When Wim Elfrink told friends he was being transferred to Cisco Systems Inc.’s globalization centre in Bangalore, India, the general attitude seemed to be: “What you do to deserve this?”
That was in October of 2007, and the perception of Indian operations of multinational companies was that it was a source of cheap labour and call centres. “That’s still the perception a lot of people have,” Elfrink, executive vice-president of Cisco Services and chief globalization officer, said on the anniversary of the centre.
In the ‘80s, India was a source for global manufacturing; in the ‘90s, global R&D started moving there. “But it was always cost-of-labour arbitrage based,” Elfrink said.
Cisco began looking at the emerging world differently only a few years ago. It isn’t about outsourcing business functions, Elfrink said, but about globalizing the company brain. “It’s what you have to do to be credible” in emerging markets, he said.
With huge demographic changes coming in the next few decades, credibility in those markets is vital. Half a billion people will be urbanized in the next five years. The middle class and its buying power are expanding.
“Europe is shrinking. America is aging. Even China is aging with the one-child policy,” he said.
“We don’t primarily look at cost of labour,” he says. “We still see it as a bonus, don’t get me wrong.” But the key issues, according to Elfrink, are: Where is the growth? Where is the innovation? Where is the talent?
In this video, Elfrink’s chief of staff, Syed Hoda, discusses the history, evolution and future of globalization in an Indian context.