Sahihai - The Awakening of the Elephant: India on the Eve of its Sixtieth Independence Anniversary

The Awakening of the Elephant: India on the Eve of its Sixtieth Independence Anniversary

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From Then to Now:Charting the story of India?s economic, political and social growth.

Forbes's Robyn Meredith has published an interesting book titled - The Elephant and the Dragon. It is worth a reading because of all the anecdotes and factoids.
As India prepares itself to celebrate its sixtieth independence day on August 15, 2007, the internationally renowned magazine, Time, has come out with the cover story titled - India Charges Ahead. Especially interesting besides the articles, is the piece titled -

"I would say India is the country of the future. The center of gravity has shifted from the West to the East. It is now concentrated in Asia. The economies are growing in their own way; they are creating new ways of being. They are, for instance, creating new business models that are coming out of both India and China and some parts of Southeast Asia. A lot of the manufacturing is focused in Southeast Asia and in China. A lot of the new innovative models of service businesses are coming out of India. This is changing the way the world thinks about development and business. So everybody -- Pittsburgher and American alike -- really should be paying very close attention."

Manjeet Kriplani, Former Business Week Asia Bureau Chief

India has come a long way. After being a dominant economy in the seventeenth century, it went on a downward slide economically until 1991 when it had all but $1.92 billion in its coffers! Since then the country has sprung back both financially and emotionally. The foreign exchange reserves now stand at healthy $225 billion as reported by the Reserve Bank of India in August 3rd, 2007. More than that, the country is regaining its confidence in itself. The younger generation does not see itself inferior to anybody anymore. Walking down the crowded, chaotic streets in Pune, Bangalore, Mumbai, New Delhi or for that matter any metropolitan city, one can sense increased vibrancy. Despite of frequent power outages, pot holes on roads, polluted air, there is a hope that things are getting better. No longer Indians are limiting themselves to being software developers to the world. Now they are ready to climb the next mountain and the next one after that. Business process outsourcing is trudging along with information technology. Now the focus has shifted to knowledge process outsourcing (KPO). Financial houses in the west have found out that students educated at the Indian Institutes of Technology are comparable to the product coming out of MIT and Stanford. The world is slowly recognizing the skills of students graduating from the Indian Institutes of Management. While the IITians have established themselves by taking jobs in the US, UK and other western countries, the IIMers still a unknown commodity. It is a matter of time when these management experts start showing their intellectual capability and business skills.

The world thinks that India is a source of cheap labor. Instead, the world has to look at India as a source of inexpensive brain power.

India businesses are moving ahead too. For years since India's independence, "profit" was a bad word. The socialistic mindset frowned upon any business trying to make profit. As a result an underground economy evolved and flourished all these years. Indian business managers learned how to survive under such restrictive business practices. Government policies changed back and forth in matter of days and weeks. Indian managers had to be extremely quick on their feet and always be prepared for anything unexpected. Even under these unhealthy conditions Indian businesses survived and in some case thrived. Now the same businesses have been unshackled. They are spreading out beyond India. Taj Hotels is buying assets in the US. Tata Tea bought Tetley Tea. Tata Steel acquired Corus. Reliance Industries is on the prowl and so also many other Indian firms. Jet Airways is getting ready to start its maiden flight to the US on August 5th.

It is expected that the Indian businesses will manage the combination of western assets along with Indian assets much better than vice-a-versa. Indian managers have lot to learn about the western business practices. However, the inflow of western trained Indian managers is helping Indian companies learn the western business practices in a hurry. Take for example the decline of customer service in the US. Cost pressures have made US companies to cut back on customer service to the extent that you end up spending minimally twenty to thirty minutes navigating the computer menu on telephone before getting to a live person. In the west, people are being replaced by computers to reduce the cost of customer service. In India it is going exactly the other direction. Customer service has improved dramatically. It is such a pleasant feeling to see a smiley face when you enter the lobby of an India hotel!

India is also leap frogging on the technology front. For long Indians had to live with government controlled agencies known for their bureaucracy and corruption. Now they have options. Getting a mobile phone at Orange in Mumbai is a breeze compared to doing the same at Cingular in the US. Not to mention that you are comfortably seated while the associate is setting up your account as opposed to standing for half an hour in front of the desk at Cingular while the associate time slices between you and other three customers. This does not meant that everything is fabulous in India. India has long ways to go but the trend is looking good.

So, where can India go from here?

India has to focus on sustainability of its economic development. For that it has to focus on the following

De-regulation: For that it has to make sure that it de-regulates and unshackles Indian businesses from government regulations. The goal should be make things easy on business and not focus on control.
Privatization: Indian government has to start the process of privatization. Public sector companies created during the socialist ear have to make way to privatization. Except for a few public sector companies which are managed effectively, the rest are nothing but bastion of life long employment for people with very low productivity.
Promote Entrepreneurship: Indians are essentially entrepreneurs. Indian entrepreneurs have done exceedingly well outside India. India has to make it easy for budding entrepreneurs to start new business. India has to emulated Hong Kong model where one can start a new business in matter of hours.
Promote Competition: Indian businesses were shielded in the past from competition coming from abroad. This protectionist approach had a major negative consequence - poor quality of products. Only when the Indian businesses are made to match quality of products coming from other parts of the world, would they improve their business processes.
Improve Infrastructure: India has to emulate China in this regards. Government has to play the critical role to improve India's infrastructure. Only the government can do that. India has to think big. It is not a question of just linking two cities with a highway. The government has to embark on major highway projects similar to what the US did in the fifties.
Education: India needs to ensure that it has kept the pipeline of trained professionals primed. Not only India has to supply trained manpower to its internal growth but also to the rest of the world. India's greatest asset is its trained people. Government should create incentive for Indians trained in western countries to come back and run universities in India. Today the quality of product coming out Indian universities precipitously drops after the top two tiers of schools.
Special Economic Zones: Create large number of special economic zones. Provide incentives for businesses which are export oriented. Provide theses SEZs with reliable power, water and other utilities. Create corridors connecting these SEZs to seaports and airports. Exploits India's low cost manpower to extend the benefits of globalization to rural areas. Provide necessary incentives for small farmers to grow roses, mushrooms, strawberries and other produce which have demand in the west.
Improve Supply Chain: India lags way behind in the supply chain management. Anywhere between 30% to 60% of the produce is wasted because of pathetic supply chain management. Refrigerated warehouses are virtually non-existent. Western business practices are very much needed in this area. India should make things easy for likes of WalMart to come and introduce state-of-art supply chain management practices. Doing so will not only benefit the Indian consumers but make way for lot more exports.

For last several decades, Indians have proved themselves to be individually smart. They have to now prove that they are collectively outstanding. Indians have excelled individually as doctors, engineers, scientists, artists and in many other professions whenever they have planted themselves in an environment that was conducive. Yet, Indians have not demonstrated their collective power. This is true even in the west. Indians have not organized themselves effectively in India or the west. They have not been able to leverage each other's strengths. While there are several Indian associations in major cities in the US, there is not a single organization of Indians across the US!

As India prepares itself for next ten years, Indians all over the world have to commit themselves to come together for their own advancement and that of the society they belong to. Indians have a lot to contribute to humankind.

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