Prof Jagdish Sheth, the 72-yr old Marketing/Strategy Guru was in XLRI Jamshedpur on Aug 4th, '10, and gave a talk to the XLRI students and faculty on "Chindia Rising"
It is in the self interest of India to partner with China, as collectively they are going to rule the world economic order over the next few decades. By 2020, China will be the largest economy in the world with India close on its heels; and the world economies must wake up to this fact urgently.” This was the theme of Dr Sheth’s talk at XLRI.
Chindia’ to rule the global economy: Jagdish Sheth
Professor Jagdish Sheth, from the Marketing department of Goizueta Business School of Emory University, spoke about the theme of his recent book Chindia Rising. According to Dr Sheth, the last two decades saw a fundamental shift in industrial growth from regulated markets in advanced nations to competitive markets in emerging nations such as India and China. The markets in Chindia are still under penetrated, with only 65 per cent of consumption coming from organised sectors. However, with the growth of what he described as the ‘Call Centre Couples’ the need for branded products is rising and the only limitation is affordability.
He described that there is a fundamental shift in global growth from regulated markets in advanced nations to competitive markets in emerging nations, in which India and China are playing increasingly important role. The global footprints of the Indian and China are growing, though in different manners. He described how China is growing through exports companies like Haier and Lenovo which were hitherto dominant only in Chinese subcontinent have expanded into the US and European markets with great success. Indian global growth, on the other hand, is happening through acquisition of manufacturing bases abroad, for instance, acquisition of Tetley and Corus by Tata, or take-over of Novelis by Birla’s Hindalco.
At the same time, he pointed out, the companies in Chindia, such as Airtel and Haier, have commercialised technological innovations from the West very well and are now increasingly going global in their ambitions.
Such changes, Dr Sheth pointed out will are leading to three major shifts which qualitatively change the way global business happens. The student fraternity and faculty were treated to a deeper understanding of the impact of these shifts - the race for resources, markets and geopolitical leadership - by Dr Sheth.
The race for resources includes the race for human capital, land etc and is driven by global expansion and cross-border mergers, rising investments in Africa, shortage-driven breakthrough innovations and so on.
The race for markets is shifting the economies from a domestic to a global level. This has resulted in the emergence of large consumer markets, shift of R&D to China and India to bring out affordable inventions, new products and services from fusion of cultures, etc.
Lastly, the race for geopolitical leadership is resulting in new strategic alliances such as the G-8 becoming G-20, the rise of multilateral politics, etc.
Dr Sheth dwelt upon the fact that India lost a golden opportunity when it rejected the offer from western nations to outsource manufacturing to India (due to its non-alignment policy) which allowed countries like Taiwan, Singapore, Japan to gain hold in low cost manufacturing. He, however, also pointed out that as the center of gravity shifts to Asia, it will also lead to a redefining of the nature of capitalism from a self-interest driven phenomenon to a “caring capitalism’.
Finally, Dr. Sheth said that contrary to popular belief, it would be in the self interest of India to become partners in trade with China so as to shift the balance of power from the Old Triad of US, EU and Japan to the New Triad of US, China and India.
“It’s vital for the students to get exposed to global trends and shifts happening across the globe, if they are to establish themselves as industry leaders of tomorrow”, said Professor Narsimhan Rajkumar head of Marketing department at XLRI, Jamshedpur.