eCharcha.Com   Support eCharcha.Com. Click on sponsor ad to shop online!

Advertise Here

Go Back   eCharcha.Com > Current Affairs > Economy

Notices

Economy Fiscally fit?

Reply
 
Thread Tools Display Modes
  #1  
Old May 18th, 2009, 11:29 AM
echarcha's Avatar
echarcha echarcha is offline
Sutradhar {admin}
 
Join Date: Jul 2000
Location: CA, USA
Posts: 44,951
echarcha has a reputation beyond reputeecharcha has a reputation beyond reputeecharcha has a reputation beyond reputeecharcha has a reputation beyond reputeecharcha has a reputation beyond reputeecharcha has a reputation beyond reputeecharcha has a reputation beyond reputeecharcha has a reputation beyond reputeecharcha has a reputation beyond reputeecharcha has a reputation beyond reputeecharcha has a reputation beyond repute
Lightbulb Microsoft chief Steve Ballmer on the economy and H1B visas

Here is an interesting interview with Microsoft chief Steve Ballmer on the economy and the H1B visa situation.

Quote:

There's no recession, it's a reset for the economy: Steve Ballmer
13 May 2009, 0404 hrs IST, Pankaj Mishra & Bodhisatva Ganguli, ET Bureau
There’s little exaggeration in calling Steve Ballmer, along with the iconic Bill Gates, one of the creaters of the modern IT industry. Mr
Ballmer, who has been the company’s CEO since January 2000, now has the daunting task of conquering new frontiers such as the markets for search and the software which runs mobile phones. Having missed out on acquiring Yahoo for competing better with search rival Google, Microsoft is now preparing to enhance its Internet search offerings by exploring joint innovation with Yahoo, and investing more in developing newer features for wooing Google users and advertisers. In an interview with ET, the only Indian publication he spoke to during a three-day trip, Mr Ballmer says his company will leverage engineering talent available in countries such as India in order to fuel the company’s growth. Mr Ballmer also shared his thoughts on a wide range of topics including the impact of the global meltdown and the role of government.


Do you think that the role of government, especially in the banking and financial services sector, has increased?

Two things happened last fall — number one, we had a credit crunch and number two, we saw a change in government (in the US). The conventional view is that the Democratic party prefers a more active government role in many ways than the Republican party. Certainly the government has been more involved, but part of that is because of change in government, part of that is a once-in-a-lifetime, unique economic circumstance. I don’t draw any grand generalisation about change, and what to expect. I think we are in very unique times.

I would say probably that’s fair (to say that banking would see greater government intervention). At the end of the day, banking and finance is a regulated industry, certainly in the US. It’s a natural thing for government then to occasionally play a more expanded role and we all know these are incredibly unique times.

Because of the trend of greater government involvement, do you see more anti-trust actions against companies, trying to see if companies have become more dominant? Or has it always been there?

It’s always been there — I think we have had our turn mostly, I think other companies may get their turn in our industry, we will see — that’s up to the regulator. But I would not expect to see trust review, at least in the US, change significantly because of the economic situation. I think at least in the US, this is more a blip in time than a massive shift, whether it’s anti-trust, or regulatory involvement in the industry. That’s how I tend to think about it but certainly if you look back historically — post the Great Depression, there were programmes put in place that expanded the role of government. They didn’t necessarily expand the role of government in business but certainly the state’s role grew. We have to look back at history. Right now, though, I think it’s a blip.




When do you see the recession ending?

Well I actually don’t think we are in a recession — I don’t use that word and I say it’s a reset. Recession some times implies going down, and coming up. I think this is a situation where the economy got to an unsustainable level based upon too high a level of borrowing, particularly by business and private individuals, and it’s sort of like all of that air has to come out and it takes a while. And the government in some sense does not want it to come up too fast because there is too much societal pain if it all comes out. So, this stimulus in some sense is designed to let air out more slowly. Instead of being over quickly, it may take longer to get over, but it’ll be less painful, which I respect. So I don’t know if it will be fully reset for another year, two years. At that point, we will get that GDP growth. GDP growth comes from four sources — population growth, productivity, innovation and debt. Too much of economic growth in the last 10 or 15 years has been from debt. Once we reset, I think the only sources of GDP growth will be productivity and innovation, and some from population.

Just in the US before this reset, private debt owned by businesses and consumers was 300% of GDP, it was 150% before the Depression in 1929. Financial markets are more sophisticated now, but you can argue that we have about one GDP worth of excess money floating around that needs to come out of the system.

Which sectors do you see rebounding earlier?

Things which are more discretionary and have a greater price need to rebound the most. If you take a look at fast moving consumer goods, those have not been hit much. It’s the expensive and discretionary spend that has been hit more. On the business side, among things most hit are overall employment levels and capital spend. But the way things work in most developed markets, IT accounts for almost half of the capital spend. You think about capital spend in banks, telecom — it’s all about IT. IT spend will come back. I think employment will take longer to come back because people are faster to shed employees than they are to bring them back.

Do you see Japan’s recent history repeating itself in the US, looking at what happened during last decade?

I hope not. Ask an economist, I am not one. The way it’s explained to me is that the Japanese did not confront some of the problems during the past decade. And then when they did, they did some unusual things. I am sure economists in US universities have studied that phenomenon, but everybody is also trying to avoid too much social pain. I hope that (a repeat of Japan) does not happen. It’s not good for any-body to have stagnation in the world’s largest economy.




What are your thoughts about H1B restrictions being imposed by the US?

The US has benefited tremendously by having talented people wanting to move there — I think that’s been an asset to the US compared to any other country. The US has been a net importer, and not a net ex-porter, of talent; very few countries can say they are net importers of talent. The US education system teaches many people (who are not US citizens) and if they want to stay and work in the US, I think it’s a good thing. At Microsoft, we are going to compete for the best and the brightest globally. If the US government allows us we will have those people work in the United States and if the government does not allow us, we are prepared to have those people work for us elsewhere. Whether it’s here in India, or China. We opened a development lab in Vancouver, Canada because we could not get visas for everybody, and the Canadians were willing to give visas.

The key for us is to have the best talent. 55% of the world’s computer science graduates now come from India and China, while 20% or 25% are US citizens. If you want the best and the brightest you can’t re-strict yourself to 20-25% of the pool. We are going to continue to try and get visas for people, but we are going to hire the best and employ them at some place, one way or the other.

If there is a choice, we hire a smart person. If we have them work in a country other than the US, there’s no job created in the US. Even if we hire that same smart person who is not a US citizen, they create jobs — if it’s a programmer, we need a tester, and there are a whole lot of support services around that. I very much believe the US should be open to what we call high-skilled talent.

It does get complicated in the US because of broader immigration is-sues, particularly immigration from Mexico. The two — visas for skilled workers and illegal immigrants — have nothing to do with each other, but politically, they probably need to be addressed together. We are certainly prepared to participate in a discussion for a broader immigration reform, which allows us to bring in high-tech talent. Now, of course, I am biased because my father was an immigrant to the US — so without visas, I would not be born! So I believe in immigration.

What about President Barack Obama’s plans to tax overseas earnings of American companies in order to create more local jobs?

First of all, there is no real detailed tax proposal, so it’s premature to have a detailed point of view. At the end of the day, the government can raise taxes. The US already has one of the highest corporate tax rates in the world, and part of the current tax regime in the US is de-signed to help US companies be competitive in countries outside the US which have lower tax rates. So, I think US government is going to be thoughtful about that because there are unintended consequences — will their actions create jobs in the US, or will they tend to drive even more jobs out of the US? In general, business is saying this is not a good thing. My initial reaction is probably like most of the other businesses, (but) I reserve judgement until I see the specifics.




Also, the tax issue is not linked to protectionism. Right now, the US government has said, ‘we are going to respect the jurisdictions outside, as long as you do not bring money to the US.’ The discussion is very complicated, and until it’s fleshed through, it would be difficult to comment. But it’s not really protectionism as much as it is about trying to decide the jurisdiction; and it would actually give us incentives in some cases to move jobs out of the US, which I don’t think is the intent of the proposal.

Has Microsoft missed out on search innovation? You did try to create a stronger rival by attempting to acquire Yahoo, but that did not materialise?

Google has done a great job — they have built a great business, they are dominant, regulators can decide what that means. The question is: Will they face any competition, and will the search market be an area of high or low innovation? The level of innovation in any category is high when there is competition. We have competition from this funny thing called Linux, which does not even require it to be successful. We have the best and the worst of competition — we have a competitor that’s going to keep competing whether it’s successful or not because it does not require financial resources, it’s keeping our prices down.

So are there innovations to be done in search, and the answer is clearly yes. I can’t speak for Indian languages, but in English, the average search query is 2.2 words because people have learnt that if you type longer queries, you get worse answers. Is there an opportunity for innovation here? I think so. Almost half of all queries never answer somebody’s questions — so 50% of the time you don’t get what you are looking for — that’s interesting. The material that people are looking for on the internet gets broader every day, so the opportunity to be dynamic is quite large. We also think there is a lot of opportunity to invent in business models. Google did a great job of inventing a business model, but is it always going to stay the same?

Unfortunately, search is a game where being in it, it’s expensive to open the door — you have to be willing to invest in R&D to scan billions of documents on the internet. It’s not cheap, it’s like competing with Boeing in the airplane business. You can’t be a little start up.

In most businesses, the number two guy does have more flexibilities. We are in the game, we are going to compete, it’s going to cost us money. We certainly need to have innovation capability ourselves to go and get this done. We are not counting on Yahoo.
Now, with that said, there would be advantages in the quality of our product not because of technical reasons but business reasons. We and Yahoo together will be stronger. Everybody who advertises on Google in the US and elsewhere, would like to advertise on a combination of Yahoo and Microsoft. So there are some advantages. We are not going to acquire them — but are open to working together.

How do you look at India as a market?

We categorise the market in three segments — the affluent class of around 150 million people, the emerging middle class and the rest. At 150 million, you are talking about half the size of the US. The middle class presents interesting innovation opportunities because they tend to want an all-in-one solution. For revenue opportunities, the affluent segment is going to be number one, almost forever. The rest of India does not look different from the rest of China. I think of it as less country specific and more like an economic pyramid.




LINK
__________________
eCharcha.com
-Loud and Proud Desi Opinions
Reply With Quote
Reply

Bookmarks

Tags
economic downturn, h1b, h1b visa, microsoft


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
Ballmer Says Tax Would Move Microsoft Jobs Offshore echarcha Economy 5 February 6th, 2011 12:18 PM
Senator asks Microsoft about job cuts, visas natkhat Jobs 15 January 27th, 2009 12:59 PM
While Indians moan about US visas, India denies visas to US students! echarcha Visitor visas 3 March 6th, 2007 09:06 PM
Send hate mail to Steve Bucknor !!! nayasavera Sports 12 March 20th, 2005 10:07 AM
y steve jobs named his company APPLE compukid Taaza Khabar - Current news 0 June 4th, 2003 12:36 PM


All times are GMT -7. The time now is 08:45 PM.


Powered by vBulletin® Version 3.7.2
Copyright ©2000 - 2017, Jelsoft Enterprises Ltd.
Site Copyright © eCharcha.Com 2000-2012.