Wednesday, October 31, 2007

Networking the poor

New York times reports on a new social networking site (yet another!.. hold on) that connects day laborers in the Indian city of Bangalore with potential employers. I would keep my fingers crossed on the monetization and scalability of this entrepreneurial venture, but do feel that it is an excellent way of bridging the gap between households looking for maids, drivers and gardeners with people who can step into such roles.

Although social networking sites initially seemed like by-products of a connected age, they are increasingly becoming vanguard models of generating value for customers and providers. The hottest wars are no longer between Microsoft and Apple, or between IBM and Sun, they are between Google and FaceBook, Myspace and Facebook, so on and so forth! It is interesting to see that this entire boom is actually being driven not by tangible goods that people consume, but information and content that are no longer in the touchy feely world! What Microsoft did to IBM, Google did to Microsoft and now it increasingly seems like Facebook might pull it off on Google!

Monday, October 29, 2007

“Gap” in implementing laws

There was never an issue with making laws in India. The Indian constitution and our penal code is probably the most comprehensive written legal document in the world. Yet, its magnanimity can only be matched with the monumental failure in implementing these laws. Gap, the major US retailer finds itself amidst reports of using an Indian sub-contractor who apparently has been enslaving children for the job.

Investigative journalism is probably the only way to get such stories out. Given Gap's good record in ensuring that its contractors abide by laws, investors and consumers might consider this on instance as an oversight. However, what needs to be taken note of is the fact that there are perhaps of thousands if not millions of small businesses which get away with such horror due to Indian alacrity in law implementation. If there is any area where money needs to be spent is probably in setting up processes of governance which oversee such issues. Infrastructural issues such as power, roads, and energy get their due attention in any discussion involving India's growth. What is forgotten is the fact that the country lacks proper institutional practices in law-implementation.

Moreover, there is also a chicken and egg situation playing out in the US economy. First, China was embroiled in a controversy involving lead-paint - a direct consequence of lack of quality control processes and adherence to international laws. Now, if the Gap fiasco is any indication there are bound to be hundred of such cases in India, where some major US retailer is involved. India and China provide an excellent backdrop for such fiascos to play out. So is the increasing consumer need in the US for lower prices driving manufacturers in these countries to lax out on their policy implantation? Or, is it the lax policies in such countries that is enabling major US firms and subsequently the consumers to benefit.

Capitalism provides a quick and dirty solution to solving hunger and poverty in India, because the kids working at such sweatshops to at least get a meal a day. If we remove the ability to work from them – who is going to feed them? Gap? US? India ? who? But then, is it morally justified to exploit this need for survival in poor countries to wear fancy clothes?