Goldman Sachs Group Inc.’s forecast that Brazil, Russia, India and China would eventually eclipse the Group of Seven countries economically has been described as “the biggest market call of the decade.” ... stocks in the so-called BRIC countries have risen more than emerging markets as a group since Nov. 30, 2001 ... Jim O’Neill, who still runs the global team, first made the case for the four countries in a paper entitled “Building Better Global Economic BRICs.” Brazil is the best-performing BRIC stock market since November 2001 ... India, China and Russia followed, in that order. Each of them rose more than the emerging-market gauge.
This is not very surprising, and it is only a matter of time before they cement their positions in the top 5 economies in the world.
Separately, in a reversal of traditional roles, Bloomberg also reports that Indian companies are now creating jobs for Americans:
Tata has hired some 250 graduates of Ohio State University, the University of Cincinnati, and other nearby schools. Soon the facility may employ as many as 1,000 Americans doing back-office and technology outsourcing for U.S. health-care companies and local governments.
Dallas, Atlanta, Minneapolis, and Tallahassee have all been actively courting Indian tech outfits. Wipro Technologies in March inaugurated a center in Atlanta, which now has 350 employees-nearly 300 of them Americans, including senior managers recruited from U.S. tech rivals. Infosys Technologies, meanwhile, is planning an operation in Dallas, to target some of the $52 billion the U.S. government will spend on outsourcing work just in 2010. American facilities are unlikely to create huge numbers of new jobs in the U.S. soon. For several years, at least, the vast majority of work will continue to be done in India and other low-cost countries...
This is an interesting development because these companies have been so profitable primarily because of labour arbitrage (Indian engineers could be hired for a fraction of the salary demanded by Americans). Over time, wages have skyrocketed in India causing a serious dent in profit margins. Indian tech companies have also had to endure significant churn in their workforces (especially at mid and high tiers) because the small talent pool was being chased by many players. As if all this is not enough, the cost of living in some Indian cities is now on par with major western cities. So, the tide may well turn soon as these companies switch from labour arbitrage-based business models to more lucrative, and hence more competitive, areas requiring a bigger presence in America.