malaysian Airlines. What have they done to deserve the double whammy over the last few months. It is now difficult for them to even survive.

And then, there is Gaza. Some terrorists kidnapped some Israeli boys and in retaliation some Palestinian boys were killed. Look at how this has escalated. Terrorists from Gaza are firing every rocket they can at Israel. Israel reacts by meting collective punishment to the entire population of Gaza. Hundreds of innocent lives have been lost, almost entirely Palestinian. Its the poor ordinary folk who are suffering miserably. Very little of sanity seems to exist in that place. John Kerry must be tearing his hair out - against all odds he has invested every ounce of energy he has to make some movement in the peace process. And this is what has happened.

Simply because it has been going on for so long, the awfulness of what is happening in Syria, and its spillover into Iraq is taking third place in this dubious list. Every maniac, criminal and lunatic seems to be there killing everybody else. The innocent civilian suffers, and suffers miserably.

In my own home city, a few hundred metres from where I live, a six year old girl is raped in school  by some staff. A six year old for God's sake.

Today is a day to seriously ask whether the world has gone mad. Amidst this mayhem, matters of business and economics seem almost insignificant. If there are sane people left in this world, hopefully the vast vast majority of us, we should rise and exterminate the madmen. This isn't a rational response, but in today's insanity, little else can be said.

I pray for all those in torment today.

Burn the green card !

Beware, if you are a US citizen, or a green card holder,  living abroad. FATCA is on you !

FATCA stands for the Foreign Account Tax Compliance Act and is the latest weapon unleashed in the awful American tax code. On measures of awfulness, FATCA must be a contender for one of the worst pieces of legislation ever passed. It takes America's unilateralism - something this blogger has long railed about - to a new level.

Basically FATCA is an imposition of its tax laws on every financial institution in the world, wherever they may be. Every bank, even in Timbuktu, is required to report to the US authorities, details of bank accounts and transactions of all US persons (citizens and green card holders). If they fail to do so, they would essentially barred from doing any business in the US. Terrified of being shut out of US markets, almost every country of any standing has signed bilateral agreements with the US to this effect. Did I mention the word, bully ?

All this arises from the stupid concept that prevails only in  America, and in no other major economy in the world. America taxes its citizens on global income, even if they lived entirely abroad and earned all their income abroad. So such citizens pay taxes in the country where they live in AND to Uncle Sam.  In every other major country, depending on your residency, you are taxed on where the income arose only; not on global income.

The ostensible reason for FATCA is to go after US citizens who are hiding their income overseas and avoiding taxes. While that may be a fair objective,  it suffers from two major flaws - the first that you want to tax global income and second that you are simply trampling on every other country, just because you have the capability to do so.

FATCA came into effect three days ago. It will have major ramifications for anybody connected to the US, but living abroad. Consider the question of privacy. America requires every country to report transactions, irrespective of  the country's privacy laws. And yet if the same country turned back to the US  and asked it to report similar data for its nationals, the US will tell it to go away citing privacy considerations. Did I mention the word hypocrisy.

All sorts of unintended consequences are emerging. Some US citizens living abroad are considering surrendering their US citizenship. The rate of surrender, though still small, has quadrupled since FATCA came on the horizon.  Some foreign banks are basically telling US citizens  to go away and not have accounts with them - they simply don't want to get squashed by the strong arm of the US. Some employers overseas are turning away US citizens, considering them not worth the bother.

Consider the US green card holder living in India. Many take this only to escape the brutal visa regime. Parents of children now living in the US maybe. Now they are caught in the FATCA net.

This blogger is reminded of a famous cartoon in The Economist many years ago. The Economist was commenting on how desirable the US green card is even for ostensible haters of the Great Satan. The cartoon featured a rabid mullah, yelling Death to America in a protest somewhere in the Middle East - and he whispers as an aside to an American journalist - "Can you get me a green card "!

Maybe the time has come to change the punchline. Can you burn my green card !

Yo

A mobile phone app start up has received $ 1 m in funding. Nothing special about that - after all thousands of start ups get funding. What is interesting is the nature of the app itself. It is called Yo. And what it does is that you can send a message - Yo - to any of your friends. That's it. That's all you can say - Yo. Apparently its USP is that you can say Yo in two taps instead of the 13 taps it will take you in Whatsapp.

 I am scratching my head in bewilderment. Why would I want to say just Yo to you ? In comparison, Twitter seems positively garrulous. Yo is being downloaded like there is no tomorrow - it has reached the top 50 downloaded apps on the Apple store. For some strange unexplained reason, iphone users want to say Yo more than Android users !

Apparently this is the start of something called "contextual communication" ! If a world cup match is going on and you send a Yo, it means - Dumbhead; somebody has scored a goal; turn on the TV and watch it. If you get a Yo from your boss, it could mean get your ass up here right now, or don't be playing that game on your PC - get to work. Depending on the "context", you see. Wow. 

This brings me to the whole apps mania. Apparently iOS is good because it has 1.2 million apps. I am absolutely sure that 1, 999,950 of them are utterly useless and inane. Honourable mention must be made of

• Pimple Popper - a game apparently
• Places I’ve Pooped - Globally with Google maps integration
• Drunk Dial No - which very helpfully prevents you calling somebody when drunk by disabling your contact list
• Paper racing - contest on who can roll up toilet paper fastest
• Tap that - It helps your phone do , er, "it" with another phone !

Not sure if Yo falls in this category, but I would suspect Indian politicians might want to give it some close attention. The current breed of politicos all have taken to Twitter with a vengeance, trivialising complex and major issues much to this blogger's irritation. Worse still, the irresistible Tweet button is extremely prone to foot in the mouth disease. If instead, they simply said Yo, well, there is no problem, is there? By "contextual communication" you can interpret it in whatever way you want. And the foot in the mouth politician can of course deny that he never meant it that way.

Amongst those cheering this app must be the Indian telecom companies. You see, contextual communication was discovered long long ago in India courtesy the "missed call". You simply gave a missed call and the receiver understood what you meant. Telecom companies are furious at this practice because they earn absolutely nothing from this. Instead, if your driver switched to Yo to ping you that he has arrived, well, the Indian telco would earn some revenues courtesy the pingers needing to use data connectivity. I strongly suspect Airtel or Idea might be behind the $ 1m financing to this start up !

In the new world of Yo, I suppose this rather verbose blog is an anachronism and this blogger a dinosaur. Perhaps he would go the dinosaur way and become extinct. Yo !

Money can't buy everything

If you nodded your head saying money can't buy love, that wasn't what I meant ! After all this is a business blog and starry eyed affairs of the heart seldom feature here !!. Money can't even buy the thing money is supposed to be good at buying - a major sports championship.

The trigger for this post is the NBA finals that concluded yesterday. The San Antonio Spurs defeated the Miami Heat to win the "World Championship" of basketball . For the sports purist, it was a wonderful result. The Spurs played sublime basketball. They came back after a heartbreaking loss last year to win it this time around. This is their fifth championship.  But this post isn't about the sport - its about the money.

In sports, superstars make insane amounts of money as salaries. If ever there is a breed even more mercenary than bankers, it is sports stars. Salary levels are simply insane. Kobe Bryant the highest paid NBA star, earned a salary of $ 1 per second ! There are 31 m seconds in a year and that's what he earned - $ 31m in a year. Or if you prefer $ 85,000 every day. And he was injured for most of the season and hardly played - he made all that money sitting on his butt (Sriram please note !). At least Kobe Bryant is one of the world's top players. What about Amar'e Stoudamire making $ 22m. He can't even make it into his own team.

NBA salaries are guaranteed by contract - it doesn't matter if the player plays well or awfully. It doesn't even matter if he is dropped. He just banks the money. The most outrageous case happened five seasons ago and I blogged about it here. In every other field of human endeavour, pay has some link to performance. Not in most sports and certainly not in the NBA.   Player salaries inflate to obscene levels and for the contract duration it absolutely does not matter what the player does.

In this mad world of the NBA, the San Antonio Spurs stand out. Their top players take pay cuts so that the team can afford to hire good players. Their top players - Tim Duncan, Tony Parker and Manu Ginobili, have stayed together in the same team from the beginning. They could have doubled their salaries going elsewhere. They didn't and instead took pay cuts. Their coach Greg Popovich has been coaching them for 17 years. They play together as a team. They are unselfish - there are no giant sized egos. Their young rising star, Kawhi Leonard, won the Most Valuable Player award of the Finals. His salary ?  $ 1.9 m.

Now you can understand, why I am incredibly happy that the Spurs won. This is sports at its best. In a world of giant sized egos, obscene salaries, switching teams at the drop of a hat, the San Antonio Spurs represent modesty, team work and the spirit of sport. There is simply no other major team in any sport, even remotely like them.  Think of Tim Duncan. One of the greatest players the game has ever seen. He's into his 17th year - his contemporaries have long retired. He is still a great player. He takes pay cuts year after year to help the team . He is self effacing to a fault. And he just wins. He played brilliantly in the Finals. It is his fifth NBA championship. This is what sports, and a sportsman, ought to be like.

And here's another reason to love them . In the backwaters of Texas, where you would least expect it, is the most international of NBA teams. Their team consists of two Frenchmen, one Brazilian, one Argentinian, one Italian, one Australian and one Virgin Islander. Of the players who took the court in the last game only 3 were American.

All hail the San Antonio Spurs.

PS. One more reason to adore Tim Duncan. He doesn't tweet. Oh Lord; what a blessed relief :)

The job interview is a joke

It is fairly clear that I would not be able to get a job with Rockwell (a web hosting company) or the Kerry Group (food ingredients company).

This is because I would have to answer, in the selection interview,  "How would you react if you were shot in the head with a Nerf gun?" (Rockwell) or "Is a Jaffa Cake, a cake or biscuit ?" (Kerry). Since I do not know what a Nerf Gun or Jaffa Cake is, it can be safely assumed that I would flunk the interview.

The Glassdoor Blog chronicles each year the weirdest questions that companies have been known to ask in interviews. It of course makes extremely interesting reading and I would strongly recommend it instead of that useless report you are writing at this minute ! How would you answer to ""How many square feet of pizza is eaten in the US each year?" (Goldman Sachs !), or  "Can you instruct someone how to make an origami "cootie catcher" with just words?" (Living Social), or, "If you were a pizza deliveryman how would you benefit from scissors?" (Apple)

Apparently these seemingly weird questions are designed to assess "creativity" and "lateral thinking". Bullshit. Anybody who says he  can fathom creativity from an answer to a weird question in a pressure cooker artificial setting like an interview is just fibbing.

Long time readers of this blog would know that this blogger rather enjoys needling HR types. It has just been noticed that this breed has been spared a long time from good natured ribbing. So this post is to "restore the balance"!

I am of the opinion that the unified theory in astrophysics will be solved before we can fathom what goes on inside the recruitment department of a company.  As anybody who has ever sent a CV to a company knows, even black holes cannot match the disintegrating capability of a HR department. CV's vanish without a trace - has anybody ever got an acknowledgement of a CV ever ? And then by some miracle unexplained, you will get a call at 11.14 in the night requiring you to be present for an interview at 6.24 in the morning the very next day in a location 83 miles away from your home. By heroic efforts you land at the spot at 6.15 only to find that the office is locked and won't open till 9.30 AM. You hang around not wanting to miss the opportunity. At 10.00 the office is opened and you are ushered into a windowless room and told to cool your heels. Hours come and go by and you realise you have been forgotten. You timidly approach the security guard again and remind him that you have been sitting bolt upright for the last four hours without even going to the loo. He takes pity on you and promises to inform the HR department. 3 hours later a lady of gargantuan proportions barges in and orders you to proceed for an interview . You land in another room and wait for another half an hour. A constipated owl enters, mobile to the ear, and proceeds to finish a call for the next 15 minutes. Sundry suits land up. The interview is supposed to begin. The interviewers realise that they have no idea what they are interviewing for. Of course, they haven't seen your CV. They don't even know your name. They take your copy of the CV from you and start skimming. And they ask you to begin narrating your background in your own words because they are illiterate and can't read your CV.

I challenge any HR type to prove that this is not an accurate reflection of the truth.

And then, if you are asked "Can you say: "Peter Pepper Picked a Pickled Pepper" and cross-sell a washing machine at the same time?" (Mastercard), I declare that it is acceptable grounds for defence against a charge of murder !!

Yet again, the US pisses off another country

Why is it that I, an incorrigible Americophile, am ranting against the US every month in this column ? I have long admired the US, the society, the culture and, especially, the economics.  I continue to be an unabashed admirer of so much in the US. and yet readers of this blog could easily mistake me for a "burn the US flag" extremist, considering the number of times I am criticising US policy and action in recent posts.

Take the case of BNP, the French bank. Like so many banks before it, it has been caught up in investigations by the US on money laundering. The crime committed by the bank is that it routed transactions to Iran, Cuba and Sudan covering them up. Standard Chartered had a similar problem and I blogged about it here. Now it is BNP's turn. 

The problem is not the act itself (although I will question even that later). BNP admits fault, is prepared to pay a fine etc etc. The problem is the quantum of the fine - $ 10 billion - the largest fine in the history of the world and dwarfs even the BP fine for the oil spill ($4 bn) . That's a ridiculous quantum of fine, by any standards. The French are mightily pissed off. The French finance minister has termed it completely unreasonable and a diplomatic row has broken out. Obama visits Paris in 2 days and Hollande is going to raise this with all puffed up anger. This is another instance of US unilateralism. Yes, by the strict letter of the law, they can act unilaterally. A more rational way would have been to involve the French government and "negotiate" a deal. This is what happens in international diplomacy - if the shoe was on the other foot, the US would have done exactly that. In a global world, showing a finger at the French will  simply mean retaliation. General Electric can now kiss goodbye to any chance of acquiring Alstom.

Quite aside from the fine, my problem has always been the US attempt to impose its will on the world, through any means possible. There isn't any evidence that BNP actually laundered money of criminals or terrorists. What they did was do transactions with Iran, Sudan and Cuba, which is against US law sure, but is a matter of foreign policy. There is no United Nations embargo against trading with these countries - it is simply US policy. Take Cuba. Is there any rationale today for the US embargo ?? Just because the US's  nose was punched in the Bay of Pigs in 1961, is there any moral justification for an embargo 50 years later. Why should the world dutifully follow and refuse to shake hands with the Cubans. So the US dictates what is a crime and what isn't and the rest of the world simply has to follow.

Yes, I know the argument, the US is simply imposing its law on its land and every foreigner must comply. But  international finance flows simply do not exist in any place. The US dollar is a global currency and it is easiest to route all transactions through the US - that's all. The transaction is not taking place in the US, the parties are non US - all that has happened is the the funds have flow in and flown out, probably on the same date simply because that was the most convenient thing to do. For that a $ 10 bn fine ? When financial mayhem is unleashed on the world by US banks, there is a bailout. For this there is a $ 10 bn fine.

It has long been my belief that the truly powerful rarely display their power noisily, if ever. They don't need to.  In the coming world order, especially economically, the US will not be a "superpower". It may be the first amongst equals - that's all. If every other "power" acted like the US is doing today, it will cause considerable harm to the US itself . In its own self interest, the US should behave like a parent and not like a maniacal school teacher.

I wish there was something - anything - that the US would do which can make me gush in praise. I wait in vain. If this is the lot of an Americophile, imagine where the true "burn the US flag" idiot would stand.

The human side of disruptive innovation

In the blue corner - Uber, the taxi app that puts a customer in touch with the nearest driver willing to drive you to wherever. In the red corner is the traditional licensed cab. An almighty fight beckons in most cities in the world.

Nowhere is this contrast starker than in London - the home of the black cab. Any visitor to London knows the unique black cabs that are ubiquitous all over the city. I know Londoners complain about them, just as people in any other city do of their own cabbies, but having seen a fair bit of the world, I can testify that London cabs are amongst the best. The cabs are spacious, they are almost always available, they go wherever you want, the drivers are usually good, they rarely cheat you and because of "The Knowledge" they know the way to where you want to go. The only drawback is that they are outrageously expensive ! Anybody who say "Bah" at my description of the London cabbie is welcome to meet his close cousin in New York  or a more distant cousin , the Chennai autowallah who are incidentally of exactly the same rudeness quotient.

"The Knowledge" is a unique feature of qualifying as a London cabbie. To get your license you have to master the roads and routes of the city intimately. During the test, you will be asked to go to odd places chosen at random and you have to know the exact route - no referring to maps, no asking anybody, no taking any help at all.  It has been this way historically. No London cabbie would say he didn't know the place you wanted to go to. That was great..... until the GPS came. In one stroke, all that  "knowledge" has become useless.  Its easy to say that is progress, but put yourself in the shoes of the cabbie who has spent 4 or 5 years slogging away at the routes, only to find the rug whisked from underneath him in an instant.

Uber, compounds this problem. One of the great advantages of the London cabbie was that he was (mostly) available anywhere. But it came at a price. Uber changes all that. A cheaper mini cab can be put in touch with a prospective customer in a jiffy.

Predictably the London cabbies are trying to protect their monopoly. They are launching court cases, they will go on a strike and disrupt London, etc etc.  But it is a losing battle. They don't stand a chance in the long run. London is not Paris where they will protect the surly, unavailable, rude driver as an essential part of Parisian culture !

I know this is all great for the customer, this is technology at its best offering a  real value to the customer, this has happened to so many industries and will no doubt happen again etc etc. And yet I can't but help feel a bit for the cabbie.

The cabbie is often a poor guy. He knows no other trade. He doesn't have a huge education. He slogged his butt to pass "The Knowledge", and works hard to make a living. In just a couple of years, through changes he doesn't comprehend, he may be out of a job. And what does he then do ? Not many options other than to get on the dole. The "society" that benefited from the technological change, now picks up the cost through the social welfare system.

I've often felt uncomfortable when change leads to unemployment of those who aren't easily employable elsewhere. Shareholders, companies and consumers benefit. That is good. But  some workers suffer and their costs are picked up by governments, and therefore societies. I can't but help feel a little pang of regret. Yes, they should adapt. Yes, they should retrain to find another job. Yes, that is the price of progress. I understand all that. But if I am a 50 something , with a couple of kids, trying to pay off a mortgage and I am thrown out into the streets for reasons I can't really comprehend , then its tough to appreciate logic and rationale.

Yes, I know its not new. Millions of factory workers have been through this. And yet, despite all the logic, I feel just a tad sorry for the London cabbie.

PS: I write this post under extreme stress. My good friend Sriram has turned into a grammar Nazi. I know my posts might cause the Queen to raise her upper lip at the English.  But to be caught out by an American    - that will deeply hurt my pride :):)