Monday, December 10, 2007

Beating India and China at their own Numbers Game

Yes, China and India have huge populations - 1.3 billion and 1.1 billion by latest estimates. I am tired of hearing how they are the place to be because of these numbers. So here is a thought:

We have an economy that is five times as large as either of these - six billion to be precise. The car by India's Tata or the software by China's Kingdee has a very limited chance of being bought by people outside of their respective billion people markets. The Apple iPod has a potential market of 6 billion. The Microsoft Windows has a potential market of 6 billion.

Enough said. Now, stop complaining and go capitalize on the mega growth opportunity.

And let's not vote in people that want to shrink that market from 6 billion to 300 million.

17 comments:

Nithin said...

Whom are you referring to as WE man in the second paragraph....

Anshu Sharma said...

We, the participants of American economy. Actually, if you get the gist of what I am saying - its we, the participants of the Global economy be it in India, China or USA.

Nithin said...

Well I don't buy it..

you are definitely referring to the American Economy and identifying yourself as an American trying to be upbeat about your own economy..I am not arguing which economy is better..but the war cry that Lets beat the minnows and show them who we are attitude is sick....you cannot hide under the "We are all part of the same Global Economy" thing.

I would be fine if the post would have come from Scoble or Fake Steve jobs...but from an Indian..or is it an Ex-Indian..

sorry Dude
I am unsubscribing....

Anshu Sharma said...

I appreciate you leaving a note. I am not just an Indian (by citizenship and birth) or American (adopted country of residence). I am a global citizen too.

Its like asking someone to choose between their family and town, or town and country. How is choosing between a country and the planet any different?

I don't have to defend my Indian-ness or Amereican-ness. I wish to be judged as human being, rest are labels that don't do much for me.

Hope you reconsider after thinking deeper about this.

Nithin said...

The post comes without a context as the statement "tired of hearing how they are the place to be because of these numbers" is not linked or attributed to any WWW stuff..so it might be a personal or a professional issue...The Tata car might not be bought by the world but One should take pride in the country that you represent..May be on an idealogical level I differ but My feeling is that one should connect to his roots because at a certain level you represent your country...No matter what. Atleast the first generation
What did we give back to our country then?

Anshu Sharma said...

I suggest you read my other posts related to India.

http://www.anshublog.com/search/label/India

Read the one on Indian and Chinese banks being able to acquire American banks.

I call it as I see it. Its not about which nationality. Let the best product, service and talent win.

Jeff Nolan said...

Nithin,
Anshu should not have to give up being Indian in order to be an American, which is the fantastic result of the culture that America has created. But being an Indian-American is much different than being an Indian in America, Anshu is clearly identifying with the former and I applaud him.

Nationalism around goods is a false god of the highest order. As Anshu rightly points out, there is no product or economy that is not the beneficiary of the global economy, and as such it is foolish to look at absolute numbers (e.g. number of people) as a proxy for value. I would suggest you look at output and productivity.

Lastly, if you want to be nationalistic about anything, pick something meaningful like per capita literacy, infant mortality, lifespan, and protein consumption. These are far more powerful indicators of national wealth than whether or not there is a showroom in Kansas City selling Tata cars.

Anshu Sharma said...

Thanks, Jeff.

I suggest my readers to read this post by my favorite economist and blogger I Am Not Us. We Are Not Me.

Looking at the world through the lens of nation of birth, nation of residence or color of your currency is neither optimal nor right.

Nithin said...

Anshu,

I am a regular subscriber and read each of your post with great interest. But I still wonder how can one distance the country. May be I cannot as I chose to live here. If it is really talking about Global markets it is fine. But why downbeat another economy that India or China have a very limited chance. may the best product win or the service win...why can't India, China or Japan win..That win would be global too...Value for all.


Jeff,

I would not touch an Indian product which sells based on its nationality...I would still go for the best product,service that is available. If the Swadesi( The natioanlistic brands as we call it in India) companies need to compete on the quality of the toothpaste so be it.

And as far as developmental issues are there we are a country 60 years old which is more diverse than Europe...I am sure you will know with your SAP experience...We will surely get there..It is just a matter of the generation shift..
Trust our generation to sort out most of these issues...

jeff nolan said...

Nithin,
Generally speaking I have high expectations for India, which despite the disastrous effects of Nehru's socialism on entrepreneurs, remains highly entrepreneurial driven.

I fear it will take more than a generational shift. What isn't talked about much is the effects of class consciousness in Indian society, which despite the dismantling of the Caste System decades ago remains persistent in daily life.

Pushing more power to the regions and reducing the bureaucracy is beyond being essential, it's critical. That alone will take a generation as people with power are generally not inclined to give it up.

Lastly, India must address the 400 million people living is extreme poverty. Literacy and health care should be the highest priorities upon which this government is measured with regard to social services. The middle class that is the back bone of any modern economy is dependent on moving a large percentage of the poor into the middle class.

Anonymous said...

Whoa!

Nice discussion here.

Jeff - Nehru's socialism had it's benefits. It was good in that day and age - IITs, Public Sector steel plants, power plants, dam projects etc. along with massive job creation, housing and livelihood was necessary fuel for a young independent India. Anshu and scores of others in US are by-product of this establishment.

I can bet that 1-in-3 Indians living abroad has had their roots either as graduates of IITs or having grown up in a Public Sector establishment.

Nehru's daughter Indira Gandhi did not have the foresight to move the country to a capitalist economy. Instead she went about Nationalizing banks and establishing License Raj.

Read the book by Gurucharn Das - India Unbound to get a good perspective.
------------

Back to the topic -

I think what Anshu is saying is that most companies these days make their revenues in US, not in Emerging market. Though emerging market is where most revenues will come from in the future. So the 300million strong American economy cannot be neglected by anyone - Tata, Lenovo, Samsung etc.

Anshu Sharma said...

Jeff,
I agree that healthcare and education are the key enablers of success that will determine India's future. But I am not sure the government is the right vehicle for this - the last 60 years clearly don't suggest that the government can fix our problems. I am much more optimistic about the role private sector is playing both in healthcare and in education. The lower economic class people aspire to and can often afford to send their kids to private schools. But these private schools are not elite institutions but crowded small classrooms with teachers that actually teach - costing sometimes less than $5 per month. Compared to the dysfunctional public (governement) school system, with bigger classrooms and better educated teachers, parents still prefer the private schools as the public schools rarely perform despite better pay and facilities.

The voucher system may be the way to go for India.

This also gels better with my Libertarian leanings.

Nitin Goyal said...

Anshu,
Interesting post (not talking of the comments!).

Sometimes I wish there was life on other planets. We would have had companies not limited to the 6 billion earthlings, whose markets they have already straddled comfortably.

I posted something related on my Blog at http://nitnblogs.blogspot.com/2007/12/globalization-confusion.html
I can see your thinking matches mine to a large extent.

Thanks,
Nitin

Jeff Nolan said...

Anshu,
I agree! Which is why it scares the crap out of me that Democrats talk about healthcare reform!

In re-reading my comment I realize that I lacked the clarity to suggest that I believe governments should be measured on the points I raised, but doing so by creating the conditions by which the private sector can respond to regional needs. In other words, yeah vouchers! Wish we could get them in California for K-12 schools.

vinnie said...

Nithin, if you know anything about immigration, then you know the burden first generation immigrants have with a foot in each culture. Last thing Anshu needs is a lecture on that.

Anonymous said...

Anush,
You may be a global citizen, well educated living in a developed economy, but i feel sorry for your ignorance.

Anonymous said...

voucher system ...

One such proposition in California did not approved.

Who will pay for the vouchers? --Government?
How? -- By raising taxes?

Who qualifies? -- Low and middle income group?

I would think Anshu should be proposing ... going the TaaS (Teaching as a Service) way to get good Private education. Trim the administrative costs, pay the teachers, outsource maintenance, make everything electronic and share classrooms.

Some schools in India already do this. They run multiple shifts in the same infrastructure. Teachers have the choice of teaching multiple shifts or the school can hire more teachers one for each separate shift.
- Pretty innovative.