India @ 75 C.K. Prahalad Paul and Ruth McCracken Distinguished University Professor The University Of Michigan My Vision for India @ 75 Actively Shape the Emerging World Order Through Economic Strength Technological Vitality Moral Leadership The Potential of India What India can be in 2022 1. World’s largest Pool of Trained Manpower: 200 million college graduates (16%) 500 million trained, skilled workforce (40%) Universal literacy Education : Stretch that allows us to innovate 2. World’s Leaders in Industry and Commerce 30 of Fortune 100 from India 25% of yester years we have lost 3. India Accounts for 10% of World Trade A broad scope of products and services 4. India as a Source of Global Innovations New Businesses , New Forms of Organization, New Technologies What India can be in 2022 5. Focus on the Bottom of the Pyramid as a Source of Innovations for the World (Leaders in Health, Education, Energy, Transportation, Sustainable Development for all) 6. A Flowering of Art, Literature, and Science ( 10 Nobel Prize Winners from India) 7. A New Moral Voice for People Around the World India as a country where Universality and Inclusiveness is widely practiced. India becomes the most Benchmarked country for its capacity to accept and benefit from its diversity Principle Number #1 The Essence of Entrepreneurial Transformation Situation A Situation B Resources Low High Aspirations High Low Principle Number #2: “Fold the Future In” Extrapolation Budgeting Orientation 2007 2017 / 22 Fold the Future in Innovation Orientation Principle Number #2: “Fold the Future In” 2007 2017 / 22 Clarity to Direction Willingness to Discover Clear Milestones Speed and Stamina: 400 meters at a time but a Marathon Principle #3: Focus on Next Practices Well Known Best Next Practices Practices Practices Amplify Weak Signals Focus on Here and Now: Tactical , Blocking and Tackling Focus on New Opportunities: Aspiration > Resources Folding the Future in, Focus on Next Practices Thinking Differently about the Here and Now India: Potential Vs. Reality 1. Incrementalism will not work. We need a Radical Rethink of Policies and Practices 2. Key to becoming a Developed Nation : Shared Commitment to Goals Creativity and Innovation Focus on Entrpreneurship 3. The essence of Entrepreneurship Aspiration > Resources The Emerging Context: 2005 – 2017/22 Agenda for the Session : 1. The Emerging Issues : 2007 – 2022 a. Abject Poverty to Income Inequality b. Income levels to Life Style Measures c. Unique needs to Universality of Aspirations d. Affordability to BOP to impact on Price-Perf. e. Low Tech. to Universal Access to High Tech. f. From BOP to “ Straddle the Pyramid” g. Provisioning Products and Jobs to Environment 2. The Emergence of a New Model of Development? The Paradox of Rapid Economic Development. Rapid Movement of Increasing Income people away from Inequalities Abject Poverty (e.g. G – Coeff.) ($1 / Day) China China India India The Emergence of Social Tensions Measures of Inequality: Gini coefficient USA China India Brazil South Africa 1985- 1986 + 22.4 32 59.3 1989- 1991 42.7 34.1 32.1 64 1995- 1996 45 39 33.8 60.2 1999- 2001 46.3 42 36 59.6 2006 46.9 47 39.5 57.2 59 + Inclusive Growth Means… 1. Elimination of Abject Poverty ( $ 1 / day?) 2. Reducing Income Inequalities ( G- coeff.?) 3. Eliminating Unequal access to opportunities 4. Changing Life Style inequalities 5. Reducing inequalities in Choice 6. Reducing inequalities in Share of Voice Inclusive Growth Means… 1. Elimination of Abject Poverty ( $ 1 / day?) 2. Reducing Income Inequalities ( G- coeff.?) 3. Eliminating Unequal access to opportunities 4. Changing Life Style inequalities 5. Reducing inequalities in Choice 6. Reducing inequalities in Share of Voice Redistribution of Wealth Vs. Wealth Creation ? Public Policy Focus Vs. Entrepreneurship/ Market Focus ? The Changing Value Equation Rich Price Middle class BOP Performance (Functional + Emotional) The Changing Value Equation $ 30 Cataract Surgery $ 35 DVD Player $ 30 Cell Phone $0.01 Shampoo in a sachet $ 2000 car $ 20 hotel Room Rich Price Middle class BOP Performance (Functional + Emotional) What are the Implications… Straddle the BOP Market New Pyramid? Price Perf. Levels for All Access to High Tech for all Explosive Growth in Market Size, Scale of Environmental Operations. Demands. The Focus on Price-Perf. Forces… 1. Scale : Local Responsiveness and Global Standards 2. Focus on Costs 3. Access to New Markets : Knowledge and Trust 4. Technical and Social Insights Emergence of a New Social Compact for Business: Collaboration with CSO; Private- Public Partnerships Let us Look at Data From Around the World 1. GDP/ Capita in PPP terms (Source : World fact Book,2002) 2. Human Development Index (Source : UNDP, 2003) 3. Quality of Governance : Corruption (Source: Transparency International, 2002) Selected 25 countries from very rich to very poor My Takeaways: • Human Development is not about More Resources but less corruption in the Deployment of Resources. • Good Governance (less corruption) leads to High Levels of GDP/Capita; not the other way around. • Focus on Human Development (Focus on Individuals) and not Groups’ Rights Leads to Rapid Economic Development (GDP/Capita) India as a Developed Nation : What is the Trajectory? 2003 2020 GDP/ Capita GDP/ Capita $2500 (PPP) $25000 (PPP) Rank in HDI CPI Rank Rank in HDI CPI Rank 127/175 2.7/ 10 20/175 7/ 10 How do we Correct the Trajectory? High 2022 Accomplishment Technological Economic ? And 2007 1947 Low Low High Commitment to Rights of the Individual, National Character, Universal Principles What are the Prerequisites: 1. Change in Mental Models 2. Data Driven not Dogma Driven Debate 3. Individual Rights not Group Rights 4. Principles not Rituals 5. Corruption is treated as Treason 6. Focus on Performance, Accountability 7. Imagination not Resources What Impact Does Poverty Alleviation have on the Environment? 1 Billion Micro Consumers Urbanization Creation of New Jobs- Micro producers Sustainability is multi-dimensional: BOP Experiences Environmental Impacts First Many Dimensions of Eco Systems will become Stressed… 1. Water: Quality of Water Availability, access Usage Mix: Agriculture, Industry, home 2. Energy Fossil Fuel and Substitutes Regressive to progressive Fuels 3. Health Phase II of India’s Development The Emerging Issues : 2007 – 2020 a. Abject Poverty to Income Inequality b. Income levels to Life Style Measures c. Unique needs to Universality of Aspirations d. Affordability to BOP to impact on Price-Perf. e. Low Tech. to Universal Access to High Tech. f. From BOP to “ Straddle the Pyramid” g. Provisioning Products and Jobs to Environment The Emergence of a New Development Paradigm? What are the Dominant Themes: 2007-2015/2022 1. Primary Market Based Solutions 2. Social Equity in Development 3. Rule of Law, Individual Rights 4. Scale 5. New Price-Performance Levels 6. Ecologically Sustainable Development The “Sandbox” for Economic Development Global Scale Innovation within These Constraints Market Based The “Sandbox” for Economic Development Global Scale Accountability for Performance Business, Politicians, Civil Society, Bureaucrats Market Based The Emerging World Order: C.K Prahalad’s view in 1989 USA, World Scale Europe, Domestic (2000) Japan Market China India ? China S.Korea, Small Taiwan Domestic India, Finland Market Brazil Switzerland Local Firms Global Firms The Poor of India are Ready for this Journey: Are the Leaders Ready?
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