A New World

Published in Books & Authors (Daily Dawn) on August 3, 2008

Original Link

Billions of Entrepreneurs
By Tarun Khanna
Penguin Books, India
ISBN 0-67-008148-5
353pp. Indian Rs595

Reviewed by Ayesha Hoda

‘Far better to be wise and informed about changes the world over than to be the ‘fool…who tries to hustle the East’.

Is the theory of the American Empire still relevant? Or are we heading elsewhere for economic and cultural gains? Is it time to discover the new destinations the world has chosen?

Overlooking China and India is impossible, rather a flawed stance if taken by any country, as the spotlight for billions is shifting from New York, London and western capitalism. China and India are now in focus as two of the world’s fastest growing economies, with populations having reached a cumulative figure of 2.4 billion.

How these countries have metamorphosed into emerging markets and how they will reshape the global economy (and in turn politics and society) in the near future, are subjects of great interest today. Therefore, generally speaking, it is about time that the West (America in particular) seeks a broader view of the East and discovers that the two great civilisations of India and China mean more than lo mein and chicken curry, Jhumpa Lahri and Yu Hua, Bollywood and Bruce Lee, Taj Mahal and Great Wall, as Tarun Khanna points out in his vividly written book.

Khanna has a PhD in business economics from Harvard University and is presently Jorge Paulo Lemann Professor at Harvard Business School. He also works with multinationals, indigenous companies and investors in emerging markets worldwide. His book reflects the wide range of experiences he has had and he provides readers with numerous examples of cultural stereotypes (‘the vigorous and smiling Chinese or the lassitude and repression of the Indians’), as well as perspectives of people from China and India or those who have been associated with the same.

His aim is to do away with the vague and skewed images that people relate to these two Asian giants and emphasise the need to study about China and India and establish fruitful, mutually beneficial links with both.

With a refreshing sense of neutrality and a smooth flow that defines his style of writing, Khanna also draws links between China and India. By citing examples from ancient and modern history, he illustrates how elements of each country’s distinct culture are entwined in the roots of the other (such as in the chapter titled ‘Monks and Merchants: The Indianisation of China’). He makes apt comparisons between their strengths and weaknesses (such as in ‘Why China Can Build Cities Overnight and India Cannot’, ‘Bias & Noise’ etc.) and accurately states that ‘the countries are inverted mirror images of each other.’

With Sino-Indian hostilities finally diminishing after four long decades, it is imperative that not only the world should understand the Indian and Chinese markets but that these two countries should also be keenly familiar with each other’s work practices and laws, socio-political culture, corporate ideology and organisational philosophies.

China can learn how to better manage its equity markets from India, whereas India can learn to appreciate and profit from its diaspora in different countries — the way China has been doing with the non-resident Chinese. Through the analyses presented here, it is clear that economic interchange will lead both nations to new avenues and brighter horizons: ‘Distance no longer hampers scholarly, intellectual, and commercial cooperation.

The first direct flight from Beijing to Delhi began in March 2002, and direct flights are being planned from secondary cities in China to secondary cities in India. The future looks brighter already.’

This book can serve as an introduction for those who are still unaware of the immense potential of making money in China and India. It gives a fair idea of how many adaptations foreign companies, entrepreneurs or exporters may have to make with respect to indigenous ways of doing business, government regulations, political climate and so on, as happened in the case of the giant company Microsoft, which was asked to ‘study Chinese culture to appreciate how to deal with the Chinese.’

It is also necessary to realise that if any company wants to build a long-term position in either country, then it has to pay specific attention to local welfare and broadening the scope of corporate responsibility to meet local needs.

Khanna comes across as a natural storyteller, and his personal experiences and observations make the book even more engrossing by bringing it closer to reality.

He has meticulously sourced the book and there are chapters on topics as seemingly distinct (yet linked) as Buddhism, outsourcing, General Electric’s corporate bridges, freedom of media, diaspora management, medical tourism and so on, sprinkled generously with several seminal ideas (China’s hard power versus India’s soft power, etc.), which can be subjects of further discussion.

Diversity resonates throughout the book, as a symbol of the diversity that is a distinguishing feature of both India and China. An atypical treatment of the subject-matter makes Billions of Entrepreneurs not only thought-provoking and informative but also a pleasure to read.

Understanding Emerging Markets: Building Business BRIC by Brick

Published in Books & Authors (Daily Dawn) on October 28, 2007 – Original Link
Understanding Emerging Markets: Building Business BRIC by Brick
By Stefano Pelle
Sage Publications, New Delhi, India
ISBN 0-7619-3557-6
246pp. Indian Rs295

Brazil Russia India China (BRIC), as per Goldman Sachs, are moving in the direction of capitalism and globalisation, as Emerging Countries (ECs), that is, countries with rapidly developing markets and high growth rates. Fifty years into the new millennium and they are projected to be the four most dominant countries of the world, with a not-so-communist China in first place. According to author Stefano Pelle:

‘A cheap labour force for the manufacturers, a ‘hungry consumer’ for the marketers and a long-term young population are peculiarities of the ECs.’

Pelle is vice president and COO, Business Unit Russia and South Asia of Perfetti Van Melle (an Italian multinational which is claimed to be the third largest confectionery in the world). His eight years’ work experience in India as well as his teaching experiences in institutes, in India and Italy, is reflected through his style of writing and grasp of the subject.

This book will serve as reference material for business students and to some extent, as a guide for entrepreneurs unaware of the potential of and the barriers to setting up business in either of the aforementioned countries.

Pelle has included examples and material from a wide range of sources. He has briefly touched upon the geo-political scenario in BRIC, ethical considerations, corporate social responsibility, the work climate, bureaucracy and the kind of approach to business and marketing strategies required for success. Cultural intelligence and sensitivity are said to play a key role in forming a solid base for any multinational, along with the use of local talent:

‘A person who has spent most of his career in the ‘protected environment’ of the corporate office of a well-structured organisation in a developed country, might not be the ideal person to be sent to set up a green field project in West Africa.’

Information is based on recent economic models. Even though Pakistan has been rarely mentioned, except when discussing Indian politics, one can clearly identify several characteristics of Emerging Markets (EMs) present here, such as the transition segment (emerging middle classes), low pay scales for labour, similar cultural values and so on. Moreover, after its report on BRIC countries, Goldman Sachs also presented its list of ‘Next Eleven’ (fast growing) countries, considering quality of education, investment policies, and macroeconomic stability and so on for the criterion. This list also included Pakistan and therefore, this analysis of operating a business in BRIC countries may serve as an example to investors and help them conjecture what is presently lacking, whether a move in favour of democracy and anti-war and anti-terror campaigns will be of any help and so on.

The author projects a win-win situation for ECs and the presently dominant economies (in the west), though the emphasis is on how western investors can best benefit from the situation, capture markets in ECs and thus, retain their global presence. However, with 40 per cent of the world’s population living in BRIC, if these predictions of sustainable development and economic prosperity do come true, they are no doubt, going to have a global impact.

Relevant and thought-provoking as the book is, the inclusion of Pelle’s personal work experiences would have added to it considerably, as it would then have more original and different examples for one to refer to and thus, wider readership. — Ayesha Hoda