The current crisis has re-aligned the world. Has taken the world back to "what Grandma told you". B-schools have lost their usual Recruiters. Wonder what would it be at IIM's to know that Merrill Lynch and Lehman is no more gonna recruit.
The current crisis has thrown it's fair share of benefits. The most important of all is Risk Assessment. Not the risks not associated with Asset prices, credit etc.
It's led to a re-assessment amongst individuals, amongst my generation that had it fairly good. To whom the word "savings" seemed a euphemism. During my initial stints post college I wondered how certain expenditures were tolerated amongst our circles given the fact that our incomes were the same. Individuals who would earn Rs 15,000 pm but own a Rs 20,000 cell phone. As for me Rs 20,000 meant several months of fixed expenditure on phone bills, maintenance, food bills, investments(and the losses that come with it). Most were passive about these concerns.
Savings were never a concern. Expenditure and life on plastic was a norm.
The worst hit in the re-assessment are those in the ITES sector especially one in BPO's. Jobs are at stake everywhere. The problem lies more with the adjustment to lifestyle changes. To me it's good as a sense of arrogance and nonchalance has slowly made way for humility.
The Crisis has restored some Sanity. Extravagance is out, and rationality is in. A rude awakening to the Batmen, as I call them (given that they work only at night). A lifestyle that's lived on leverage, on excesses. The tunes Rock On! have been silenced to some meditative ones to cope with the crisis.
Most have gone back to basics. PSU's have emerged are the most sought after recruiters today. Here the point is not about whether PSU's are better at utilising the resources as compared to their Private counterparts. The larger point is about traditional sectors or what is otherwise known as Old-Economy seeing some talent inflow albeit temporary. Heavy engineering and FMCG are other neglected sectors that have seen interest.
Economies Re-align as they grow so it's always a good chance that manufacturing may not remain so hot. In India its the services sector that has propelled growth. And unlike in the past where it was imperative to have a dominant industrial base that theory will not hold longer.
Industrial revolution was built on the fact that it created huge employment which means money went into the pockets of consumer. Today most manufacturing is automated and is more capital intensive than labour. So services substitute the role of spurring growth as they generate substantial employment. And the services then create their own set of implicit demands.
The problems with the IT sector should be seen as a blessing in disguise. Yup I'm all for labour to be determined by market forces than national service. But found it terrible that Aeronautical engineers landed up at Oracle. Metallurgy grads were mining software systems and best of all, was the telecom lot that was actually attending calls.
Most countries in the past or that have been historically power full have always been superior in technology, in indigenous science. Be it the Romans, Russians and present day US. Technology and the incentive towards research is an important factor in any nation's development. And yes quality of labour force at the right places and to incentivize them is crucial.
In this era where probably 3 years of economic growth has been lost. It's pays to invest to the basic sectors such as science and infrastructure. Not in education. I'll tackle it later.
Second it also opens up issue on FDI. I'm not a communist but surely capital flow theories that are essentailly decided by John Thain and his kin need to be seen carefully. The stability of banks for ex. is a crucial point. In India thankfully PSU banks or our banking system is a trusted source. Therefore it would pay that banks end up being just what they are..banks!!! Any leverage towards areas such a private equity should be completely de-risked.