The Hindu Business Line : ‘India@75 has the makings of a global leader’

India is home to over 30 of the ‘Fortune 100’ firms. It accounts for 10 per cent of global trade. It has the largest pool of technically-trained manpower anywhere in the world and is a source of global innovation and the world’s benchmark on how to cope with diversity. This is ‘India in 2022’ as imagined by management guru, C.K. Prahalad.

These are the big opportunities that Prahalad has identified. When exploited, these opportunites would change the influence India has around the world.

“They are not audacious goals. May be tough, but not impossible,” he assures.

How do we get there?

Prahalad does not stop with imagining. He comes up with ways and means to make his dream come true. What should one do to get there? According to him, one should not take the limits of one’s vision to be the limits of the world.

“Think differently from the way you have been thinking so far. Imagine India@75 as I had described and fold that future in rather than extrapolating the past,” he suggests.

Firm foundation

The key to becoming a global leader must begin by creating shared aspirations supported by creativity, innovation, entrepreneurship and, of course, commitment.

India must move with small, clear steps, and a sense of urgency and purpose. As a first step, it must turn its population into a distinct advantage. India has the potential to build a base of 200 million graduates – a portfolio of educated people in every discipline — which is just 16–17 per cent of the country’s population. Besides, it can create a base of 500 million skilled technicians. This must be the starting point for global leadership. “This is possible in 14 years,” says Prahalad.

Of course, it comes with a rider — “if leaders of this nation focus on this goal as a priority”. However, he did not fail to admire the National Knowledge Commission under the leadership of Sam Pitroda, calling it a good start.

Addressing a gathering drawn from India Inc and bureaucrats in the Capital, he said India has to succeed in its educational mission, “to realise the rest of my vision”.

He was speaking at a seminar organised by the Confederation of Indian Industry recently.

The issue is not resources but the balance between aspirations and resources, he argues. It is the conscious misfit between aspirations and resources that creates innovations and entrepreneurial energy. “We need a radical rethink of policies and practices.”

Next, not best practices

India needs to focus not only on best practices but also on “next practices” by amplifying weak signals towards a new pattern of opportunity.

“If everybody benchmarks everybody else, we will gravitate towards mediocrity. So I suggest a focus on next practices. We must have the courage to pursue them,” says Prahalad.

All this may not be possible without a proper understanding of the socio-political and economic context. He identified six areas that will be crucial for India to realise her potential:

A shift from abject poverty to income inequality; a shift from income levels to life style measurement; changing the price-performance envelope; a shift from low-tech solutions to universal access to high-tech solutions; provisioning of products and jobs for ecological vitality; and focus on governance.

These six issues cannot be ignored. “All development must embrace these constraints and be treated as non-negotiables,” he said.

Though India has reduced abject poverty dramatically during the last decade, there are still over 380 million people who live on less than a-dollar-a-day, which “we can safely assume would improve in the next 14 years”.

But, he says the important consequences of rapid economic growth and globalisation of the economy are the lags and asymmetries in the benefits that result. Some sections of society such as people working in the IT industry will benefit and some such as illiterate labour in rural India will lag behind. “This is not a uniquely Indian phenomenon. It is also true of large economies undergoing rapid structural adjustment as in the US.”

The solution to this situation is not going back to the traditional approaches but to reducing income inequality by taxing the rich and subsidising the poor.

He says people must be given the opportunity to move up the economic hierarchy, which he calls ‘income mobility’.

“We want rapid economic growth with high income mobility and lower income inequality,” he prescribes.

India needs to focus on achieving lifestyle equality by check social unrest created by income inequality. This can be done by changing the price-performance envelops. One must focus on a fundamental change in the price-performance levels of all products and services.

Companies develop products with different performance characteristics for different segments such as the rich, the middle-class and the poor.

“Detergent which irritated your skin was acceptable for the poor. There was no need for LPG for the rural poor,” he cites these examples saying “there is an invisible but distinct price-performance correlation as we move from the poor to the rich segments.”

Human development index

Focussing on scoring better on the human development index through quality governance would also help build an inclusive society.

He blames corruption for the country’s poor performance on human development. From the corruption perception index and GDP of various countries, one can make out that corrupt countries are not rich. “The more you invest in your human resources, the richer the country gets.”

He says, in India, the poor quality of human development is not about a lack of resources, but about the level of corruption in the deployment of resources.

A nation does not get rich first and then becomes less corrupt. A country becomes less corrupt before it gets rich. So, there is an urgent need to check corruption.

Unless corruption at all levels is dealt with with the seriousness of treason, it will be a very slow process of change, he asserts.

This transformation is not about resources. It is about our confidence in building a new India.

Imagination and belief in the country’s true destiny, the passion, the courage and certainly an “enormous dose of humanity and humility” is what we need to succeed.

“If India@75 fails to become a global leader, the only reason for that failure will be Indians themselves,” he said.