"As soon as liberty is
complete it dies in anarchy."
—Will Durant (American,
1885-1981)
Word for the day
Venifact (n)
A pebble or cobble that has
been faceted, grooved, and polished by the erosive action of wind-driven sand.
Malice towards none
You are Just and Righteous
only if you are on my side.
#ElectionCommission
First random thought this morning
Ever wondered what's the life
expectancy rate in India!
The way people in their late
forties and fifties are branded as kids and youth, it feels close to 120yrs!
But my insurance premium calculations
are based on a life expectancy of around 70years.
What's amiss here? Is LIC
cheating on me or the politicians & Bollywood fraternity?
Indian IT & Pharma at crossroads - 2
It is important to note that
Indian pharma and IT industries have glaring similarities. For example consider
the following:
(a) Both businesses have mostly grown on the export market (mainly
US). Though there is huge unexploited potential for both industries in India,
the investors have mostly focused on the export potential and invested
accordingly.
(b) Wage arbitrage has been a key factor in the growth of both
businesses. BPO and CRAMS have been amongst the key jargon in IT and Pharma
industry respectively.
A large pool of the cheaper highly
skilled English speaking workers has been the magnet that attracts the global
businesses to the Indian It and Pharma industries.
(c) Indubitably both the industries have amazing achievements in
developing strong and innovative processes, but new product innovation has not
been the hallmark of both the industries. There are few IT products and few new
pharma chemical entities which are attributed to Indian IT and Pharma
enterprises.
Besides a whole lot of
similarities, there are some differences, that place Indian pharma industry on
a much stronger footing, as compared to the Indian It industry. For example,
consider the following:
(a) The Indian IT industry has mostly focused on the developed world,
struggling with demographic and skill inadequacies. However, the Indian pharma
industry has spread to the emerging world also and bridges the critical supply
gap for life saving drugs.
(b) The Indian IT industry does not touches the consumers directly in
any significant manner. It's mostly a B2B business. Whereas the Indian pharma
industry touches consumers directly across the world, besides servicing the
large global corporations in their R&D and manufacturing function. It is a
B2B and B2C business in equal measure.
(c) Theoretically, the potential for both the industries is
tremendous in domestic market. However, the potential for Pharma industry is
much more tangible, as compared to the IT industry.
IT industry in domestic market may
grow more like cottage industry, with small solution providers doing the
maintenance and servicing jobs, while the larger product and design business
continues to be imported.
Whereas the pharma industry, in
domestic market, could play a dominant role as local innovator (generic for
global innovations).
I would therefore be relatively
more positive on Indian Pharma industry as compared to the Indian It industry.
But as I said yesterday (see here), in IT one must be very selective. I will buy a
pharma fund and select IT stocks.
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