The on going recession and need to cut cost has forced Small and Medium Businesses (SMBs) to start looking to set up their base in India.

After the first wave of the large-cap multinationals, it is the turn of the small and medium enterprises (SMEs) ranging in size of US$100- $500 million from these two continents to step into India. Some of these companies are family-owned.

Some of these companies are in the area of technology, clinical research, auto design and ancillary and pharmaceutical sectors

Other sectors that could be part of this trend are aerospace, pneumatics, banking and financial services, machine tools, industrial designing, retail, logistics, web services and content generation.

According to recent survey done by a major recruitment company in India about one-third of the SMEs in Europe and the US are now turning to India and China

These companies are looking at value-added off shoring from these locations as well as to be closer to the customer and because of the stringent labor laws in Europe.

This development will heat up the talent search market in India and will provide job seekers with new avenues of growth

According to Mr. Aroon Raman, Chairman-CII Karnataka State Council, European SMEs, faced with a stagnant market in their home countries, are turning towards India and China, where there is promise of 8-10 per cent growth. Besides this, companies reap the benefit of high-quality labor and cost advantage at these places.

Key Challenges: One of the key challenges for SMBs trying to set up base in countries like India and China is lack of brand power pull as talented people in these countries still prefer to work for bigger Multinational Brand names. Besides this the rising cost of renting out real estate cost combined with rupee getting stronger against front line currencies will lower the cost savings for these companies.

Another issue is a sharp wage inflation coupled with poor basic infrastructure in India which can trip off a lot of these companies trying to set up base in India.

In China the language and cultural barriers coupled with unpredictable govt. policies lead to business uncertainty which can be fatal for the SMEs.

It’s become a familiar story as business tries to find it’s footing in a struggling economy a bit of good news wrapped in a lot of bad news.

European production fell nearly 19 percent, but at least it was less than the month-to-month drop predicted by economists, according to this April 16 report in SME Times of India,

European industrial production plunged by an annual 18.4 percent in February, according to data released earlier in the month, the SME Times said, a sign the global recession was worsening.

The silver lining was that the European Union’s (EU) statistics office, Eurostat, said the month-on-month February fall was less than the 2.7 percent drop predicted.

Other statistics released include notes on inflation, which came in under expectations in March as food and fuel costs eased.

SME Times said the ongoing weakness and inflation issues would to help strengthen the case for the European Central Bank to deliver another rate cut next month.

In other news, industrial production within the European Union dropped 17.5 percent.

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Using Facebook, Twitter, Flickr and YouTube to get the word out, the Pennsylvania-based nonprofit Living Beyond Breast Cancer nearly tripled the number of groups participating in its annual Yoga Unites event and doubled the amount of money raised at last year’s event.

The organization is one of many nonprofits turning to social networking sites to reach more donors and volunteers. A recent survey found that 86 percent of nonprofits are on at least one social networking site, and the majority of them have joined in the past two years.

The groups are taking a page from the Obama campaign’s playbook.  The Barack Obama team took advantage of online outreach to reach more voters and raise significant sums of money through small donations.

Some call it “friend-raising,” but social networking, in many ways, is the 21st century answer to good old-fashioned word-of-mouth fundraising.

“It’s the fastest way to get to people,” Bill Cowen, director of the public relations program at Villanova University, told the Philadephia Inquirer “In a downturned economy, it’s one of the most cost-effective means of promotion.”

Google may be the top search engine in the United States, but online advertisers may get more clicks for the buck from competitor Yahoo!
Yahoo! sites ranked top U.S. display ad publisher

in March with 42.8 billion ad views reaching 139 million people online, according to a survey by comScore, which measures digital trends.

Yahoo! captured 13.2 percent of the display ad market. Fox Interactive Media ranked second with 31.4 billion ad views (9.7 percent of the market), and social networking site Facebook.com rounded out the top three with 24.8 billion ad views (7.7 percent).

Search engine giant Google ranked sixth in the comScore survey, with 4.2 billion display ad views in March.

Phone companies AT&T, Verizon and Vonage were the top three display advertisers in March.

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It sounds like a riddle, but what do Britain’s Channel Islands Jersey and Guernsey and the tiny principality of Liechtenstein have in common?

Two words: Tax havens.

All are noted destinations for those looking to park some money off-shore, away from the watchful eye of their home country’s tax man.

But that is changing.

Off-shore tax havens are coming under increasing scrutiny and pressure as the world struggles with the global economic downturn, according to a March 29 report by The Associated Press.

They have little room to fight back.

Prince Alois of Liechtenstein agreed earlier this month to start following the rules set down by the Organization for Economic Cooperation and Development in Europe aimed at curbing tax havens, the AP said.

“We’re in the middle of a power struggle, and the big countries can do what they like,” Michael Lauber, chief executive of the Liechtenstein Bankers Association, told the wire service.

The stakes are high.

One consulting group estimated that the amount of money in off-shore accounts that is either not taxed or undertaxed exceeds $7 trillion, the AP said.

The new U.S. administration is also a source of pressure. As a senator, President Barack Obama co-sponsored legislation to crack down on havens estimated to cost the United States $100 billion annually in lost revenue, the AP said.

But one international lawyer says the best weapon might not involve heavier enforcement at all.

Gerhard Roth, a managing partner at the Swiss law firm GHR, told the AP that top tax rates as high as 50 percent like in Germany means some people feel justified in moving their money elsewhere.

The U.S. policy of using interest rates as a major economic policy tool has gone European.

An April 2 report by The Associated Press said the European Central Bank has lowered its benchmark interest rate to a record low of 1.25 percent.

The move affects 16 countries using the euro.

A quarter percentage point reduction, the move came as members of the so-called Group of 20 — the finance ministers and central bank governors of major economies — were meeting in London. The obvious main agenda item was the battered global economy.

A further rate cut is possible, the ECB’s president told the AP.

“Speaking to reporters Thursday after the ECB lowered the key rate from 1.5 percent to 1.25 percent — less than the half percentage point most analysts had expected — Jean-Claude Trichet said that the ‘main policy rate is not the lowest yet,’” the wire service said.

The global worker’s wallet is getting a little lighter.

A quarter of the world’s companies, and 40 percent in the United States, plan to freeze salaries this year, said an April 8 report by Reuters.

The data came from a survey of 53 countries by research company ECA International of London. In recession-hit Japan, half of companies plan to freeze salaries, Reuters said.

But there are bright spots. Employees in South America and India will see raises, as will employees in such countries as Lithuania and Ireland but there rises will be among the most modest.

Globally, average salaries should increase 4.7 percent this year, down from a 6.2 percent rise in 2008, the survey showed.

Lee Quane, ECA’s Asia director blamed the economic upheaval, telling Reuters: “Our results show that, globally, companies have revised their forecasts down, on average, by more than a third.”

South America seems to have the best prospects: Companies in Venezuela are set to hand out the biggest pay rises this year, averaging 24 percent and up from 22 percent last year, the report said.

In the United States, pay is expected to rise by just 2.8 percent, Reuters said, and some 40 percent of firms will freeze pay.

Salaries across the Asia-Pacific are likely to rise 4.8 percent, compared with a 6.9 percent rise last year, but a third of companies in the region will freeze salaries, the survey shows. In Western Europe that figure is just 2 percent; Eastern Europe, a 5 percent rise. Overall, 29 percent of percent of European companies plan to freeze salaries this year, the report said.

Finance officials from the world’s richest nations are willing to do whatever is ‘necessary’ to get the economy back on track, but are cool to the idea of doing so in lockstep.

Instead, the Group of 20 called on the International Monetary Fund to assess the individual government actions already taken and what more might be required, according to a March 14 Associated Press article .

Meeting in Horsham, England, the G20 did leave some other issues on the table, such as how much money, exactly, would be injected into the global economy. That may come during a much-anticipated summit of the group’s national leaders in London on April 2, the AP said.

U.S. Treasury Secretary Timothy Geithner been pushing Europe to match Washington’s $787 billion package of spending and tax cuts.
His British counterpart struck a positive note, but offered no specifics.

British Treasury chief Alistair Darling said that it was for “individual countries to decide what’s right for them.”

“They’ve got to reach a judgment as to how much they do, what effect is it having, which areas of the economy they need to support, whatever’s right for them,” Darling told the AP.

Agreement was struck on some oversight over hedge funds and a pledge emerged that “all systematically important financial institutions, markets and instruments are subject to an appropriate degree of regulation and oversight and that hedge funds or their managers are registered and disclose appropriate information to assess the risks they pose.”

According to the AP, the emerging economies of Brazil, Russia, India and China used the occasion to push for a bigger role in the International Monetary Fund.

“The final summit statement agreed that IMF governance needs to reflect the changed global economy and the growing role of developing countries,” the wire service said.

Landing your first job right out of college isn’t easy in the best of times, but in the face of the bleakest job outlook in 20 years, who can blame soon-to-be graduates for taking matters into their own hands?

All over the country, budding college entrepreneurs are starting their own businesses rather than rolling the corporate dice, Inc.com said in March 2 story.

“The good news is that it is, in some ways, a great time to start a company. Costs are coming down and established businesses face pressures that a nimble, low-cost upstart need not worry about,” Inc.com said.

And colleges have long provided a springboard for new entrepreneurs, with Dell computers as perhaps the most famous example.The company was created in a dorm room at University of Texas at Austin, Inc.com said.

At Yale, a group of students founded GXStudios in 2007, a creator of massive multiplayer online games.

“It’s one of those things I never would’ve predicted when I came to Yale,” co-founder Matthew Brimer told Inc.com. “If someone would’ve told me that, when I graduate, I’d go to work for the start-up company I founded and am working for already part time, I’m not sure I would’ve believed it.”

It’s a juggle that while hard, beats sending resume after resume to compete with legions of laid-off workers.

At the University of Houston, Danny Klam begins his day at 3 a.m. to open one of three Simply Splendid Donuts and Ice Cream stores he owns with his cousin.

“The hours are crazy,” Klam told Inc.com. “You just have to make time and get your priorities straight.”

At the University of Michigan, a student began her own T-shirt company and while successful, quickly found the two worlds can collide.

“I can tell you all the awesome things I’d like to do with the company and all the great places I think we can grow,” Caroline Rooney told Inc.com. “But at the same time, I have a 10-page paper due tomorrow.”

The World Economic Forum at Davos offered no silver lining for global economies wrecked by crisis, rejecting the belief that a “decoupled” Asia would be a moderating influence, said a Feb. 10 story in The Hindu BusinessLine .

The report also examined dire U.S. employment figures. The U.S. Bureau of Labor Statistics reported a sharp fall in non-farm employment in recent months, the report said, with a monthly decline in non-farm payroll employment touching 598,000 in January, when the unemployment rate rose from 7.2 percent to 7.6 percent.

The Hindu BusinessLine further said the global recession was clearly taking a toll on global trade. Export growth from advanced economies is projected to fall from a positive 5.9 percent in 2007 and 3.1 percent in 2008 to a negative 3.7 percent in 2009.
And Asia has not escaped unscathed.

“Developing economies in Asia, which as a group grew at 10.6 percent and 7.8 percent in 2007 and 2008, are now expected to grow at just 5.5 percent or 1.6 percentage points lower than projected as recently as November last year. Japan was already contracting by 0.3 percent in 2008, and is projected to see that figure falling to negative 2.6 percent in 2009. But the three growth engines in Asia — the Asean-5, China and India — also seem to be badly affected by the crisis,” the report said.

According to official Chinese figures, the story said, more than 20 million rural migrant workers have lost their jobs and returned to their homes as a result of the crisis. “By January 25, 15.3 percent of China’s 130 million migrant workers had lost their jobs and left coastal manufacturing centres to return home. And the aggregate figure of migrant job loss does not include those who stayed back in cities in search of new jobs,” the report said.

In India, an official Labour Bureau survey found that employment was down in eight key sectors, the report said.

“These trends in Asia are of significance because at the time when the crisis was just beginning to unfold, optimists pointed to Asia as the shock absorber that would buffer the global downturn,” the report said. “A decoupled Asia, it was argued, would through its own growth and the demands that it would make on the world’s output ensure that the financial crisis that was largely a phenomenon restricted to the developed countries would not have as damaging an effect on global growth as the pessimists, then in a minority, were predicting.”