Wednesday, December 6, 2017

Consumerism and decline of the Throw-away Society

We’ve got kind of a problem here. On the right side of the pendulum, consumerism has reached an all-time high, with products reaching their planned obsolescence within absurdly short time-spans and new products being rolled out (and bought) by the millions every day. And, since every action has an equal and opposite reaction , we have to expect consequences. So, on the left side of the pendulum, we’re looking at the very real possibility of a mass extinction, the sixth on record for our planet and the first since the extinction of the dinosaurs – sixty five million years ago.

We live in a throwaway society. Innovation in the tech industries mean ever more powerful products come to market. But the death of repair shops and a culture of reliance is not simply the result of shiny new things. Corporations, and capitalism itself, requires planned obsolesce. It’s tempting to write off the decline of repair in the West as collateral damage – just another unintended cost of globalization – but the evidence suggests that it’s actually an intended consequence. To see why, it’s helpful to look at the particular needs of capital in the global growth economy – needs that led to the creation of the consumer culture just over a century ago.
Market for neo-capitalists in the growth


However it is not so rosy in these developing countries, where expectation is that there is no collateral damage, in actuality the rot is widespread in these new generation of so called service-oriented companies professing western liberalization on the economy. The real reason is that the modern consumer culture was born – not as a response to innate human greed or customer demand, but to the needs of industrial capital. These new mega service oriented corporations are catering to even bigger corporations in the west in a pure crass consumerism culture. There is no genuine culture of reliance or of local human development in these new-age mega corporations  which cater exclusively to who ever spends on them and ignore their environment including their own buildup human capital.



The consumption of household goods in Western society is now at its upper limit, so much so that Steve Howard, Ikea’s head of sustainability, said it had reached “peak stuff”. While he was quick to say that this did not contradict Ikea’s target to double sales by 2020, he suggested a break from a prevailing “take, make, use, throw” economic model towards a circular model that encourages repair, reuse and collaborative ventures that share the use of products. In reality obsolescence has been a particularly powerful force in the high-tech world, where the limited lifespan of digital devices is more often the result of 'innovation' than malfunction. This is forcing the new-age mega high-tech to rely on this artificial innovation rather their pure technological or customer excellence. Who ever has stronger authority or requirement to stay in this new-age supply chain is being continued by the capitalism until they find next big consumer who can continue the innovation life-cycle. This attitude has destroyed the corporate culture of the developing nations considerably by introducing the back-door consumerism in everyday people life.




There are, obviously, a boatload of reasons why society has evolved into such a remarkable waste producing machine. Whether its food, housing, energy or consumer products, we are taking more from the planet than we ever have before, and there’s more of us doing it. Most of us eat more, use more, buy more and have more than we need. And we throw more of it in the garbage. A lot more.

Take, for example, this scenario. In 1977, the average annual income per capita (US) was $5,785.00 ($20,256.00 2013 CPI-U-RS adjusted dollars). In 2013, the average annual income per capita was $28,829.00[3]. The Apple II (one of the first mass produced microcomputers) came out in 1977, and could be purchased for an average of $1950.00[4] (depending on memory) with a base price of $1298.00[5]. That means for the average person to buy the average Apple II computer in 1977, they would need to shell out a whopping 33.7% of their annual income. For the purposes of this scenario, and understanding that this is an oversimplified example for argument sake, I’ll stick with Apple; the average price of a MacBook in 2013 was $1,286.00[6]. So, for the average person to buy the average Apple computer in 2013, they would need to spend just 4% of their annual income. Needless to say, affordability for tech items has increased considerably. This example is just for computers, but think about all of the other equipment we rely on that was once out of reach for the average person. Vehicles, televisions, phones, electronic appliances – in developed nations these things are staples, we all have them – multiples of them even, and we upgrade them at an alarming rate. Drawn in by advertising that boasts leading fuel economy, high efficiency, faster processing speed, better graphics, we buy things we think will improve our quality of life, and often even be better for the environment. In reality there is no requirement for such massive splurge in the electronics, however just because the economy requires this these new-age mega corporations are forcing people to consumerism. This rot apart from consumer's high-tech habits is affecting the long term stability of their families itself.



Pope recently said people today have been stripped of their humanity and turned into cogs of a "social, economic system, a system where inequalities rule." He likened the process to the way Italian "grappa" or brandy is made, in which grapes are distilled and transformed into something completely different. Individuals, he said, are also being run through a sort of "organizational" distillery -- transforming their original essence, making them "lose their humanity" and "become an instrument of the system." He said there is "a politics, a sociology" and a mindset of people being "disposable; you throw away what isn't needed, because man isn't at the center." Low birthrates show that children are considered disposable, as are the elderly, and also an "entire generation of young people, and this is very serious." High unemployment for young adults has created a "neither-nor" generation of young people who "neither study nor work," he said, because -- for so many -- getting a higher education isn't possible and there are no jobs. This is a real downward spiral...
Addicted to Consumerism/Throwaway culture

People need to be made the focus again and become "the center of society, of thinking, of reflection," he said, urging the group to study and reflect "so that man is not disposed of." That the human person should be at the center of all things, "isn't theology, it's not philosophy, it's human reality," the pope said.

Unless this rot of throwaway society due to consumerism is tackled by the government watchdogs there is a big possible impact for the Human race as a whole and the reality of the human life. With the raise of robotic economy there is a real danger of humans in third world countries controlled by these mega service-oriented corporations becoming decadent in near future.


References

1. Consumerism, Mass Extinction and our Throw-Away Society, Kristi Gartner, https://www.theartof.com/articles/consumerism-mass-extinction-and-our-throw-away-society
2. Our obsolescent economy: modern capitalism and 'throwaway culture', Steve Gorelick, https://theecologist.org/2017/sep/26/our-obsolescent-economy-modern-capitalism-and-throwaway-culture

Thursday, September 28, 2017

IT slowdown & self destructive tendencies



IT slowdown

Indian IT outsourcing was thriving on labor arbitrage, a concept that refers to the shifting of jobs where labor and the cost of doing business is inexpensive due to the reduction or removal of barriers to international trade. However, geopolitical developments across the globe, such as ongoing Brexit concerns, and radical industry shifts to new technologies like cloud computing have sounded out some warning signals to these firms.

In a recent presentation to Nasscom, Global advisory firm McKinsey & Company said that nearly half of the workforce in the IT services firms will be “irrelevant” over the next 3-4 years. A similar view was echoed by Capgemini CEO who feels that 60-65 percent of the workforce are just not trainable.

According to a study by Horses for Sources, India is likely to lose 640,000 jobs to IT automation by 2021.



Chart : Total impact of automation on IT/BPO services workers by major country (all skill-levels across all workers)





Automation



Robotic process automation is already a buzzword in industries around the world. It presents a massive challenge to India’s software services sector. IT services providers must not only explore new service lines and solutions but also invest in building new capabilities and re-skill employees with emerging technologies.

Unfortunately, for the USD 155 billion industry, the imperative to structurally reorient the business has come at a time when they are facing headwinds like the ones from President Trump's protectionist agenda.The IT service industry employs around 4 million people. A large majority are engaged in jobs that are likely to be non-existent in the future. The old-fashioned manual coding jobs are likely to be replaced by automatic coding and cloud computing that significantly reduces the size of the workforce.

Slow revenue growth and adoption of newer technologies — cloud computing and automation platforms — have started replacing engineers. Hiring will definitely be slower than revenue growth as IT companies try to make their existing employees more productive. The slow pace will affect the middle management as well lower rung of employees doing work that can be automated.


Easy Way Out

The IT industry's success story is not a straight line. The Y2K provided a great opportunity for it to penetrate global corporations while expanding its revenue base. The dot com bubble perpetuated by the internet companies impacted its growth but lasted only for short period of time. In the meantime, US went through a couple of recessions with the 2008 financial crisis being the biggest. The industry also overcame several technological shifts by quickly adopting new technologies and retraining its work force. The Indian IT industry used every crisis as an opportunity to re-invent and re-establish itself as a formidable player in the global software space. Today, it is a mighty, dominant force in the global outsourcing industry with more than 60% market share.

The industry is facing several headwinds today, of which some are structural. The whole world is going digital at a rapid pace. Newer technologies like cloud, mobility, Artificial Intelligence, Virtual Reality, etc., are redefining how global corporates consume and spend on technologies. While the global corporations still spend a substantial amount of money on legacy software, the incremental shift in spending on new technologies is humongous. This is a structural change and the industry needs to take several steps, both internal and external, to be relevant in the new digital era.




Chart : Companies with most H1b approval in 2016


Chart : Share of H1b for Outsourcing companies



The new numbers from the agency show that these companies that outsource IT roles do make up a large portion of the H-1B visas issued, according to analysis by Quartz.

H1b numbers for last 10 years show that the companies have gotten used to easy way out and stopped innovation/workflow research. Some companies are using the Global Delivery Model to add bureaucratic controls on a growth oriented industry, at the same time trying to corner the easy visa spots such as H1b for their employees at a steep discount in the open market. Numbers show that the companies have gotten used to cornering the giant share of the H1b visas for cheap labour only without concern for the research and development in this Technology oriented field and have repeatedly lost out on new technology solutions/initiatives to innovative companies from Far east and Europe. The enthusiasm to spend on newer solutions is utterly lacking in many of these offshore companies while they overenthusiastic to manage the operations in relatively well developed markets such as USA, Europe and Middle East.




Chart : Innovation benchmark not maintained by these companies

Chart : Companies with most H1b approval in 2016

Corporate Initiative and CSR

In 2008, Bill Gates spoke at the World Economic Forum about “creative capitalism.” He encouraged companies to identify their expertise- be it technology, agriculture, healthcare- and develop products that could “stretch the market forces.” A slightly more nuanced take on “doing good,” it meant honing in on the business’ specialty, not just throwing money at various charities. He has substantially invested in poorer countries in Africa, Asia and America and demonstrated effectiveness of technology in solving social and subsistence problems of the people.

However offshore companies don't do anything like that. Some of the companies such as Wipro and Infosys have announced investment in foundations and also claim to partake in philanthropic activities aimed at poverty reduction. We have in the Satyam saga how the owner tried to claim philanthropic activity in rural health care while trying to gain a share in corporate healthcare while paying only peanuts for the ambulatory services. These companies seem to heed no advice and drift in the direction of self destruction without taking any note of the leadership provided by the technology leaders such as Bill Gates. Taking out huge amount of money from H1b visas without proper direction will stall IT growth and it might take decades to correct the mistakes. This is creating a serious, significant issue for governments of India with a heavy reliance on its workers providing outsourcing services for Western enterprises. None of the companies are addressing the situation here nor they are doing any thing to develop new age technology leaders that can steer the companies to higher grounds. These companies are not investing on soft skills such as Humanities, Reskilling, Basic Sciences and most of the time are relying on government dole in those areas.

Class problems


The upper middle class urban elite that control the management in majority of these IT firms are mostly interested in skimming money using cheap labour on H1b and B1 visa, while they want to make use every dole provided by the government in Humanities development, Basic science development, poverty elimination in lower classes etc... These management people have proved to be real corporate chameleons by being on the top of the job market and have successfully jumped between MNCs and Offshore companies with ease. At the same time the lower middle class dominated programmers and analyst have lost jobs in thousands due to lack of proper leadership in IT field. In long run this will create major class problems if not addressed now. Over the decades these executives have bested the art of creating cheap pyramid schemes and clever head hunting tactics with utter disregard for overall social vision of the programming community. Many of these IT executives have a scant regard for the rules of the country and most of the time tried to aggressively play the international game in politically volatile countries such as Latin america, Africa and Middle east. Once the IT hayride is over these tactics will start coming back to the original perpetrators in future. These issues might provide a big headache to the IT governance at the government level in near future.







These p
eople are further dividing the line between haves and have-not and are also not acknowledging the government schemes that contributed to their development initially. The burden on governments in developing coherent strategy will be immense in coming years to address the ever increase skew in income categories when compared to the rest of the world.

References


  • The silent crisis: Why Indian IT engineers are staring at a future of no jobs, Madhuchanda Dey Moneycontrol Research
  • Artificial Intelligence and the Death of Indian IT Sector, Harpreet Singh

Tuesday, June 13, 2017

Consumerism and Frauds in IT field

Consumerism and Frauds in the IT field


Introduction

During the initial years of Westernization of Indians, many intellectuals saw the world as an undivided humanity that knows no barrier or religion, race, class, and nationality (Datta, 2003). Enduring many invasions through ages, the Indian had a broad and inclusive concept of world that emphasized amongst so many religions what we had was one among many religion. Rabindranath Tagore, the Nobel Laureate in Literature from Bengal, captured this essential oneness of mankind and visualized a universal man in Indian philosophy in his famous Nobel-winning Gitanjali:

"When one knows thee, then alien there in none,
Then no door is shut. Oh, grant me my prayer that
I may never lose the bliss of the touch of the one
In the play of the many."

Neo-liberal Mafia

Off late due to increased westernization from 80's, many religious gurus are professing faith in neo-liberalism that includes market fundamentalism, consumerism, welfare retrenchment, and liberal governance, away from Gandhi's idea of Hindu economics. These revivalist gurus are professing a mix of economic efficiency, ambitious individualism beyond the traditional Hindu society, selfish narcissism, acquisitiveness and excessive materialism for their followers that are taking over the traditional Hindu ethos of toleration and equilibrium in public life. This new culture is feeding the consumer culture and exploiting the traditional Hindu ethos for the sake of new technocratic global-consumer middle class concentrated in few cities.
The Indian people had firsthand experience of this new naked commercialization where huge amounts of money was lost in the bubble busts after bull runs aided by mass hysteria without taking the operating P/E of the sectors into consideration. The new consumer class that is getting  huge flows of capital from West, when examined closely, appear both self-centered and riven by paradoxes, seeking validation for their lives from Hindu evangelist gurus even as they acquire the latest consumer gadgets. At the same time this group hasn't taken the mantle of leadership in religion-socio-economic development, and when compared to similar groups in China or Japan or Korea, they have a  reputation for creating chaos and confusion. (Deb)


This dichotomy in daily ethos among these new adherents of the urban revivalist agenda has created vast number of problems for an average Indian. The neo-liberal professors of this movement such as Subramanya Swamy have paid a nominal lip service to the vast population groups in the country while vocally professing their god given rights for the unbridled consumerism that has sees no responsibility. Some of these new jingoist adherents have identified a caste-superiority based logic in placid Hindu society that legitimizes their dominant position in High-Technology directorships, in Corporate world, in Faculty positions and in Government positions . Researchers have found that the vast masses at the base of the Indian economic pyramid are also affected by the spread of consumer culture. “Increasing desires to consume branded goods that are advertised through television is …a consistent and recurring theme.” Moreover, “intertwined cultural processes of conspicuous consumption, normative change [imposing a link between consumer goods and morality], and [interpersonal] competition” mark narratives of low caste Indian consumers. They reflect an increasingly consumerist content of Indian media that depicts the mythic lifestyles of the rich and famous. (Belk, 2008)

Satyam Scam


For example, during the High technology growth of Hyderabad in 2000's, this new revivalist mafia tried to hijack the technology growth for their own selfish purpose while locking the vast sections of the population in their flawed pyramid of the new-liberal agenda. The case of Satyam computers highlight the nefarious potential of loose-canons that would burst the high-technology growth (only among Indians). The fraud committed by the founders of Satyam is a testament to the fact that “the science of conduct” is swayed in large by neo-liberal agenda, ambition/greed, and hunger for power, money, fame and glory. Satyam fraud spurred the government of India to tighten CG norms to prevent recurrence of similar frauds in the near future. The government took prompt actions to protect the interest of the investors and safeguard the credibility of India and the nation’s image across the world. If the government didn't take action in time the scandal had the potential to spiral into mass hysteria that would have jeopardized the entire IT sector that employed 2.5 million people around that 2009.

Satyam fraud details


From being India’s IT “crown jewel” and the country’s “fourth largest” company with high-profile customers, the outsourcing firm Satyam Computers has become embroiled in the nation’s biggest corporate scam in living memory (Bhasin, 2009)

Satyam ownership model was flawed from the perspective of good corporate governance. There may be three factors responsible for this. The factors are not the causes of global and colossal fraud, but they provide an enabling environment for abuse and delusion.

1. First, being a publicly owned company, Satyam could raise capital inexpensively if its existing shareholders assigned it a high value. Hence, in order to attract capital from public, it was under pressure to overstate profits to keep the company’s bonds and equities in high esteem. The promoters formed informal partnerships with this neo-liberal mafia all over the world targeting the Hindu temples, Christian and Muslim groups to develop a profitable relationship in the High-Technology sector based on false promises.
 2. Second, the promoter of the company, Mr. B. Ramalinga Raju, owned a very small fraction of the ownership stock. He diluted his holding from 25.6 % in 2001 to 3.6 % in 2009. He could overstate profits with the objective of influencing other shareholders. This ensured that the whole operation was risk free for the Owners in case of volatility in the IT sector.
3. Third important factor for flawed ownership model may be, Satyam could preserve its fictitious profits without having to pay big taxes because its profits were protected significantly from the normal tax laws. They do not pay taxes on fictitious revenues and 22 profits. There are no penalties. The belief that exempting firms such as Satyam from service tax and corporate income tax will make them competitive is a little ridiculous. Satyam would not have overstated its revenues and profits if it had to back both with real cash. A big part of the blame for the colossal fraud thus belongs to India’s trade and fiscal policy makers who gave an uneven advantage to the neo-liberal technology mafia while ignoring the basic fundamentals of the High technology and its impact on the vast reaches of the population.




The owners maintained a consumer relation with the neo-liberal mafia over the period of 2 decades and won numerous corporate awards all recommended by this mafia. In 2007, Ernst & Young awarded Mr. Raju with the ‘Entrepreneur of the Year’ award. On April 14, 2008, Satyam won awards from MZ Consult’s for being a ‘leader in India in CG and accountability’. In September 2008, the World Council for Corporate Governance awarded Satyam with the ‘Global Peacock Award’ for global excellence in corporate accountability”. The company provided vast sums of money to this neo-liberal mafia by funding many higher education institutes such as IIIT, CCMB etc... thereby ensuring and addicting to consumerism the placid Hindu masses.

The promoters successfully cashed out of the company in an immoral relationship with the neo-liberal mafia over the period of 10 years. The cashed money was used in funding the real-estate companies and the socio-educational entities that would support this neo-liberal agenda and in future lay the foundations of the political takeover of the State governments. The owners were successful in creating a huge network of bogus companies that catered to this neo-liberals while systematically subjugating the vast populations to the consumerism.  The owners of Satyam in an unethical relationship with this neo-liberal mafia wrongfully tried to influence fiscal and monetary policy of the Southern States by systematically taking over the social, agricultural, financial, educational, governmental, and meteorological aspects of the morbid agrarian population using an aggressive socio-economic agenda that created a new ecosystem of these fraud companies. The idea was to take over the top positions in the corporate, financial, judicial, religious and political ecosphere of this new ecosystem.



The government acted swiftly by arresting numerous managers for Income Tax evasion and the directors on numerous criminal charges. However the promoters of Satyam were able to show accounting fraud and go to prison while the neo-liberal mafia behind the company is free.

Requirement for newer controls

However this episode highlights the lack of controls at the government level on managing the IT growth and the neo-liberal mafia. The neo-liberal mafia was successful in promoting Mr. Raju as the poster boy of IT revolution and got an international audience with likes of Bill Gates, Bill Clinton, Hillary Clinton etc.. and subsequently benefited in the western countries such as United States and Canada by monopolizing many jobs in number of sectors.

The limits and responsibilities of operating a IT company catering to rich western clients were not defined properly in the existing company law. This is high-time the bureaucrats open their eye to this new pyramid scheme wrecking havoc on the age-old society in India. There should be harsher criminal punishments for people caught manipulating socio-political-economic environment for selfish greed.

Works Cited

Belk, V. a. (2008). Weaving a web: subaltern consumers, rising consumer culture, and television. Sage.
Bhasin, M. L. (2009). Creative Accounting Practices at Satyam Computers. Creative Commons Attribution 4.0 .
Datta, S. (2003). W (h) ither Indian Mind . IJT.
Deb, S. The Nation


Sunday, June 11, 2017

Farmer suicides and agrarian crisis in developing countries

Indian agriculture has been grappling with loss-making propositions like fragmented land holdings, depleting water table levels, deteriorating soil quality, skyrocketing input costs and low yields. Haunted by debt, small and marginal farmers are committing suicide: without credible collateral for loans from public sector lending institutions, they are forced to borrow money at exorbitant rates from moneylenders. Tragically, as India rises to the top slot among global economies, the number of farmers killing themselves every year is rising. In 2015, over 13,000 farmers took their lives. Maharashtra topped the list with 433 deaths, followed by Karnataka (1,569), Madhya Pradesh (13,000), Tamil Nadu (606) and Rajasthan (373).



The Indian farmer, once a rallying election symbol for many political parties, has lost his clout and voice with the political establishment. He is the orphan of growth in an elitist mindset. His voice is drowned in the coveting cacophony of pro-market lobbyists who have captured all levers of the establishment. Ministers, top civil servants and opinion makers rub shoulders at seminars organised by CII, FICCI, ASSOCHAM and foreign-funded economic think tanks, where they wax eloquent about corporate concessions while recommending withdrawal of subsidies for the poor.




published by Indian Express column by Prabhu Chawla
http://www.newindianexpress.com/prabhu-chawla/column/2017/jun/11/to-redeem-rural-india-in-lament-destroy-the-elitist-mindset-of-pro-corporate-politics-1615234.html
prabhuchawla@ newindianexpress.com

Consumerism and decline of the Throw-away Society

We’ve got kind of a problem here. On the right side of the pendulum, consumerism has reached an all-time high, with products reaching their ...