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October 26, 2004
India
I have just landed in Hong Kong after spending a week in India and Singapore. It was utterly surreal to be dropped into India straight from the Upper West Side of New York City. I feel slightly strange even now about the experience, sitting high atop the Hyatt overlooking Hong Kong's Victoria Harbor, wondering why I am so optimistic about India's prospects despite the grinding poverty I witnessed.
One's initial impression of India is shaped by the bump and grind ride in from the airport in Mumbai. On the hour and a half journey, you ride past a slum that contains over two million people who are living without running water and often without walls, a ramshackle tent and iron siding sub-city. In the central city are architectural wonders such as the Central Train Station and High Court, reminders of the colonial period, part of the so-called Golden Mile financial district, now a bit down at the heels, looking their age. Mothers walk up to your car holding new borns, asking for money. Even so, perhaps because I have seen the change in China, from the time I went as a newlywed to Shanghai in 1986, where one could see the same kind of decay, I am now a believer in India.
This week I met aggressive entrepreneurs who head vibrant local companies in package goods, pharmaceuticals, auto/tires, and textiles, with their local entries often beating global brands on the basis of lower price and better value. I also met the chairman of Bombay First, which has been organized as a lobbying organization for business on the model of the New York City Partnership, to push for Bombay's fair share of federal spending (like NY City, Bombay gives much more than it gets back from the central government). There is no shortage of talent--seven business schools on the model of Harvard or Insead, hundreds of thousands of engineers expert in information technology. No wonder Microsoft and Veritas among others are moving R&D centers to Bangalore and Pune. This is much more than an outsourcing haven, it is a serious opportunity for low-cost clinical trials in pharmaceuticals or world-class clothing/fashion business.
The great unknown for me is whether a democracy like India can create the conditions in which business can flourish. The infrastructure problem cannot be magically solved--the road system for Mumbai was built in the 50s and is outmoded today, with 90 minute commutes from homes in the suburbs a regular feature of life. Global hotel chains like Hyatt have built their new properties near the airport, not in the central city, so that clients can avoid the hassle. The choices are difficult--disrupt existing neighborhoods by building modern highways from the airport to the center city, or accept the reality of eventual decay of the core.
India should also find a way to cooperate with, not compete against China, for foreign direct investment. Global companies need to be in both of these markets. It is a false choice for India to position itself as the service center and China as the manufacturing center. The entrepreneurs I met this week are ready to compete with anybody. I am convinced it will happen.
Richard
Posted by Edelman at October 26, 2004 9:30 AM
Comments
I recommend you visit Delhi on your next trip. It has changed dramatically in the last 10 years - and the infrastructure is far better than any other Indian city. I think this is the way most Indian cities will go over time. If Bombay reminded you of Shanghai 1986, then Delhi is certainly Shanghai 1991.
Posted by: Pranay Manocha at October 27, 2004 7:48 AM
Richard,
We sent a delegation to India a few weeks ago and came away with similar impressions. Bottom line is, all of our multintional clients are interested and so we are too.
Saw your mom and dad last night at a fete for Maurice held by the French American Cultural Foundation. Tough topic in NYC these days. Your mom is walking great.
Lou
Posted by: Lou Capozzi at October 27, 2004 8:51 AM
I believe that the infrastructure solution will fall into place as economic prosperity increases. Bangalore, for instance has made tremendous headway in this area. When I was in bangalore earlier this year, "fly-overs" were the concept of the day to bypass busy congested intersections and somewhat mimick the highways of the west. The enthusiasm and the talent inherent in the country will be able to overcome other obstacles.
Posted by: justme at October 27, 2004 9:03 AM
I have to read The New York Times to find a friend has started a blog?! I'm delighted you've joined us.
I enjoyed your reflections on India, but you don't really explain why there might be a potential conflict between democracy and flourishing business conditions. Surely you believe democracy is good for people and hence for business.
It might not offer the most direct route to decisions, but I don't think there's much evidence to suggest the performance of democracies is worse than dictatorships. In fact many economists would argue the contrary.
Posted by: Lance Knobel at October 27, 2004 9:49 AM
You think India is still bad now, you should have seen Mumbai (Bambay) back in the late 80's when I traveled extensively there to manufacture clothing. India has always been a manufacturing haven and does compete directly with China. It's wonderful that India has gained so much with its open market. Will China ever open up?
Posted by: Heywood at October 27, 2004 1:46 PM
I fear the opposite is going to happen. As China democratizes it will overtake India even more and perhaps even the USA. The reason India is not able to rise above the abysmal poverty has much to do with the desire to spread the wealth. India pays lip service to socialism but most Indians have no charity in their hearts for the poor. If India is to pprosper it mus spend more heavily on primary education. Also spraeding employment by having job sharing will help spread the wealth. vist any Chines restuarant and then an Indian. the levels of energy are so diferent.
Posted by: Jayant at October 27, 2004 1:51 PM
I have to agree that there is an aggressiveness to the entrepreneurial spirit happening in India, particularly among the younger generation. They recognize the global shift, feel its potential and are acting upon it. India is different from China in that they want to be a part of their own market development, as opposed to singularly handing the keys to foreign investment. That balance will hopefully allow India's culture to not be compromised along the way.
Posted by: j. patel at October 27, 2004 1:56 PM
This was a very interesting observation, as I myself had a similar experience as you had, but going from Upper West Side to Madras. My feeling was that education has flourished in South India, where economic conditions were a little better. In India, the poverty of slippers has not become a staple for a poverty of education.
I am very hopeful for the country, as it has been able to develop, being a democracy (which is hard for a country with 1 billion pop.). I also feel that India's cultural life and habits pose an altenrative to pure assimiliation of our western cultural and thought patterns. In fact, the whole of Asia is now turning this way, with people in Japan and China, slowly but surely demanding for a more culturally balanced life style.
Our core american values are beyond a belief in corporation, but a belief in assenting the rights of men and women, and giving everyone an opportunity to express themselves and attain a comfortable life.
Historically, China and India have collaborated, as a lot of chinese culture influenced india and vice-versa (sino-indian philosophy and culture). So I agree with you that once a democratic government is again in China, it will only benefit all asian countries to collaborate. Without a democracy, it can be harder, as cultural beliefs and political barricades (as currently imposed by the government of China) impose a distance between people.
Thanks for the very thoughtful comments! I enjoy reading your ideas.
Posted by: Ram at October 27, 2004 3:43 PM
Nice, up-close look. My view, though, is that we should pay attention to the American economy. The middle class needs serious attention: note all the social problems (teen pregnancy, drugs, divorce, financial dissolution, etc.) which bespeak the problem. If I were the CEO of a large corporation, I would fight to make America competitive. . . or I would figure the game was lost. The interesting challenge (to me) ain't globalization but revitalizing America.
Posted by: Todd Volker at October 28, 2004 11:04 AM
Interesting that you found India unsettling even after leaving and enjoying ( perhaps ) a rooftop cocktail overlooking Hong Kong's Victoria Harbour The simple answer is,of course, that India is unsettling to us Westerners and it is for that very reason I have a 6-month booking to India leaving next week. I actually want to be unsettled and India is like a giant mirror that reflects the insanity of the West with its culture of consumption, greed, high-level corruption etc.,etc., ( one could go on but it gets a bit boring after a while...you get the picture anyway ).
So India by unsettling also refreshes. The emergent soul sprinkled with India's colour,depth of life,vivid sanctity and realness can then return Westwards to face yet again the onslaught of media,spin,manipulation ( one could go on etc,...).
India lets you know where you are. That impression, with respect, may be what unsettled you.
Posted by: Sudharma at November 4, 2004 7:17 AM
From an Indian -
It (the blog) begs the question if the reader has been to India before (I would expect more in terms of expressions that speak to a more than cursory power of observation) or has any ties with South Asians on a personal level.
I read the presentaion and it seemed quite superficial in terms of showing an understanding of the true underlying dynamic of the Indian economic rennaisance.
Over the long run - it is irrelevant what the West makes of India - for better or worse. More importantly - what does India make of India and what does India make of the rest of Asia.
The first job for India is to establish parity with China economy-wise - and had the elections (the Indian one and not the one that occured here just the other day) gone the other way - the infrastructure challenge would have been addressed faster with the BJP. Second India needs to actively realign with the rest of Asia - as thats where the worlds power of ideas and creativity is bound to flourish in the next decades. Look west no further - having been forced to look West for centuries under the British - that cheek is sore. Third, India should keep on its aggressive education standards and for a change launch satellite institutions (IIT, IIS e.g.)of its own in other countries - Asia first, then perhaps Latin America.
Posted by: murthy at November 4, 2004 4:15 PM
Murthy,
You are right
India must focus on its economy
Government has to support
Posted by: Richard Edelman at November 11, 2004 4:48 PM
Jayant,
I am bullish on China too
Hard not to be
India spends big $ on education in general
And India has new energy
Posted by: Richard Edelman at November 11, 2004 4:59 PM
I missed this post and saw it now, maybe almost a month later!
Your general impressions on India are quite accurate. Oh. anyone can say that hey are superficial, but then in a country like India, one is always a little superficial. Even staying for 6 months in a slum does not save one from being superficial in a different context.
Your impressions of Mumbai (Bombay) are correct. A large chunk of the problems faced by Bombay is because of the political apathy that we have seen here for the last 10 years. The city is in the throes of a cultural dilemma, and old-timers and locals resist the uncomfortable changes that accompany aggressive globalisation. On the other hand, the proponents of modernization in Mumbai are not sensitive enough to the needs of the poor and traditional.
While Mumbai thus grapples with its economic and cultural issues, as another poster here has mentioned, Delhi has made major strides, as have Bangalore and Hyderabad. Bangalore and Hyderabad have turned into centres of education, IT and BPO and same has happened to the satelite towns of Delhi, Gurgaon and Noida. These last two towns were developed from scratch, and you will find almost all of the American and European companies there.
Bombay will always remain important as its still the manufacturing hub of India. Political vision will at some point start changing Bombay too.
You are right when you commented that the government must focus on the economy. But the last government which did the same was thrown out of power. Precisely the reason that I mentioned - balance it carefully in India. Too much focus on globalisation without visibly improving the lot fo the poor will lead to a backlash. The new government seems to be moving slow, but its because of lessons learned. In a country with such a vast gap in living standards between the rich and the poor, it is better to watch out, do things slowly, reform but iprove the lot of the poor, and yes, as you said, invest in education.
I am confident about India - as the changes we have seen happening in this country in the last 20 years - irrespective of the government in power - are breathtaking.
Cheers. Will keep reading your posts.
Matt
Public relations India
"http://pr-india.blogspot.com"
Posted by: Matt at November 15, 2004 11:27 PM
