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Intellectual Property and Outsourcing Risk in India- Gordon Housworth [ 11/2/2007 - 15:25 ] #
My presentation, Intellectual Property and Outsourcing Risk in India, given to GlobalAutoIndustry's "India: Leading Offshoring Center or Upcoming Manufacturing Power?" on 1 November, 2007, described India's uniqueness which separates it from other outsourcing and manufacturing regions:
Long-term readers of this weblog will not be surprised at the conclusions and their time horizons. This speaking request did, however, prompt a revisiting of previous Indian outsourcing, IP and counterterrorism projections. As an aside, I recommend frequent revisiting of projections; it's often humbling but embarrassment is preferable to an opponent's bullet:
I found the Indian projections holding true and the risks rising as the target environment we've identified becomes irresistible. Consider this 30 October item on Cisco's plan to treble its manning level in India and place a third of its senior executives in its Globalisation Centre East campus in Bangalore by 2012:
As prodigious as the Indian security apparatus is, I do not believe that it can scale to the growth and dispersal distribution of the target sets. Bangalore is perhaps the prime example of a city rapidly expanding its satellite nodes to offset rampant congestion. Tyler Cowen flagged it nicely in 2004 and it has not improved:
The presentation proceeded to encapsulate topics such as:
India's "al Qaeda" - Lashkar-e-Toiba (LeT) Lashkar-e-Toiba (LeT), The Army of the Pure, is India's al Qaeda or Hezbollah. Were it not restrained by prodigious efforts by the Indian security apparatus, this Pakistani jihadist group would endeavor to destabilize the Indian state as its ultimate goals go beyond regaining Muslim control of Jammu and Kashmir to nothing less than reestablishing Islamic governance of India, forming a Muslim bloc with other predominantly Muslim states surrounding Pakistan. The presentation proceeds to outline LeT's attack opportunities which I have come to call the "Two Twofers." The two "twofers"
"Twofer" rose in American English at the close of the nineteenth century as a term for "two for the price of one" or more generally an "arrangement in which a single expense yields a dual return." LeT has recognized that India presents it with two "twofers": In the first, LeT has recognized that attacks on outsourcers on Indian soil directly damages the Indian state and its economic capacity, while it opens the potential of striking US and European firms that would nominally be out of its reach. In the second, what I call the "embedded twofer," an attack on a US or European data center or business process outsourcing (BPO) facility offers the potential of interrupting all the customers of the BPO/data center owner, e.g., attack a bank's data center or BPO unit and you impact all the bank's customers. Forecasting LeT's attack progression Extending the "twofer" concept, we forecast this attack progression (2005):
The former is almost all soft targets - gatherings of personnel. The latter two target groups can cause supply chain disruptions as well as personnel loses. While I called the attack on the Indian Institute of Science (IISc) in Bangalore (2005) as the first iconic or symbolic target attacked by the LeT, outsourcers and their clients should not overlook LeT's 2001 suicide attack on the Indian parliament. Had it not been chance in a missed cellphone surveillance tip and two road collisions, LeT might well have decimated Parliament House and its occupants. But far worse in my estimation was the effective failure of the western press to cover an Indian disaster that did not include large number of US/EU national casualties. I am speaking of the 2006 LeT attack on first class passenger trains in Mumbai that followed the IISc attack. More than 200 dead in an attack that was the equivalent of an assault on Manhattan or London. Indians companies must have been relieved at our appalling myopia as little or no damage control was required:
The risks in India are both real and unfamiliar to many US/EU nationals. The only approach that does not carry a charge of fiduciary breach is to conduct a rigorous vulnerability assessment, then implement the appropriate risk mediation interventions for personnel, facilities, data and IP. While the presentation can be considered an executive overview, readers are referred here for a deeper dive:
Cisco to have a fifth of its top executives in India At least 174 killed in Indian train blasts Outsourcing Bangalore Indian parliament attack 'bungled' Gordon Housworth InfoT Public Infrastructure Defense Public Intellectual Property Theft Public Risk Containment and Pricing Public Strategic Risk Public Terrorism Public |
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