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Re: The Great Opportunity for India

Please help make the Manifesto better, or accept it, and propagate it!


Hi, I had put up the URL as the part of the subject. However, it seems
to have been truncated. Anyway, here is the URL:

--- Raju Agarwal <krantikari@hotmail.com> wrote:
> what is the source of this article? could you provide a link.
> >From: Ashish Hanwadikar <ashish_hanwadikar@yahoo.com>
> >Reply-To: debate@indiapolicy.org
> >To: debate@indiapolicy.org
> >Subject: The Great Opportunity for India -
> >Date: Tue, 5 Mar 2002 21:09:29 -0800 (PST)
> >
> >Please help make the Manifesto better, or accept it, and propagate
> it!
> >
> >IPI_Marker
> >
> >Hi all,
> >
> >Read the great article on "new" economy - The People Economy.
> >
> >I think what we are experiencing today is what Europe experienced
> >during Industrial Revolution. We have an "Services Revolution".
> Today,
> >list of millionaires and billionaires is dominated not be 70 year
> >industrialists but 50 something Bill Gates and Azim Premiji.
> >
> >The new Economy - The People Economy - has a very profound
> implications
> >for India. We have to seize this opportunity. Its the only
> opportunity
> >for millions of people living in poverty to escape from it. So
> instead
> >of whinning about "cheap imported goods from abroad", high cost of
> >capital in India, or worry that foriegn capital will cause
> speculation
> >and volatility or protecting domestic farmers and industries from
> >unfair foriegn competition we should gear ourselves to seize this
> >opportunity.
> >
> >Uptil now, we were living in an economy dominated by Capital.
> Capital
> >was a major requirement and lack of Capital a major impediment for
> >development and growth. However, with huge overcapacity in various
> >manufacturing sectors like Cement, Steel, Automobiles etc. it is not
> >the Capital that determines the success but the innovation, talent,
> and
> >knowledge that determines the success or failure.
> >
> >Earlier, innovation and development of new technology like say steam
> >engine was once in a decade affair. Thus, once the technology gets
> >popularized, all one needs to have is savings, a system (like stock
> >market and corporations) that can channel and pool together the
> savings
> >and deploy them as Capital. The one who produces the products at a
> >faster rate and with least amount of costs is the winner. This was
> >because the products were related to basic amenities like clothing,
> >housing, food etc. So, identifying the needs of the customers and
> >targeting them (Marketing), convincing them to buy the products
> (Sales)
> >were not critical to the success. You don't have to convince the
> >customers to buy your products if there is not much choice and
> people
> >desperatedly wanted the products as basic necessities. Thus, access
> to
> >capital, physical transportation (port, Airport, roads etc.)
> determined
> >success. Services like doctors, financial consultants, teachers
> (most
> >people used to complete high school, take a diploma and join work
> >force), hair dressers, entertainment were costly and were not easily
> >affordable to millions of people. Because fulfilment of basic
> >necessities was a priority. Poor people spent most of the time
> working
> >in the factory. However, the situation has changed and is changing
> >rapidly.
> >
> >With tremendous improvement in technology and thus corresponding
> >increasing in production capacity there is suddently a huge glut in
> >consumer products. Thus, capital is no longer in great demand. Also,
> >with basic necessities satisfied in the developed countries, savings
> >also increased. The capital is no longer in short supply. Together
> with
> >huge supply and low demand of capital means decreasing return on
> >capital investments.
> >
> >That means, talents of people who identify specific customer needs
> and
> >target them (Marketing), convincing and educating customers about
> their
> >products vs. competitors (Sales), rapidly customizing manufacturing
> to
> >suit customers taste (Software rather than Hardware), maintaining
> >customer relationship, supply chain (Web and Internet) etc. has
> become
> >very critical. Not only that, with basic necessities taken care of,
> >people in developed world spent more for entertainment (sports,
> movies,
> >art, music etc.) and other personal services (hair dressing etc.)
> than
> >on basic goods. They are also living longer which means more
> >requirement for nursing, elderly care, financial advice (if you live
> >longer in retirement you need advice on handling), insurance etc..
> This
> >business is not that capital incentive, plus whatever capital is
> >required is getting cheaper. Here personal qualities like talent,
> >honesty, sincerity, punctuality, respect, style etc. matter more
> than
> >anything else. Plus, the competitive advantage lies with the
> talented
> >people and not with the Capital. Thus, more and more portion of the
> >returns of the companies go to these talented people rather than
> >shareholders. This has given rise to a huge services sector. It is
> >growing faster than Agriculture, and manufacturing. Also, since
> talent
> >is highly differentiated and intimately a part of the person, it is
> >very difficult for capitalists to exploit it (when you leave a job
> you
> >take your talent with you. Also, finding similar talent is difficult
> >and costly). Plus, employess develop strong customer relationship.
> That
> >means, if they leave they take their customers with them. In fact,
> lack
> >of personal touch in the customer service in the developed countries
> >because of shortage of talent is the primary reason that countries
> like
> >India will benefit tremendously.
> >
> >I am really concerned that even though this presents a unique
> >opportunity to the people of India, we are still obsessed with
> >equality, socialism and continuously crib about high cost of capital
> >(even though rest of the world is figuring out how to get more
> returns
> >from their excess capital). We might miss the boat if we continue to
> do
> >that. We need to gear our system (labour policies, infrastructure
> etc.)
> >with this in mind and stop bothering about protecting ourselves from
> >"unfair competition". In fact, let the other countries supply us
> with
> >their cheap consumer goods and agricultural produce (which they have
> in
> >plenty) and cheap capital. We will supply the talent and reap the
> >benefits. No need to reinvent the wheel by building our own
> capacities
> >for producing the same products that the world already has in
> plenty.
> >If we allow free imports of consumer products poor will benefit
> because
> >of lower prices. They will come out of poverty early and will be
> able
> >to invest those savings in education to take advantages of
> "services"
> >business. Poor people will increase invest in Education not by our
> >continously telling them so but because they can save on their basic
> >necessities by buying cheap foriegn products and because of
> increasing
> >salaries in the service sector. Combine this with the ageing
> population
> >in the developed world which means almost no or little competition
> from
> >them.
> >
> >If we allow cheap foriegn capital to come in poor will benefit
> because
> >we have tremendous amount of hardworking, talented people. The
> >combination of cheap capital and human resources and
> telecommunications
> >and internet infrastructure will allow us to market and profit from
> >huge number services like: medical transcription, proof reading,
> >editing, language translation, software development, etc. just to
> name
> >a few. In fact, anything that is connected with processing of
> >information is good for India. Anything that is related to service
> like
> >entertainment, teaching, consulting, medicing practice etc. is a
> great
> >opportunity. Imagine when the high cost of medical care for the
> ageing
> >population forces developed world to allow medical consultation
> through
> >email and internet. What an opportunity for India! We should be
> really
> >be prepared for this. Our Govt. should be designed to protect and
> >honour "services" agreement instead of worrying about complicated
> >labour laws. That will make India an attractive destination for such
> >"outsourced" services.
> >
> >Hope we will seize this historic opportunity.
> >
> >I have included just few lines from the article. Lets have some
> serious
> >debate on this article.

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