Rattled by the growing dominance of India and China ('Chindia' to Asia watchers), British business leaders have said they are not ready to face the challenge posed by the giant Asian economies.
At a recent Confederation of British Industry conference, business leaders were polled on the Asian 'threat'. As many as 26 per cent said India was a concern; 61 per cent felt threatened by China; 80 per cent said British business is not ready to face the challenge.
Globalisation was a key issue at the conference at which Prime Minister Tony Blair was also present. "We see, for the first time, true globalisation… in terms of a shift of economic power from the West to the East," said Sir Martin Sorrell, chief executive of advertising giant WPP.
Chancellor of the Exchequer Gordon Brown, expected to be the next prime minister, has for a while been voicing fears of British businesses being bruised by India and China. In his pre-budget speech last week, Brown said: "Once responsible for just one-eighth of the world's growth, China and India will soon capture almost half. Increasingly, they are competing not just on low cost but on high skills."
The low-cost operations have been responsible for the staggering number of companies — among them British Telecom, British Rail, insurance giant Aviva, British Airways and top banks like Lloyds TSB and Barclays — that have outsourced services to India in the past few years and sent shockwaves through the British workforce.
Supermarket chain Tesco plans to have 2,000 employees by the end of 2007 in its Tesco Hindustan centre in Bangalore. Intelenet Global Services, an HDFC-Barclays joint venture headquartered in Mumbai, has over 9,500 employees across India.
But more and more, the availability and the talent of the educated, English-literate workforce from India (and indeed China) are beginning to worry politicians, policy-makers and business leaders in the UK.
Brown said that "while every year Britain adds 75,000 engineers and computer scientists, India and China add half a million; while annually Britain turns out a quarter of a million graduates, India and China now graduate four million."
The warning signs have been coming for a while now. In 2000, Tata took over Tetley Tea, the iconic British brand and the inventor of the teabag. And the Tata Indica, re-branded as the CityRover (that most quintessential of British cars), hit London streets in 2003.
But this is for the first time that the threat has been discussed so widely — and so openly — at a forum as important as this.