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Tata Companies are a broad collection of global operating companies spanning consumer brands in the automotive, hotel and beverage industries right through to B2B brands operating in the IT, telecommunication and steel industries. We took a minute to sit down with Dave Ryan, Senior Vice President of the Americas Region for Tata Communications, the communications arm of the group. Dave’s U.S. role is run from Herndon, Virginia.
VEPD:Tell me about Tata Communications – how would you describe your company to someone outside your industry?
DR: Tata Communications operates a world-leading terrestrial and submarine communications network connecting over 240 countries. We have industry-leading strength and expertise in helping U.S. corporations expand globally. With our roots in the emerging markets, Tata Communications is well placed to take U.S. companies into these regions as well as to connect them to other first world territories. The United States now represents our second-largest market in terms of revenue, and our communications and data network spans 19 major cities. This backbone enables us to provide a host of managed services including video and audio conferencing, voice, VoIP, data center hosting and storage, and IT security services to a customer base that includes large multinational service providers and enterprises.
VEDP: Now that we know a little about Tata Communications, tell us about your career path; how did you end up where you are?
DR: I was actually the first U.S. employee at Tata Communications. We established a U.S. office 7 years ago, in April of 2004. I had to start the business from scratch, including finding customers, finding revenue; all the steps that go along with getting your foot in the door. I’ve been in international business for most of my career. Prior to Tata Communications, I was COO of NTT America, a Japan-based telecommunications company. I spent 4 years there. I also worked at Sprint and Global One for 16 years before that, working with overseas carriers trying to expand their business in the United States and vice versa.
VEDP: With so much experience in international business, what’s one thing you have learned and taken to heart?
DR: Dealing with different cultures helps you learn so many things – treating people the way you like to be treated, listening more, understanding what motivates the people you are working with. It’s very different dealing with global clients than Americans; you learn to respect the unique needs of others. This experience is reflected in our own corporate philosophy. Yes, Tata Companies is Indian headquartered, but we hire and recruit locally, just as we do in Europe and Asia. Not a lot of foreign companies do that. Some U.S. companies send expatriates to Europe and Asia to run things, which is not a good long term proposition. Part of the responsibility of being a global company is learning how to operate in and respect a multicultural environment.
VEDP: How do the companies under the Tata Companies umbrella work together globally? Do you share resources, technology, etc.?
DR: We all operate independently and are listed separately on international stock exchanges. However, our broad range of services and industries allows us to share a huge pool of resources. Tata Communications serves our sister hotel group, automotive and steel companies with communication services, for example, as well as running some of their data centers. We have a synergistic relationship. Central, yearly meetings help us keep track of progress.
VEDP: I read recently that you have partnered with Sprint – what is your view on corporate partnerships?
DR: One of the major goals we have at Tata Communications is to expand on our partnerships in the marketplace that provide mutual benefit for the end customer.Our recent partnership with Sprint, for example, marries Sprint’s network strength within the domestic U.S. market with our robust global network and leadership in offering global managed Telepresence, a high definition, immersive video conferencing tool.We also partner with Cisco on audio and web conferencing services, leveraging the technology capability that Cisco has with the management services and network reach of Tata Communications.
VEDP: What about differing corporate philosophies? How do they influence interaction between companies?
DR: Our basic principle is reflected in the fact that two-thirds of the equity of Tata Sons is held by philanthropic trusts which also provide aid and assistance to non-governmental organizations working in the education, healthcare and social sectors. In most businesses, shareholders are the beneficiaries; we match that with a cultural and business philosophy to work with communities where we operate. Corporate social responsibility is a very meaningful, important criteria for our business. Every employee goes through training to understand how we do business in the global marketplace. If we are going to partner with a company who will represent us, we expect attention to detail, understanding what the policies of business conduct are. There are U.S. rules and regulations that manage that and we also have our own strict code of conduct. Our partnership philosophy is that if we sign up a partner, they must execute a document that says their practices will adhere to these standards.
VEDP: I also saw that you have been planning to expand as a Cloud service provider – what does that entail?
DR: We’ve launched Cloud services in India and Singapore, and are in the planning stages for the South African, U.S. and European market launches. Our global cloud offering is geared towards the business side of the market, targeting both SME organizations as well as large enterprises [market dependent]. There are very high expectations of service levels, quality, customer support and sales coverage and we are making sure we are fully geared up and ready to support individual market needs as and when we have, and continue to, launch in new geographies.
VEDP: Now that we know a fair amount about Tata Communications, what can you tell us about Virginia? What attracted your company to do business here?
DR: Tata Communications has several offices in the U.S., and is headquartered here in Northern Virginia. This region made a perfect location because of its infrastructure, strong telecommunications and technology-intensive industry, and a vast talent pool for business, especially in new technologies. Northern Virginia is a very business friendly environment. The state is one of the most proactive in reaching out, encouraging and meeting with companies, especially global companies. For instance, China Unicom is moving into the same office complex where we are based in the Dulles Tech Corridor.
VEDP: How have the state of Virginia and organizations like VEDP helped your company?
DR: VEDP and other organizations have helped by being proactive, getting people together, providing networking events and encouraging business and partnerships. By reaching out to businesses, the state makes it clear that they want you there, that they want to and will do everything possible to give your company what it needs to succeed.
VEDP: As a closing thought, is there anything you have learned from the economic downturn with regards to business?
DR: Everybody is affected by bad times, big or small. Look at Tata Communications: doubling, quadrupling, then all of a sudden target customers are shrinking. This forces us to really focus on what we are offering, to be clear in communicating our business offerings and showing how we can help. Buying power in emerging markets is giving large US companies an opportunity to expand and grow. It becomes obvious during downtimes how important it is to look at global opportunities, and not just a domestic perspective. That’s what we are here for at Tata Communications – to give companies an outlet to the possibilities of the global business community.
American innovation and quality are in demand in markets the world over. In 2010, Virginia companies exported over $17 billion worth of manufactured goods. Not only does Virginia export top-quality manufactured goods, but Virginia has strong service exports. Service exports make up about one-third of all U.S. exports, and recent estimates put Virginia's share at just over $11 billion! This growing global market in services is available to Virginia companies, and the Virginia Economic Development Partnership - International Trade (VEDP) is here to help. Through VEDP’s programs, Virginia companies gain the knowledge and resources necessary to increase their international sales.
Markets with 96% of the world’s consumers, all outside Virginia, are potential customers for made in Virginia products. Virginia businesses exported more than $29 billion last year, and supported 300,000 employees. Export businesses provide a 40:1 return for state dollars invested. VEDP is proud to have produced results for companies across the Commonwealth, and equally proud to have received the President’s E-Star Award for demonstrated performance in growing Virginia’s export business.
VEDP’s mission is to increase the number of Virginia companies selling overseas and their volume of international business. VEDP assists both new and experienced exporters enter international markets or increase market share in an existing international market. VEDP works to identify international opportunities, develop market entry strategies and locate possible distributors and representatives for products or services—all at little to no cost.
There are many ways Virginia companies can take advantage of the resources offered by VEDP to increase their international sales. Before any company can begin to go global, it must do research on its product or service to determine if there is market opportunity. A company must define where the opportunity is, as well as determine how to enter the market, what the competition is in the market, as well as a host of other issues that must be considered in developing an international business plan. VEDP offers such research through its in-house research services as well as its global network with consultants in 45 countries. This vast team of researchers and consultants work diligently on behalf of Virginia companies to determine the best international market opportunities. They perform due diligence on international companies, qualify lists of potential distributors and in-country partners, arrange face-to-face meetings for in-country market visits, help with understanding foreign standards and assisting with shipments held up in customs. These experts provide valuable in-country market research tailored to your product or service.
The most effective way to do business internationally is to actually travel to international markets and meet face-to-face with potential end users, partners and distributors. VEDP makes it easy for Virginia companies to do just that with market visits. Company executives can participate in group market visits or an independent market visit. Group market visits are scheduled on the VEDP calendar a year in advance, with five to seven companies typically participating per trip. Although part of a group, each company has meetings specific to its industry and market objectives, with three to five meetings each day of the trip with qualified potential end users, distributors or representatives. In the event that a group market visit doesn’t accommodate a busy executive’s schedule or VEDP doesn’t have a group market visit scheduled to a particular destination, a company may then opt to participate in an independent market visit.
For companies that are already exporting and wish to increase market share in an existing market or broaden their reach into additional markets, the Virginia Leaders in Export Trade (VALET) is a proven solution to achieve those goals. VALET offers a powerful combination of capital resources provided by the state along with professional services from expert, private-sector partners. Each year, 25 qualifying companies improve up their global marketing efforts through this program. Companies graduate from this comprehensive, two-year business acceleration program with greater focus on the potential of export trade profits. On average, companies enjoy an 88% increase in international sales during and immediately following the program.
Regardless if your company is just now considering exporting or has been exporting to a number of countries for some time, there are many resources available from VEDP to help you increase your global sales. For more information on how to get connected to VEDP, visit www.exportvirginia.org.
Working with the Administration of Governor McDonnell and the Virginia General Assembly, the Virginia Economic Development Partnership looks for opportunities to improve the menu of economic development incentives available to encourage growth in targeted markets. Generally, these incentives are available to businesses that create new jobs and make capital investments in the Commonwealth, whether those businesses are coming to Virginia for the first time or have had operations here for years.
A number of important new incentives have become effective as of July 1, 2011.
A new performance grant program was established that will help Governor McDonnell fulfill his goal to make Virginia the Energy Capital of the East Coast — the Clean Energy Manufacturing Incentive Grant (CEMIG) program. CEMIG will be used to recruit (i) manufacturers that make or assemble equipment, systems, or items used to produce renewable or nuclear energy, or products used for energy conservation, storage, or grid efficiency purposes, and (ii) producers of biofuels. Except for projects in areas with high unemployment or for wind energy supply companies, the manufacturer must be investing at least $50 million and creating at least 200 jobs. The Governor may waive these qualifying criteria in communities with high unemployment. Further, the qualifying criteria are reduced to $10 million in capital investment and 30 new jobs for manufacturers in the wind energy supply sector. The CEMIG program has an overall $36 million cap, and it is expected that the maximum grant per project will be no more than $9 million.
To encourage growth in emerging technologies, a new refundable Research and Development Virginia income tax credit is now available to any business that conducts new research and development in the Commonwealth. In many respects, the Virginia R&D tax credit mirrors the Federal R&D tax credit, to make it easier to apply. In the event the business has no Virginia income tax burden, the credit is fully refundable. No more than $5 million in R&D tax credits in the aggregate will be available statewide in each year. It is expected that the value of the credit per business per year will be no more than $25,050 - $35,000. The credit is expected to be (i) 15 percent of the first $167,000 in enhanced Virginia R&D expenses paid or incurred by the business during the taxable year or (ii) 20 percent of the first $175,000 in enhanced Virginia R&D expenses paid or incurred by the business during the taxable year if that R&D was conducted in conjunction with a Virginia public or private college or university. To further encourage the growth and commercialization of emerging technologies, $10 million has been made available through the Center for Innovative Technology’s Gap Funds and the Commonwealth Research Commercialization Fund to fund research, spur commercialization and hire eminent researchers in key technologies.
For promoting the efficient use of Virginia’s maritime ports, there are three new Virginia income tax credits. The first is a Barge and Rail Usage tax credit that provides a $25 per container credit for each container a company transports by barge or rail, rather than by road. There are $1.5 million of credits available each year under this program. The Virginia Tax Commissioner will allocate these credits among the eligible companies. The second tax credit rewards manufacturers or distributors that increase their usage of Virginia’s maritime ports by at least 5 percent over the previous year. Any qualifying business may receive a credit for the increased usage valued at $50 per container, up to $250,000 per qualifying business per year. There is a statewide limit per year for this credit of $3.2 million. The Virginia Port Authority will allocate these credits among the eligible companies. The third tax credit is for warehousing or distribution companies that (i) increase their use of Virginia’s maritime ports by at least 10 percent and (ii) hire new workers or make new capital investments to facilitate trade. This program provides a credit equal to $3,000 per new job or 2 percent of the new capital investment, with a maximum statewide credit per year of $250,000. If demand outpaces available credits, the Virginia Tax Commissioner will allocate these credits among the eligible companies.
These attractive new programs will help Virginia strengthen its competitive advantage in key industry sectors and add value to a company’s business proposition in Virginia. Please contact Paul Grossman at pgrossman@yesvirginia.org to learn how these programs can help your company grow in the Commonwealth.
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