Friday, August 15, 2008

Corporate India's author - CEOs speaks on nation building on the eve of Independence Day

Henry Luce, the legendary founder of Time famously remarked there are men who can write, and there are men who can read balance sheets. Those who can read balance sheets cannot write. There are many around the world that have proved him wrong, and India Inc. too has its fair share. On Independence Day, Corporate Dossier presents nine accomplished author-CEOs — as good wordsmiths as they are managers of toplines and bottomlines — articulating their ideas for India's future. It was Luce again who called business an instinctive exercise in foresight. So is nation building, say the bestseller writers


Policies For Hope
POLICY MAKERS NEED TO RECOGNISE THAT FREE MARKETS AND REFORMS IN THEMSELVES CAN BE PRO-POOR
Nandan Nilekani


IN A CONVERSATION EARLY last year, Captain Gopinath, the founder of Air Deccan, told me of one of his early triumphs – the sight of tribal women carrying mattresses and baskets on their heads, boarding his flight, taking advantage of air tickets costing less than Rs. 300. This changed quickly however, once the government hit airlines hard with new surcharges and taxes on airport development and aviation fuel. The aviation fuel taxes alone — between 70% and 100% higher than international rates — resulted in charges that amounted to more than three times the cost of the cheapest ticket. Across airlines, threefigure prices — and the idea of “making every Indian fly” — quickly became history. This tax policy has reflected the essential focus of Indian governments — raising capital from Indian consumers and markets, money which they planned to invest in subsidies and ‘pro poor’ schemes such as the National Rural Health Mission and the Sarva Shiksha Abhiyan. In fact, the recent focus in India when it comes to reformist, pro-market policies has been on raising FDI limits in sectors like insurance and banking — policies that would bring in substantial additions to public revenues, with which the government can fund its surging fuel and food subsidy bills. For me, this highlights the fundamental problem underlying our economic approach – the fact that our politics still does not fully recognise how markets and reforms in themselves, can be pro-poor. Markets can enable solutions that – whether in the form of cheaper air tickets, employment choices or better education – address the lack of access, and bring about meaningful change in the lives and incomes of people outside the middle class. But for too long, the government has seen itself as the creator of access and equality for the poor, the quintessential maibaap, with the markets playing at best, a secondary role. Of course, the government’s proposal to hike FDI limits is long overdue. It had made a big difference to India’s IT sector in the 1980s – for Infosys, foreign competition and no limits of international investment meant that we cut our teeth as a young company competing against the best in the world. We became a better firm for it, in the scale and excellence of our operations, our infrastructure and in our global certifications and standards. But my two decades at Infosys also gave me a chance to assess the various kinds of impact markets can have, as I witnessed what our company managed to achieve. Yes, we created wealth for our shareholders, built a powerful brand domestically and internationally, and were part of Indian industry emerging as a major player in the world’s software markets. But there was another important aspect in our rise – the aspirations that businesses like ours fuelled for young, educated Indians, and the employment opportunities we created for graduates across India. Indian IT was enabling twenty-somethings fresh out of college, to earn incomes and a future their parents had never seen. And among our employees, there were some particular stories that stood out for me. One was that of Fatima Bibi Sheik, a young girl from Andhra Pradesh whose husband, a pushcart vendor who sold puffed rice and pani puri on the streets, supported her education and put her through engineering college. She joined Infosys in 2007. Another was C Prasad, the son of a rickshaw puller and a domestic maid, who joined our firm earlier this year. And we also hired many Infoscions from villages where caste discrimination was so persistent that they were forbidden through their childhood to enter certain houses and parts of their neighbourhoods. What struck me about these youngsters was not only how companies like ours gave them access to opportunities that their parents lacked. It also brought home how impossible it was for these students to achieve these goals by themselves, however frighteningly bright they were. People like Fatima and Prasad were toppers in their schools, scoring in the highest brackets in state examinations. But Prasad’s parents could only afford to send him to a government school that taught no English. He got English and soft skills training through the Jawahar Knowledge Centre initiative that the Andhra Pradesh government had started in 2004. Similarly, the Andhra Pradesh State Minorities Finance Corporation helped out with Fatima Bibi’s fees. And despite such assistance, the extreme poverty of these families meant that they had to struggle every step of the way. The rapid growth that India witnessed over the last two decades is fuelling new hopes among Indians, for better lives, incomes, and employment. But there is too much that still barricades the way. And the reason that so many Indians remain cut off from the economy is that we have yet to fully embrace what ought to be the core idea behind reforms – expanding access. India has long been a country that the Nobel prize-winning economist Douglass North calls a ‘limited access’ economy. North defined such countries as those that have high barriers to people accessing capital, jobs, good education, and effective infrastructure. In our weaknesses, India epitomises the ‘limited access’ economy. The lack of capital means that Indians find it difficult to take loans to start up a business — or to shift from their street carts to shops. Weak subsidy systems mean that poorer Indians lack any kind of safety net to take big life risks, such as attempt higher education or migrate for better jobs. Only 15% of our farmers have bank credit, and farmers complain of banking officials demanding bribes to approve a loan. With our government schools in a dismal state and teacher truancy rates the highest in the world, good schooling is limited to the Indians who can afford to send their children to private schools. The limited expansion of large-scale manufacturing has limited the surge of job opportunities mainly to the services sector – and as a result, mainly to educated or English-language fluent Indians. Elsewhere, much of our workforce – over 90% – still languish in the underpaid, underemployed unorganised sector, or eke out a living in agriculture, a sector already burdened with too much manpower. The reforms we need to transform India in terms of access are the ones that right now, are on the backburner. The debate on reforms to improve labour market flexibility for instance, has all but disappeared since Yashwant Sinha’s gutted proposal to ease labour regulations in 2001, which means large scale job creation is some way away. Education remains stymied by weak, porous state initiatives that do little to tackle teacher incentives and failing government schools. And the Indian government is struggling to translate infrastructure investments into tangible results, or ease constraints on lending and capital across our banking sector. Indian initiative has tried to fill the gap — our NGOs and entrepreneurs have attempted for instance, to improve our education outcomes, whether it’s through the efforts of Pratham, Akshaya Patra or of entrepreneurs opening up private schools in slums and cities. IT companies have also been involved in such reach out – Infosys has Campus Connect running across several hundred colleges in India, which trains students in the skills necessary to work in the IT industry. But these disparate efforts won’t bring the kind of sustainable change that comes from making access the central theme of our reform policies. The most successful countries in the world managed high and sustained growth rates precisely by addressing questions of access. US, Japan, South Korea and now China only saw prolonged periods of growth when their literacy rates rose, and when large-scale manufacturing jobs shifted large numbers of people from the poor into the middle class. Such access defined the ‘American dream’ of the 1950s and 1960s and to some extent, China’s Great Leap in the 1970s and 1980s. Growth, as long as it comes without such access, will be short-lived; it limits the capacity of a country to use its talent effectively, and address inequality, it ensures an edge of bitterness in the midst of economic success. This year, we have a chance to regroup, and re-evaluate our paths to growth. This Independence Day is likely to be a more sober one, compared to the celebrations of the last four years. Our stock markets seem to be in the after-party hours, coming down from their highs and assessing damages. High oil and food prices are tamping down on 9% growth forecasts, inflation is a worry, and our businesses are offering toned down growth estimates. Broadening access would go a long way towards addressing these new challenges — tapping into more human capital for instance, would help us innovate and come up with low cost and low energy solutions. Tackling our farmers’ challenges in accessing credit and better infrastructure would cut inefficiencies in food production, and reduce our vast crop losses, helping us offset the growth in food prices. There is no dearth of ambition and hope in our country. Occasionally, I come upon pictures and write-ups on the ‘computer schools’ that dot India’s poorest neighbourhoods, in the slums of Dharavi in Mumbai, Kalighat in Kolkata, Haiderpur in Delhi. These schools are usually one or two rooms deep within the slum colonies, which offer their students classes in Windows programming, making power-point presentations and web pages. Other, competing schools in these neighbourhoods offer English classes, while several small signboards herald fully functional private schools. It’s apparent that for these families, what the IT and the broader services industry has offered them is hope — the first glimpse of a way out for not just the middle class, but also for the many Indians who live in the midst of chronic poverty and hardship. As things are today, many of these Indians will find this goal a struggle. India has long been seen as a country that exemplifies such struggle — our success stories have been hard-won ones. The reforms that we’ve so far forgotten could do much to transform that, and to redefine India as a country of hope and of aspiration, with its own version of the economic dream, that offers for “every man/woman, regardless of birth, a shining, golden opportunity”.

The author is Co-Chairman of Infosys. His book Imagining India will be out in November 2008. The views expressed here are personal

Save, Spend, Spend
G E N E R AT I N G C O N S U M E R DEMAND IS KEY TO I N D I A ' S G R O W T H
Kishore Biyani

DURING MY FINAL year of graduation at my college in South Mumbai, I started spending a lot of time observing what my friends were wearing and how they dressed up. My father and uncles were involved in dealing with fabrics at the nearby Kalbadevi market. But at college I realised that I was being witness to a revolution. Earlier people dealt in 'fabrics'; in the new era, it was called 'fashion.' The change of a single word implied a new meaning and a metamorphosis in the very concept of clothing. People were becoming fashion conscious and dressing up was 'in'. Instead of going to tailors, they had started buying readymade brands. As I explored this further, I discovered a larger story of value addition, employment and wealth creation. I studied how a bale of cotton was transformed from a commodity, into yarn and then into a fabric which was then stitched, distributed and sold as a branded readymade trouser at shops. Being involved in this process helped hundreds of people earn their livelihood. From the bale of cotton at an agricultural field to the trouser at the shop, the value multiplied more than twentyfold. It was quite obvious that transforming a commodity into a value-added branded product created jobs and generated immense income for those involved in the process. There on, I first set up a small manufacturing unit and then launched a few readymade shirt and trouser brands, followed by a distribution and franchisee network for these brands. As we were building this business, we started discovering new possibilities. The 90s in India was marked by economic liberalisation. Income levels were rising steadily and consumer aspirations were changing at a rapid pace. We were moving from a socialist economy to a demand-led market economy. The demand for more value added branded products was evident not only in apparel, but in every product category. That's how we decided to move into modern retail, first launching a department store, followed by hypermarkets and a number of other retail formats. Modern retail introduces customers to brands and shifts consumer demand from commodities to value added products. So whether it is fashion, packaged food or furniture, it creates demand for value added, readymade products. It also provides an exciting environment wherein customers buy more than what they had initially planned to. In effect, it raises consumption of value added products across every category. This demand for value added products has an immediate multiplier effect on GDP growth and economic development. It creates jobs in the manufacturing sector, which in turn raises income levels. Higher income levels lead to a further rise in consumption, thus setting in motion a virtuous cycle of consumption and economic development. The economic growth witnessed in the past decade has largely been fuelled by the rise in domestic consumption. The mushrooming of shopping malls may be one of the most visible signs of this growth, but beyond the neon lights, elevators and air-conditioned showrooms, is a lesser documented story of transformation that modern retail brings into society as well. Apart from offering new business opportunities to a large number of suppliers, manufacturers and ancillary service providers, modern retail provides employment to a huge mass of youth. Not the youth who take up white-collar jobs, but the less educated, less privileged youth often living in the slums. More often than not, they are women from families wherein no other member has ever worked in the organised sector. These women become part of a social change in their communities, by not only earning a livelihood but also a sense of respect and responsibility in their community. In turn, they also join the consuming class that fuels sales in the very shopping malls they work in. It is not without reason that in almost every developed country, retailers are among the largest corporations. Retailers play a significantly large role in the economic and social transformation by creating demand and catalysing consumption and development. The same can happen in India provided we are able to strengthen the foundation for consumption-led growth in India. India has among the highest savings rate anywhere in the world. Compared to less than 10% in almost every developed country in the world, our savings rate has actually gone up from around 21% during the first few years of liberalisation in the 1990s to above 35% now. More than two-thirds of the public savings are kept in largely unproductive liquid assets like cash, bank and post office deposits. Such high savings rate is one of the biggest impediments towards strengthening a consumption-led economic model. One of the chief reasons for such high savings rate is our existing tax laws and public policy. Our existing tax laws not only encourage savings, but actually discourage consumption through a multitude of taxes - income tax, sales tax, service tax et al. This was relevant at a time when economic consensus was to create growth through public investments. The new economy requires new laws and public policy measures that boost domestic consumption. At this stage, it is extremely crucial for us to generate larger consumption demand that helps in creating jobs and increase income levels for a larger mass of people. Facilitating the growth of the modern retail sector can be an important enabler for increasing domestic consumption. Along with this, we need to bring in policy and tax incentives that actually incentivise consumption. This can potentially help us not just sustain but also improve upon our rate of economic growth. Is it really possible for the government to incentivise consumer spending through public policy measures? To quote Robert F Kennedy, "Some people look at things as they are, and ask why. But I dream of things that never were, and ask why not."

The author is the group CEO of Future Group and best-selling author of It Happens Only in India. The views expressed here are personal

Let Every Day Be November 14
INDIA'S UNIQUE DEMOGRAPHICS GIVE IT THE EDGE OVER EVERY OTHER COUNTRY. CHILDREN ARE ITS REAL ASSETS FOR THE FUTURE
Stefano Pelle

NOT ONLY HAVE I lived in India for about nine years, but my better half comes from this country too. No wonder I feel that India has become a very part of my being. During the years spent in India, I have realised that India is very similar to my birth country, Italy. The strong family ties, the warmth of the people, the variety of food and the laid back approach to life (in some States/regions) - in all these aspects and more, both 'my' countries (India and Italy) are so similar even though they are so far away from each other and have such different histories. Even more striking are the similarities when it comes to politics, where both the countries are parliamentary Republics with two Chambers. Both the Constitutional Charts were written and approved in the late 1940s. Both the countries have had a dominant party for many decades and plenty of governments. In fact, the scenes that happened and were shown in television during the recent confidence vote on the nuclear deal could well have happened in Italy, though probably with less humour and drama. Of course, there are differences too, and one of them stands out more starkly than any other: the structure of their populations. While India is a substantially young and growing nation, Italy is a rather old and diminishing one. During my first years in India I was surprised by the number of children one could see on the streets, in the social gatherings, in the restaurants and theatres. Sad to say so but in Italy, like in many other European Countries, one hardly sees children in the streets: in fact the number of children per household in Italy is just above one, a fundamental reason why our population is rapidly declining with the risk that the Italians may disappear from the globe if such a trend continues. The children of India have certainly made a difference for me and left marks that have changed my perspective on life, and not only because I worked for a confectionery company, the products of which were mainly targeting children. This has certainly enriched my professional background and has given me the opportunity of operating in possibly the most exciting of the BRIC countries. But it is my personal side that has been profoundly changed during the years in India, and this also thanks to Indian children. I remember having met an Italian couple at a friend's home, during a get-together in the garden of a grand house, one of those very common social events taking place in Delhi during the party season. Somebody told me that they were involved in something to do with children, but at that moment I had not understood exactly what that was. I had guessed they were part of a charitable and education-related institution, and I was amazed to find out, while talking to the husband, that we had a similar educational background, since we both had studied economics in Italy. It was difficult for me to find the link between economics and the activity he was now carrying out in India, and curiosity to know more about this matter made me decide to go and meet them some weeks later. Once there, it took me just a few minutes to realise that what they were doing in Delhi had not much to do with economics, but was rather a matter of sincere love and compassion. That visit deeply impressed me and I thought to myself that if a young couple had had the will and the strength to leave everything and come to India to help those in need, I should also try to extend a little help to them in this noble path. That happened many years ago, and since then the children of that "house of hope", and in general the Indian children have become an important part of my life in India. Their expressive eyes, their sincere smile, their energy and openness can really change the mood of anyone, even the most introverted and grumpy person. I have seen this happening in front of my eyes: people arriving with serious and worried faces and leaving the house with huge smiles and clothes creased from the crazy games and hugs of the joyful creatures. I have met many children over these years: some very well behaved from affluent families; some more naughty and often asking for the latest one of our candies; many dressed in dirty clothes in slums or begging at the traffic lights and living under the flyovers. Each of them was different, but almost all of them had light in their eyes and seemed to be willing to give and receive love and affection. I believe that children are the future of India, a future that is partly hindered by the lack of infrastructure in primary education. This country has immense talent potential, but only a small percentage of the population enjoys the opportunity to live up to that talent. The enlightened mind of Pandit Nehru had the vision to conceive institutes such as the IIT, that, together with many more management institutes created later, have ensured an excellent level of education at the graduate and post graduate level in India. Unfortunately, nothing similar was done at the primary level. Though the rapid growth of the population has the potential to provide skilled resources not only to India but also to many more nations, the lack of adequate primary education risks becoming a bottle neck for the future growth of the country. Apart from the major themes on which the now strengthened Government will concentrate during the months to come, special attention should be given to the education issue. From the training of the teachers, to the creation of institutions where access to quality education is not restricted to the elite and a good level of basic education is available to all. According to a recent survey, over 80 per cent of government-school teachers send their own children to private schools. If these teachers do not trust the education imparted in government schools it means that the current education setup needs a dramatic change. Finance Minister Mr. P Chidambaram announced in the latest Union Budget a twenty percent hike in the education budget (from Rs 28.600 crore to Rs 34.400 crore), 40% of which allocated to the Sarva Shiksha Abhiyan scheme. This is certainly a step in the right direction, and hopefully the announcement is being followed up with the right implementation. However, the resources dedicated to the opening of three new Indian Institutes of Technology in Andhra Pradesh, Bihar and Rajasthan and 16 central universities announced at the same time might perhaps have been more productively allocated to further strengthening primary and secondary education. Furthermore, we should not leave the heavy burden of developing the future of Indian children solely to these Institutions. Each of us can do something in this direction, for instance by sponsoring the education of one or more children. Those with specific skills may spend time in schools and share their experience and knowledge with the students, perhaps becoming a role model for them. Those who are part of the corporate world may decide to set aside some funds to adopt one or more schools, by improving their infrastructure, paying for their teachers' training, helping them expand their teaching and syllabus. Last but not least, we should learn to respect all children, not only the smart and well dressed ones, but also those who knock on the windows of our cars at the traffic lights. Let us show such example of resilience to our children and let them understand that many children are less lucky than they are. Let us offer sweets and clothes if not money to those children and realise that they also will build the future of the country and maybe among them there is the future President of India. This will help us look at them with a different perspective. Reforms in pension, insurance and banking are certainly long overdue and are very likely to appear in the agenda of the Government in the monsoon session. When will, however, a structured reform of the primary education system become the focus not only of the government but of the whole country?

The author is the VP & COO Business Unit Russia & South Asia of Perfetti Van Melle and the author of Understanding Emerging Markets: Building Business BRIC by Brick. The views expressed here are personal.

Infrastructure for Iqbal's India
INDIA CAN'T LIVE UP TO THE POET'S IDEA OF INDIA BY NEGLECTING ITS INFRASTRUCTURE AND WITHOUT A STRONG SENSE OF PURPOSE
V Srinivasan

IT IS OUR Independence day. We will again celebrate this function by singing the song Sare Jahan Se Accha Hindustan Hamara meaning our India is the best compared to all other places in the world. In the olden days very famous Tamil poet and freedom fighter Bharathi said Parukkulle Nalla Nadu Nam Bharatha Nadu, meaning that our country India is the best among all the countries. As part of my endeavour to establish 3i Infotech as a global company I have travelled to more than 50 countries across all six continents and have also travelled to the Arctic circle. Based on my travel experiences I started feeling Sare Jahan Se Bura Hindustan Hamara. Don't get me wrong that I am non-patriotic. I am saying this with deep pain and a sense of frustration. Just because it is a country of 100 crore people and the aggregate numbers are bigger in respect to several indicators it has started getting respect from the rest of the world. Other than that, at the local level and at the individual level, there is nothing Accha about India, in spite of knowledge and capability being better than several places in the world. The infrastructure across the country is very poor. The roads are so poor that you are extremely lucky if you are able to cover a distance of 40 kms per hour as against a distance of 80 to 100 kms per hour in most of the other countries including several countries in Asia. In certain states in India even 40 kms per hour is not possible. Hence you need to have double the time to go any place or to transport any goods from one place to the other. The power scarcity is so heightened that you need to have UPS, back up DG sets, and so on to run any office or plant. Hence the redundant capital expenditure for running any operations is very high. The airports are so shabby that sometimes entering the gate of Delhi International Airport ( I am referring to the outside gate and not the security queue) can take as long as 45 minutes to an hour. I am not exaggerating. This is my actual experience. The freedom level of people is very high to the extent that anybody or any group of people can do anything. They can throw stones, they can set fire to the buses, they can stop work, they can shout at others. I do not think that any other democratic country has such a high level of freedom to cause inconvenience to others. The discipline level is very low with the result that productivity is low. While the people sit in offices for long hours, their productivity during those hours is very low. Further, in view of the conventional availability of labour in abundance, we Indians always think that a job which can in reality be done by one person, needs four or five people. In every job we have more supervisors than people to do the work. For instance I shifted my residence in US as well as in Mumbai about 3 years back. While in US, 3 people handled the shifting job in 4 hours and kept everything perfectly, in Mumbai it took 12 hours with 8 people and at the end of 12 hours the new house was in a mess. Further because of the Chalta Hai attitude the work was not finished perfectly and left shabbily. The wastage in every walk of life is very high. In view of the poor roads the capital turnaround on investments in transport vehicles is very low. In view of the traffic jams and low speed on Indian roads, the wastage of petrol and diesel in itself may run into billions of dollars. Again in view of the poor roads and poor high speed train connectivity we cannot move our offices to the suburbs and we would have to pay very high rental costs to locate the offices in cities (3i Infotech's average rental cost in the US is lower than its average rental costs in India). Further we have to pay higher salaries to employees to take care of their higher costs in cities. This again results in a huge wastage of money. In view of the power scarcity, one has to keep 300% back up options like UPS and DG sets which agains result in a lot of wastage of capital. Because of the poor refrigeration and storage, the wastage of vegetables and fruits is enormous. Thus in every walk of life the wastage and cost inefficiencies are very high. What is the root cause of poor infrastructure and shabby work? Is it lack of resources? I do not think so. I think the corporation tax collected per foot of road in cities may be higher in India than in the US, as in cities like Mumbai an apartment complex with a frontage of 100 feet may have 24 or 30 apartments, whereas in the US a 100 ft frontage will have one or two houses. It is again the wastage, pilferage and corruption which results in most parts of the budgets not being used for intended purposes or not reaching the intended beneficiaries. All these have put India at a very low level of global competitiveness. If we have to make India Sare Jahan Se Accha we need to improve global competitiveness. In a globalised world this is the only way India can aspire to become a superpower some day. Hence, improving global competitiveness in as many fields as possible should be the highest item on the agenda. While at the Central Government level a lot of plans are made to improve the infrastructure and do economic reforms, the importance of these are not fully understood and appreciated at the state level and local level. The current administrative machinery and the procedures and the lack of global awareness of the concerned officials make it difficult for the benefits of reform to percolate to the people. Today in the Government and public sector, not doing anything is a safer option than doing something for society. Hence if we need to ensure global competitiveness, the need of the hour is to immediately implement administrative and judicial reforms at all levels which enable things to progress well. This is more important than higher fund allocation, as without these reforms higher fund allocation may only lead to higher pilferage in the system. Let us implement administrative and judicial reforms, then allocate more funds for infrastructure or find innovative ways for developing infrastructure. This will result in improving global competitiveness and ensure inclusive growth for people in India , both urban and rural and will make India Sare Jahan Se Accha. I do not know whether we will have the political will and support to implement these or will allow more and more of our citizens to migrate to more Accha countries.

The author is MD&CEO of 3i Infotech and the author of New Age Management Philosophy from Ancient Indian Wisdom. The views expressed here are personal.

India Unlimited
THE ANSWERS TO ALL THE QUESTIONS THAT A RESURGENT INDIA SEEKS LIE WITHIN
R Gopalakrishnan

IN INDIAN MYTHOLOGY, one day in devaloka is a whole year for humans. The lunar month beginning in mid-December is like pre-dawn and in mid-January a new dawn breaks for the Gods. During this period, if actions are taken with a pure mind, concentration and a positive attitude, then an effulgent and successful day can be expected. India is in such a pre-dawn period. Public life in India needs to be characterised by a clean mind, concentration and a positive attitude. Strictures against chief ministers and views like 'God save this country' from the highest judicial body are a national shame for our system of governance. My great grandfather spent his entire life in Vilakudi, our ancestral village in Tiruvarur district, Tamil Nadu. His generation accepted that the British would be around forever. My grandfather's generation must have wondered whether the British could stay forever. My father spent his initial life in the village but moved out to the city. For his generation it was clear that the British would certainly have to leave; it was a matter of when. I grew up in post-independence, urban India with occasional forays to the ancestral village. My education was replete with nationalistic rhetoric and my generation was obsessed with India's poverty and the passion to distribute "nothing" with great fairness. My children's generation is obsessed with opportunities in India and wants to do things. The national economic statistics of 1950 versus 2008 suggest fantastic progress but these could have been vastly better. It is the proverbial half full, half empty cup. Just as marketers forecast new product performance by building a 'stochastic model' based on the consumer mindset, the future of India is based on the consciousness of the youth of India. The lead indicator for a nation's future is the mindset of its young people, especially in India where 55% of the population is under 25. Indian youth have a huge amount of dissatisfaction, hopefully a divine discontent, and they can change things around. They have three strengths: first, persistence, second, innovation, and third, happiness. These are distinctive and are rooted in our history and genes.
PERSISTENT INDIA
Two anecdotes exemplify this: Ramesh, a tea boy in Shahjehanpur, UP, once insisted on conversing in English. "I want to practice with you and pass TOEFL, so that I can go to America. 500 English words are enough to pass TOEFL," he said with a 'can-do' look on his face. In Mithapur, Gujarat, I asked Arvind Chudasama, a micro-entrepreneur, supported by a Tata Chemicals outreach activity, about the state of his ice cream business. Bad, he replied. Power cuts. So what about his loan? "I took a second loan to buy a chakda (like a jugad, intervillage transport contraption). I make enough to repay the loan and to invest in a battery to power the ice cream machine," he said, full of confidence. Living in India is like running an obstacle race. One is overcoming obstacles, every day and all the time - poor schools, crowded cities, corrupt officials, unhelpful agents of governance. Indians have the freedom of democracy but not the liberty that is supposed to accompany democracy. Only when common people can get ordinary, day-to-day things done without a hassle can we say that Indians have the liberty of democracy. "In India, democracy is flourishing, liberty is not," to borrow from Fareed Zakaria's comment (The Future of Freedom). But let us not despair, these things take time. 80 years after the Declaration of Independence, the US was fighting a civil war. Our democracy is maturing. In the meanwhile, the never-say-die and can-do spirit of Indians like Ramesh and Arvind Chudasama holds great hope for the future. Persistent India.
INNOVATIVE INDIA
When I lived in Saudi Arabia, I learnt an Arabic aphorism, Kollu Oqda Laya Hull, which means 'every problem has its own solution.' Problems and opportunities are two sides of the same coin. Indians solve problems. Indians are entrepreneurial in their genes and through their history. They are restless, constantly seeking new ways of doing things. They can be almost exasperating in this respect. Dharnidhar Mahato (Balakdih, Bengal) developed a Rs. 500/- cycle pedal paddy thrasher, which costs one-fifth and produced twice the output of a regular thrasher. Arindam Chattopadhyay (Bankura, Bengal) developed a single finger pen so that the handicapped could write (Ref: Honey Bee, National Innovation Foundation, March 2008). The message is that India can innovate big-time like the Param and Eka supercomputers, the Nano car and the offshore software delivery model. Indians have also democratised innovations like the cycle pedal paddy thrasher and single finger pen. For innovation to be valuable, there has to be ambition. The ambition of young Indians has increased, so the innovative spirit is poised to deliver big time. Innovative India.
HAPPY INDIA
JRD Tata once said, "I do not want India to be an economic super-power. I want India to be happy." The MTV Networks International published a well-being index, according to which ''young Indians are the happiest people on the planet". Among people in the age group of 16-34, Indians reported 60% happiness, at about the top end along with Argentina which was 70%. Guess who was miserable at the lower end? Japan at 8% and America at 30%. Kelly Services, a Fortune 500 staffing leader company found that Indians ranked first in Asia-Pacific in employee satisfaction and seventh out of 28 countries globally, with Denmark, Mexico and Sweden at the top and, Hungary, Russia and Turkey at the bottom. The Vedanta says that instead of searching for happiness outside of oneself, one should look for infinite joy and peace within oneself. Sant Kabirdas also said that fools search for happiness and peace outside. Just as the Himalayan musk deer tires itself by running around seeking the source of the fragrance, little realising that the smell originates from its own navel, man too should search his own self. Here is the story of a happy Indian from modern times. A young man, who was working in the Indian Army, could not find meaning in his life. So he decided to commit suicide. He chanced on an inspiring book by Swami Vivekananda. He took premature retirement from the army, collected Rs 65,000, and returned to his village in Maharashtra. He used the money to repair the village well, to close down liquor outlets and to mobilise the villagers to work for their own development. In a few years, his village was proclaimed a model village and he found a new meaning in life. The name of the village is Ralegaon Siddhi, and the man who put it on the national map is Anna Hazare, who was decorated with a Padma Bhushan for his pioneering work. He found happiness within himself. The sheer adventure and scale of India's economic growth, with social justice and entrepreneurship as its pillars, is staggering. There are beauty spots in this model and there are warts and moles, too. This much is beyond doubt: no experiment of balancing growth, entrepreneurship and social justice has been undertaken in human history by any country on such a large canvas. Over the coming decades, India has the real chance of reclaiming its place at the top table in the League of Nations, a position she held for centuries but lost in the last few hundred years.

The author is Executive Director Tata Sons and is the author of The Case of the Bonsai Manager. The views expressed here are personal

May Mother Be

EVEN THE IMAGE OF MOTHERLAND IS A MIRAGE, WITH AN OFFICIAL VERSION AND A VERY DIFFERENT ON-GROUND REALITY

Subroto Bagchi

I WAS BORN exactly a decade after India became independent. To me, the memory of August 15 in places like Koraput, in Orissa, where I grew up, was about waking up to the music of ramdhun. Still waiting for the darkness to lift itself, we awoke to the sound of the jeep of the district public relations department driving round playing Raghupati Ragahava Raja Ram from loudspeakers. That meant it was a special day, like no other. We hurried to wash our faces, quickly got dressed, gulped two chapattis saved from the previous night's dinner with a cup of milk, and ran to the flag hoisting ceremony. There the police band played the national anthem and flocks of white pigeons were released. They circled high above rhythmically to the last note of Tagore's enduring lines. But it was not just Independence Day and its attendant imagery that awakened in me the sense of being free, being part of a great nation. As a child, I remember my mother always humming. She hummed while she did the most mundane of things - she would hum while oiling her long, black, curly hair on the verandah in the afternoon sun; her eyes halfclosed. Her fingers caressed the flowing hair to smooth out the knots, then she patted it down with coconut oil mixed at home with hibiscus flowers she grew. She ran a Jessore comb through it and finally completed the elaborate ritual with two intertwined, serpentine knots. As she did that, she often hummed the timeless verse "dhana dhanye pushpe bhara, amader eyi basundhara, tahar majhe acche shey ki shakal desher shera….…." "In this prosperous, bejewelled and flowerbedecked world that is ours, Somewhere out there stands a country taller than them all Of dreams she is made And in memories she is encircled Nowhere, but nowhere Can you search to find such a land She is the Queen among them all She is my Motherland, my Motherland!" To a child, the idea of the Motherland is a precious image whose abstraction is never a problematic issue because she is just an extension of his own mother. Both are an unhurried intimacy in the heart. I can close my eyes even today, take a deep breath and in that instant go back to the sensation of Mother making her two braids. Eyes closed. Lips humming. She looked so enchantingly beautiful and timeless; she was becoming my idea of what my Motherland was. As I grew up, the first lessons of geography were taught to me and I saw the map of India. I deeply inhaled that map and it felt like Mother. I started from three seas that washed her feet, the expansive bosom to which her millions of children clung, her outstretched arms to the east and the west - her beautiful face slowly emerging where civilisations collided and then appeared the image of her crown - Kashmir, where snow capped mountains reflected the golden rays of a sun that rose and set everyday in praise of her glory. My mind was beautiful and innocent. But then another day came, I had grown up some more. I saw another map and after that another map and yet another map - they all depicted my Motherland very differently. The head was shorn of the crown, the image looked mutilated. The maps were all dutifully stamped with the refrain that the boundaries depicted do not correctly indicate the borders of the nation and that they are not official. I was angry and I was unhappy that my Mother's crown was put in question by people I did not know; aliens, foreign elements and faceless conspirators that Indira Gandhi told me were the "foreign hand". Kashmir after all was part of India! Kashmir was ours and mine in all the gentleness of her gurgling mountain streams, the pretty girls who held lambs in their arms, valleys in which the traveller could pick the fruits and smell the flowers with the only condition that he stop for a moment, breathe in heaven and take in the gentleness of the land and its people. Then came another day. Now I was an adult. As a 25 year-old, I was devastated when I saw the Indian cricket team being booed and the visiting Pakistani team cheered while playing in Srinagar. I had nothing against Pakistan; I was just moaning the loss of my innocence. How were Indians booing their own? In the days and months and years that followed, I felt a directionless anger swell within me. First I felt angry with the people who had stamped the maps. My soul hurt. Now I was learning that just as there was India my Motherland, there was also an India of the map in my textbooks, and an India of the Line-of-Control and yet another India that was actually "Pakistan occupied Kashmir". Which one, I wanted to know, is my Motherland? You grow up only when you lose something. To me it was not about Kashmir anymore. I was now beginning to understand Indian duality - the co-existence of an official version and what may be fact on the ground in everything we do. In everything. And about everything. Take the North East, talk about the politics of money, and the bureaucracy, the judiciary, the press, the police, the business community and everything else about the idea of India. Our political freedom and our economic freedom have not helped us to attain intellectual freedom. In my Motherland, the clear stream of reason loses its way in the dreary desert sands of dead habits every day. In the recesses of my mind flows a Jhelum with the sounds of my mother's hum and in the frontal lobes, flows another Jhelum that conveys my nation's tears. Mother is no more. She just went away telling me, "Go, Kiss the World." Now I want to kiss the world my way and I want others after me to grow up without the pretences, without having to deal with convenient illusions and half-truths including notions of nationhood that go nowhere. Actually, they stop at the borders of the human mind.
The authori is a co-founder of MindTree and the author of The High Performance Entrepreneur: Golden Rules for Success in Today's World and Go Kiss the World: Life Lessons for the Young Professional. The views expressed here are personal

Gross National Happiness
SUSTAINABLE GROWTH MEANS A HAPPY COUNTRY SHAPED BY INDIANS OF ALL STRATA WORKING TOGETHER
Arun Maira

JRD TATA SAID, "I don't want India to be an economic super power. I want India to be a happy country." When India celebrated its 60th anniversary of Independence last year, many rejoiced in India's achievements, while some began to look ahead to what the country would be on its 75th and 100th anniversaries. Two themes run through the emerging visions. One is desire for stature in the world by becoming an economic power. The other is aspiration for better lives for all in the country, with less corruption, less disorder, and less incivility. Some say that corruption, disorder, and incivility will reduce when the county becomes richer. Others see it the other way around: that corruption, disorder, and incivility are hampering India's economic growth. Sumant Moolgaokar, Chairman of Telco (now Tata Motors) had a vision when he began to create the company's new facilities in Pune. He wanted to make a factory that would surprise foreign visitors and make Indians proud of themselves. In that factory, some day in the future, he dreamed that a car would also be produced designed by Indians. And so one was, the Indica (followed by the Nano), under Ratan Tata's inspired leadership after Moolgaokar had passed away. Factories are expected to be cluttered and dirty. And Indians are not known for orderliness. To build self-confidence in Indians that they could do what they themselves did not believe they were capable of, Moolgaokar set a shorter term target-to make the factory as clean as a hospital. One morning in those early days, in the late 70's, I was walking along the shop floor and found a grimy piece of cotton waste on the ground. As I bent to pick it up, a supervisor came running up to me and tried to take it from my hand, saying, "What can we do, sir. This is the 'culture' of our people!" I asked him where I could throw it. We walked a long way to find a bin. We learned two lessons that morning. One was that we must make it easy for people to do the right thing: in this case provide the workmen with bins close to their work-stations. The other was that it should not be beneath anyone's dignity to do the right thing. I continued to walk through that shop every morning and within a week the 'culture' had changed. Indira Gandhi wanted important visitors to the country to see not just the monuments of yore in Agra and Rajasthan but also modern India emerging. Therefore Telco's Pune factories were on the official tour for foreign heads of states and Governments. Every week, I would get into my 'chief tour guide' role and drive some dignitary through the factories. They were amazed at the order, discipline, and cleanliness. And some said the factories were cleaner than many hospitals! Everyone in the factory was proud of the respect we brought to our country. And our pride, with confidence in ourselves, spurred us on to set even higher standards. The workmen in the scrap yard, where everyone left their junk and waste, were motivated too. They rearranged their yard and introduced new systems. The scrap yard became as orderly as other parts of the factory. The workmen there told me they missed the appreciation that the rest in the factory were getting. So when the next visitor came, a Prince from a Gulf State, I changed the route. We drove through the machine shops and assembly lines-all bright and orderly. He was very impressed. We next drove through the scrap yard, equally bright and orderly. Where he asked me, "What part of the truck is made here?" the proud smiles on the faces of the workmen who heard his question are unforgettable. One day, much earlier, I was driving Mr. Moolgaokar through the factory. We had barely left the office and entered a workshop when he said he wanted to go to the toilet. I started to turn the jeep around to take him back to the office. He stopped me, got off the jeep, and said, "Come with me." We both marched into the workmen's toilets where we joined them in their queues. I got the point. Thereafter, using the same toilets as the workmen became a routine for me and other managers, and it did wonders for the cleanliness of the toilets! We also ate in the same canteens as them, standing with them in queues to serve ourselves, long before it became the practice in other companies around us. The changes in culture and physical quality of the factories were brought about by the collective actions of all who worked in them, managers and workmen included. We were proud of what we achieved, with the managers getting their pride from the condition of the shop floors, canteens, and workmen's toilets, rather than the décor of their own offices. Thereafter, the managers and workmen together produced many other remarkable achievements that have made India proud, such as the 407 truck, designed and produced in a world record time of 18 months to take up the challenge of the Japanese onslaught in the LCV market in the early 1980s, and later the Indica and Ace. India will not realise its vision of a happy country in which all people enjoy a corruption-free, orderly, and civil society if the privileged and powerful shut themselves off from the rest in enclaves in which they create a world apart, protected from the troubles the masses must endure every day. They may enjoy their personal wealth, but cannot hold their heads high as proud Indians if they do not participate in and improve the world in which their fellow citizens live. A clean and orderly place to work and self confidence by working together to make change happen are not sufficient conditions for great corporate achievements. But they are necessary conditions. A happy nation may not be a sufficient condition for a country to become an economic super power though it would be a necessary condition for sustainable growth. Finally, if at the end of the day we became only happy and not an economic super power would that not be a good enough outcome?

The author is Senior Advisor BCG India and the author of Shaping the Future and Accelerating Organization: Embracing the Human Face of Change. The views expressed here are personal

The People Factor

INDIA'S DEMOGRAPHICS COULD BE A COMPETITIVE ADVANTAGE AS WELL AS A ROADBLOCK IN THE 21ST CENTURY

Vinay Bharat Ram

PETER DRUCKER ONCE famously said, "The developed world is in the process of committing collective national suicide." The non-worker is clearly placing an increasing burden on the working age population and young people are having fewer or no children. Despite an increase in longevity, the developed countries will face a decline in their population. Economic growth is unlikely to come from greater consumer demand. It will be driven by continually increasing productivity which will get focused more and more in the knowledge industries. The moot question is : Will any developed country over time have a large enough population base to remain a dominant world economic power? For how long will money and technology offset the growing imbalance in labour resources especially when modern training methodologies will make it possible to raise the productivity of workers in any part of the world? Similarly, higher education will be more freely accessible than ever before, thanks in part to the revolution in the information and communication technologies. The race, therefore, for the developed countries to maintain their lead even in knowledge intensive industries will become increasingly intense. What are the implications for India? India now has an edge over China in terms of a favourable demographic transition. It embarked in a gradual manner after 1970 towards a favourable shift in the ratio of the working age to the non-working age population. The ratio at that time was 1.2 : 1 and was 1.5 : 1 in 2000. It is projected to peak at 2.4 : 1 beyond 2030. The overall population growth rate of course should stabilise around 2015 if family planning policies are pursued aggressively. In other words, while there is a positive side to the demographic transition, the negative aspect of aggregate population growth cannot be taken lightly. We thus have a window as well as a foundation upon which to build sustained growth well into to the 21st century. However, this by itself is no guarantee for success. Despite sustained high growth of 9 per cent in the last four years our poor infrastructure is becoming a drag on further progress. It is ironic that a country which can feed over a billion people and is the biggest milk producer in the world cannot supply safe drinking water. More than half the number in our vast population may be in the employable age group, but where will they work if the bulk of them are illiterate? Educated Indians who comprise a small percentage cannot carry such a massive burden. It is tempting to simply say that the answer lies in the area of health, infrastructure and literacy; especially female literacy. Or, to restate the obvious we need more power generation, modern ports, better roads and privatisation of the public sector. At the same time we need to protect the environment and watch our carbon footprint. Not that these objectives are wrong or irrelevant. They must be pursued vigorously. However, that is hardly sufficient as a social objective — an objective that will ensure the greater well-being of the greatest number. To get an insight into this problem I will draw on the wisdom of Amartya Sen. He spells out five freedoms in his book Development as Freedom. These are (1) Political freedoms associated with democracies in the broadest sense, viz. a free press, the right of dissent, freedom of political expression and voting rights (2) Economic facilities connected with free markets and the opportunity to utilise the economic resources for consumption, production and exchange (3) Social opportunities through education and health care which affect the individual's basic freedom to live a better life as well as the ability to effectively participate in economic and political activities (4) Transparency guarantees which facilitate the freedom to carry on transactions under an assurance of disclosure and openness and (5) Protective security which may be viewed in two ways: First, to ensure the safety of life and property and second, to provide a safety net for those sections of the population which suffer abject misery from lack of food, medical facilities and unemployment. Economists and policy makers tend to focus on the agenda for change in terms of free markets, trade liberalisation and economic reforms, virtually to the exclusion of these other freedoms. This is perhaps because they do not see that these freedoms can act as force multipliers. Conversely their absence can be a drag on economic growth. They may also believe that securing these freedoms implies a diversion of resources from economic to non-economic activity or that dealing with economic activity per se will automatically provide these freedoms. Nothing could be farther from the truth. The market mechanism alone will fail to achieve them and they will have to be ensured by the State. If anyone has doubts about this, one only has to recall the spread of education and health care in China during the Mao era. Free markets were anathema at the time. Yet, later when market liberalisation took shape during Deng's regime the phenomenal economic growth that China experienced was attributed largely to the existence of a literate and healthy population. Let us now see how Sen's freedoms are relevant to the States in India. Kerala has been lauded for its high literacy level and population control. Yet the market mechanism does not work there because of the interference of labour unions. No wonder Kerala is poorly industrialised. Uttar Pradesh and Bihar have a pathetic record in creating social opportunities through education and health care thus denying people the option of meaningful participation in economic and political life. Not surprisingly these most populous states have also fared miserably in propagating birth control. The North Eastern states and Jammu and Kashmir suffer from the absence of protective security not because of the lack of commitment of the security forces - quite on the contrary - but on account of insufficient attention to safety nets and employment generation. Transparency guarantees in general though much improved because of the media and the RTI Act still have a long way to go. In short, if even one of the freedoms is absent it becomes a drag on progress. India has a tremendous opportunity for sustained high growth over the long haul, thanks to a demographic shift in its favour. However, this has to be carried forward on a foundation of enlightened reforms which take into account the greater well-being of the greatest number. To guide us along this path we have Amartya Sen's five fundamental freedoms.

Vinay Bharat Ram is an industrialist and an economist, and the author of The theory Of The Global Firm, Towards a Theory of Import Substitution Exchange Rates and Economic Development and Import Substitution, Exchange Rates, and Economic Development. The views expressed here are personal

We Want the Moon

THERE CAN'T BE A BETTER BEDROCK FOR SOCIOECONOMIC GROWTH THAN THE COLLECTIVE ASPIRATION OF BILLION INDIANS FOR A BETTER TOMORROW

Jaithirth Rao




THERE ARE AS many ideas of India as there are Indians and indeed as there are lovers of India whether native-born or foreign. The country gets under your skin and stays there. In the movie Spartacus, a Roman senator remarks that Rome is not a city, but "a thought in the minds of the gods". One can very well say that of India. The myth and reality of India gets into the interstices of our brain cells and when we reach inside ourselves to access the precise image one has, it is this "idea" that comes forth. The myth of the unchanging Indian village has exercised a great deal of power and many who have not visited a village have swallowed it. My image though is not of a static picture at all. If there is one word I would use for India and Indians it is "aspiration". Every Indian has an aspiration of improving himself or herself and certainly an improved life for his or her children. Two encounters with employees in the IT company that I started say it all. We had a young lady who had grown up in Mumbai's slums. She had managed to complete a college degree of sorts, but otherwise lacked all the accoutrements of what we associate with education. Her patterns of speech were unsophisticated, her confidence was limited, her programming skills were non-existent. But she definitely aspired! The very fact that she had worked against odds and got her degree seemed to prove that. And she wanted to go places. That was one matter that she was indeed very articulate about. We took her on with trepidation assuming that like many others she would fall by the wayside. In a matter of five years, she became a Senior Programmer in the web space and even began leading small teams. She goes back and forth between India, the US and Europe. Clients have great respect for her and in an industry where you are judged by your revenue-generation capacity, her personal billing rates are among the highest. I would not be surprised if she ends up running a Web 3.0 company of her own. The second person was one who came from a rural school and a small-town college in southern India. His father had been an abandoned orphan who had lucked out by getting philanthropic support; he had completed his high school and worked his way up to becoming a clerk. The young man was an engineer with an aspiration that would have made Jobs or Gates proud. He cleared our entrance test but had difficulties in the interviews. We took him on anyway. And neither he nor the company has looked back. Every Project Team that he has worked in has fought vigourously not to release him. He is what is known in industry parlance as "a resource in demand". He too straddles the world between client sites in the UK and our centres in India with an ease and aplomb that seems so natural that one must actually pause before one admits to surprise. Clearly, the so-called change-resistant, tradition-bound Indian of earlier stereotypes, if he or she ever existed is now merely a historical anachronism. The one thing that independent India has done, especially in the last two decades is set the aspirational genie free from the bottle to which it was confined. Indians aspire and not just in fluffy wooly-headed spiritual realms, but in the concrete worlds of professional success, economic betterment and social mobility. With all the negatives that prevail in our country, the Indian Republic can justifiably be proud that this revolution of aspirations in a society that was earlier supposed to be bound by casteridden hierarchies and religious obscurantism has become possible and is indeed widely prevalent. And this is not just in the IT sector. There are young people in sectors as disparate as finance, retail and fast foods who are pushing the boundaries as to how far they can go with the admittedly limited set of cards that they are dealt with. That is why I never get upset when I get an unsolicited cold call on my mobile phone from someone trying to sell me a credit card or an insurance policy. I picture the person at the other end of the phone line as a young man or woman taking the one chance they have in their lives to better themselves through an honest job despite its endless frustrations (I wonder what their success rates are in selling insurance or credit cards?) and despite facing rude responses on the phone. I simply believe that even though I may not want what they sell, I owe it to them to decline politely and treat them with the dignity they deserve. A leftist with intellectual pretensions once came up to me and said that the IT Industry was spawning cyber coolies. I told him that I was proud to be counted among cyber coolies. A belief in the dignity of honest labour of whatever kind goes hand in hand with the aspirational impulse I have talked about. It is only those who do not aspire, who wallow constantly in the slough of victimhood. The aspirers of today's India take the chances that they get and while great success is not universal even the failures tend to at least partially fulfill their aspirations. So on this Independence Day, here is wishing luck to the billion plus aspiring Indians, especially the young. It is they who make my personal "idea" of India.

The writer is Chairman EDS Asia Pacific Advisory Board and a published poet. The views expressed here are personal

Strat T ALK
Tailormade For The Flat World
AS THE WESTERN WORLD GROPES FOR GROWTH, A FLATTENED GLOBAL ECONOMY OFFERS INDIA ITS NEW MOMENT UNDER THE SUN
Arindam Bhattacharya

WHAT IS COMMON between BYD of China, Indofood of Indonesia, Gazprom of Russia, Embraer of Brazil, Nemak of Mexico and Tata Chemicals of India? Yes, these are all companies from Rapidly Developing Economies (RDEs) but perhaps more importantly they are all global leaders in an industry - BYD in nickel cadmium batteries, Gazprom in natural gas production, Embraer in regional jets, Nemak in aluminium die castings and Tata Chemicals in soda ash. These companies, and many more of them, who we call the new global challengers, are shaping a new era in the world of business. This is not the first time in recent years that a new wave of globalising companies have changed the dynamics of their industries. Japanese companies did it in the automotive industry in 1970s and 1980s. Koreans did it in consumer electronics and durables in 1990s. But it is perhaps the first time in the history of business - there are so many countries and so many companies who have jumped on the bandwagon at the same time, which we have captured in our recently launched book titled Globality - Competing with Everyone from Everywhere for Everything - that Indian companies like Tata Chemicals are at the forefront of this wave. So what is the difference between Globalisation and Globality? Globalisation was a one-way street, with the western firms (whom we call incumbents) moving 'west to east' out of their home markets in search of cheaper labour and raw materials. Globality is more like a spaghetti junction where 'roads' from all directions bring 'challengers' into the 'game' as active players. And these challengers are taking on the incumbents for markets, financial resources, technologies and talent - literally everything. For incumbents, the era of globality poses three unique challenges to their current business models and challengers can exploit their origins and the access to the world's resources to build competitive advantage. First is the battle for leadership in the fastest growing markets which are the home markets of the challengers. These markets are fundamentally different from developed markets. These have a very large number of value sensitive 'mid-market' and 'next billion' (NB) customers. Mid-market customers need products at prices which are often 50% or lower than prices in developed countries. The NB customers, routinely ignored by marketers, are those who reside above the poverty line in often difficult to reach localities and consume over a trillion dollars of goods and services with significant portion of that as discretionary purchase. Many incumbents have found that they do not have the right products or business models to target these customers. Winners segment and understand these consumers, design innovative products that are adapted to each segment needs and exploit , not fight, the complex distribution systems. Not only do they bring 'rapidfire' innovation into the market like Amul, they introduce products that try and change the nature of competition like Bajaj Auto has tried to do with their 125cc motorcycle XCD or Tata Motors plan to do with Nano. They re-engineer the entire value chain to bring products and services into the market faster and cheaper than their competitors like Aravind Eye Care. These challengers don't have big R&D budgets, enormous databases of knowledge, shelves stacked with prototypes, or thousands of patents on file. What they do have is ingenuity ? the ability to leverage access to the world's knowledge and customise it in a highly efficient way to win in their home markets. The second battle of globality for the incumbents is to go beyond simple cost arbitrage of low cost country based manufacturing or services (more commonly known as offshoring) and construct globally advantaged and integrated value chains. It is not enough to source low cost products from China or services from India or assemble them across the borders in Turkey for European customers. Challengers have again a natural advantage in that they are located in the low cost countries and do not have the huge issue of legacy assets which incumbents face in restructuring their value chain. But to be a winner they will need to exploit their home country advantage to the fullest through strategies like super-scaling like Reliance has done, or power of clusters like many Indian pharma companies are doing. They have to rethink their value chains, breaking them into discrete elements, positioning them in the most advantageous global location and then folding them into their business processes in a way that makes distance and location seem almost irrelevant. Bharat Forge has developed a unique approach that it calls dual-shoring - an approach that enables the company to deliver low-cost, high-quality products and services to customers throughout the world from at least two manufacturing facilities, one of them offering a cost advantage and the other an advantage of capability or proximity. The third, and perhaps the most difficult battle for incumbents is to build a talent pipeline and organisational and leadership model that fits a world that is far from 'flat'. The biggest theoretical advantage that India and many other RDEs have is the seemingly inexhaustible pipeline of young people while in the developed economies the talent pool is shrinking and wages rising. The reality is far more complex. India and other RDEs also face real shortages of many kinds of talent in a variety of industries and markets. What's more, even where human resources are available, there's still a struggle involved in aligning the right talent with the work to be done and getting the optimal number of people with the right capabilities to do the required tasks in the right places at the right times. Indian IT companies like TCS and Wipro have shown how to take advantage of these constraints by building their own people pipeline via alliances with local colleges and foreign universities, huge physical and e-learning based training programmes for both entry level and continuous development, and internal 'market place' for talent where candidates can apply for new projects and new roles. In the era of globality, organisations that move fast and do not suffer from the 'not invented here syndrome' will win. Challengers have achieved rapid growth through mergers, acquisitions, alliances, and partnerships which has enabled young companies, former state-owned bureaucracies, and mid-sized firms to rapidly learn, quickly gain a range of capabilities, and, almost overnight, make the giant leaps forward they need to bring themselves into the contest or pursue a leadership position. Suzlon came from nowhere to be amongst the top players in wind energy through a combination of acquisitions and smart partnerships with Western producers. The winners in globality have to move beyond the idea of 'oneness' - the one best way and the single global strategy - and instead live with and thrive on the concept of 'manyness'. Many countries, economies, markets, locations, facilities. Many strategies for different cultures, products and services, customers and competitive situations. Many kinds of backgrounds, skills, talents, ideas, organisations, systems, and states of being. Manyness is an uncomfortable concept for many incumbents who look for the single best way, the ideal organisation structure, the signature leadership style. Tata Chemicals has three centers - one in India, one in UK and one in the USA, reflecting its origin and acquisitions they have made. Each center has local and global responsibilities. Many incumbents will claim this is a recipe for disaster but Tata Chemicals believes that this not only allows them to leverage capabilities across the organisation, but also allows them to retains top talent in the company and allows faster decision making due to ownership at the local level. Leadership in the globalisation period of the past two decades was difficult, no doubt, but for the incumbents the challenges were relatively well-defined and its forms of success relatively well-understood. Leaders of incumbents had a large body of literature and learning to draw upon more than a century's worth of wisdom and practical advice about how to manage and lead Western-style companies. The leaders of these new challengers from India and other RDEs do not do new things to win in the market place. They do things differently, rooted in their unique culture, the constraints of their environment, their different starting point as a 'player' and last but not the least, very different leadership styles and the ambition to be a leader in the era of globality.

Arindam Bhattacharya is a partner at Boston Consulting Group (BCG). He is the co-author of Globality: Competing with Everyone from Everywhere for Everything, along with BCG senior partners Harold Sirkin and Jim Hemerling.

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