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Guest Skyped-Lecture to U-Tokyo Graduate Students on 'Indian Economy & Business'
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INDIAN ECONOMY & BUSINESS
CHIRANTAN CHATTERJEEIIM BANGALORE
GLOBAL BUSINESS STRATEGY & POLICYUNIVERSITY OF TOKYO, GUEST LECTURE
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THE SOLOW GROWTH MODEL & CONVERGENCE
US
Country J Country XLog y
Time
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WHY HAS INDIAN ECONOMIC GROWTH SLOWED DOWN
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THE ECONOMIST TRUMPETED INDIA THROUGH THE LAST DECADE
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
India
1 0 0 0 0 0 0 3 1 3 1 1 2 0 1 2 2
China+India
0 0 0 0 0 0 0 0 1 0 0 1 0 2 0 0 0
China
1 1 3 1 2 0 3 3 4 2 2 2 3 4 1 4 1
0.51.52.53.54.55.5
IndiaChina
China & India on Economist Covers
Source: http://www.economist.com/printedition/covers?print_region=76975&date_filter[value][year]=1997
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INDIA WAS HAVING A HORSE-RACE W/CHINA NOT SO LONG BACK
Source: Economist
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BUT INDIA HAS SLOWED DOWN SINCE THEN
Source: Economist
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PART OF IT RELATED TO GLOBAL SLOW-DOWN
Source: Economist
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BUT A LOT RELATED TO ‘THE LOW HANGING FRUITS BEING GONE’
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WHAT’S NEEDED NOW IS STRUCTURAL TRANSFORMATION
My view is that one should add ‘Governance Mode to it’.
GOVERNANCE BY DECREE
GOVERNANCE BY
CONSENSUS
Source:
http://www.sss.ias.edu/files/pdfs/Rodrik/Research/Structural-Change-Fundamentals-and-Growth-An-Overview_revised.pdf
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CREATIVE DESTRUCTION & INDIAN MARKET-LIBERALIZATION
Source: http://www.voxeu.org/article/transformation-india-incumbent-control-reforms-and-newcomers
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HOW ABOUT SUB-NATIONAL VARIATIONS?
Source: Economist
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NEED FOR HOMOGENEITY FROM SUB-NATIONAL HETEROGENEITY
Source: World Wide Web & Indian Census
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NEED FOR HOMOGENEITY FROM SUB-NATIONAL HETEROGENEITY
Source: World Wide Web & Indian Census
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SO WHERE ARE THE ACCOMPLISHMENT STORIES IN INDIA?
Hope springs eternal: RELATIVELY FREE-MEDIA: 360 independent television
stations in India. THE POPULATION JUGGERNAUT: In 2010, the Indian Labor
Report estimated that in the next 5 years, 25% of the world’s new workers will be Indian.
ENTREPRENEURSHIP SUN-RISE INDUSTRIES SOCIAL-LEADERS INDIAN EDUCATION SYSTEM: IITs & IIMs (more needs to
be done though).
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TRANSFORMATIONAL MEDIA
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BOLLYWOOD IS ONE OF THE LARGEST EXPORTING SECTORS
Source: Deloitte Analysis
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INDIA’S GROWING WORKFORCE
Source: http://www.skope.ox.ac.uk/sites/default/files/WP111.pdf
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IS ENTREPRENEURSHIP A WAY FORWARD?
Source: http://www.knowledgecommission.gov.in/downloads/documents/NKC_Entrepreneurship.pdf
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SUNRISE INDUSTRIES E-COMMERCE (in all sorts of areas) BIOTECHNOLOGY (Especially medical devices) MANUFACTURING Related areas INFRASTRUCTURE SOLUTIONS for India's growing cities LOW COST SOLUTIONS FOR INDIA & WORLD’S POOR (in
Health/Sanitation/Electricity/Transportation/Education) Strong Need to Harness Innovativeness of GLOBAL INDIAN
DIASPORA. I think INDIA HAS MISSED THE BUS for software products &
it’s a waste of time/energy to invest/retrain in comparative advantage in the same.
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SO WHAT HAVE WE DONE SO FAR Low-Hanging Fruits won’t be enough.
That India needs Structural Transformation
That there are sub-national heterogeneities and institutional voids that needs to be ameliorated.
That hope springs eternal from: relatively free media. young labor-force entrepreneurship sun-rise industries.
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SOCIETAL & BUSINESS LEADERSHIP
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INDIAN EDUCATION
https://www.youtube.com/watch?v=TYyIE3tstJ4
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KEY ISSUES TO WATCH OUT: INTERNAL MIGRATION
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POLICY CONSISTENCY FROM CHANGE OF GOVERNMENTS
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ACCOMMODATIVE CAPITALISM
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ACCOMMODATIVE CAPITALISM
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ACCOMMODATIVE CAPITALISM – PERHAPS INDIA CAN SHOW THE WAY?
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CO-REINVIGORATING ASIAN ECONOMIC CENTURY
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AMAZON IN INDIA – MINI-CASE DISCUSSION
My key lessons there would be: India is a tricky market, almost like a SCIENTIFIC LABORATORY, no harm in
PROTOTYPING BEFORE FULL-BLOWN ENTRY in this kind of a market. You can be a SECOND OR A THIRD MOVER IN INDIA AND CAN STILL BE
SUCCESSFUL with the strength of your complementary assets. India needs INDIAN SOLUTIONS to solve its market-puzzles. Look at how Amazon is
introducing delivery-innovations. Reminds you of 7/11 in Japan there? Or cash-on-delivery. Some Indian solutions could be SCALABLE TO EMERGING-MARKETS more broadly,
so sometimes it might be wise not to ignore this laboratory, what succeeded in India could potentially also succeed in Brazil too!
India could also be a RIPE MARKET FOR ACQUISITIONS – but be CAREFUL ABOUT VALUATIONS of firms, there has been a few sour examples recently as we all know.
Finally, there is a TON OF HETEROGENEITY, ON THE REGIONAL, CUSTOMER AND CONSUMER SIDE – which each firm needs to either needs to creatively solve or do something about bringing homogeneity in the markets.
