Tuesday, July 16, 2013

Cal Poly MBA India Trip
Final Reflective Blog
July 15, 2013

-Joshua Bingham-

Since coming home to the U.S., I have been asked repeatedly by family and friends if I would return to India. About 99% of the time, I have responded with, “I don’t know.” As of right now, I still do not know. What I do know is that I consider this trip to be one of the most eye-opening and educational moments of my life thus far. The country of India is an entirely different world from what I have grown up in. All of the pre-departure meetings, book reports/blog posts, and discussions with individuals who have already been there, cannot fully prepare you for what you actually face when you first get off the plane. Every sight, smell, sound, and taste is an attack on your senses. You encounter so much all at one time that your brain cannot process it fast enough to catch up. For me, I felt I was numb to my surroundings a majority of the time. I witnessed everything, however I am still in the process of trying to understand all of it. To be honest, I do not think I ever fully will. However, from all of this activity and confusion I learned one very important lesson: STAY HUNGRY. Never stop pursuing your goals; because if you do, there is someone right on your heels ready to take whatever it is you were after.

In this final reflective blog, I will attempt to answer a number of the questions posed on pg. 12-13 in the GSB 563 syllabus to the best of my ability, and at the end I will return to the final statement I made above.

The most important thing I learned, in regards to the country and its position in the global business environment, and how it all ties into my MBA coursework would be jugaar. This word best describes what is taking place within the country. In terms a westerner might understand, I took it to mean, “innovation even with scarce resources and opportunities.” There are countless examples of this phenomenon throughout the country. Indian entrepreneurs and innovators are living and breathing this word every day as they adapt their business models to fit with the Indian market that is dominated by a strong culture and customs. For example, Biba clothing is a dominant force in the women’s apparel market because it continues to innovate with new products and materials that blend modern styles with classic cultural styles at prices that are affordable to the female Indian consumer. The company is not a multi-national that came into the country and set-up shop. It was created from humble beginnings and has grown into a major brand because its founder, Meena Bindra, adopted the practices of jugaar. At the time of its founding, the fact that a woman was running her own business was rare but her persistence and knowledge of what the Indian female consumer wanted is what allowed her company to grow and continue to thrive today.

The importance of continuing to innovate, and persevering even when one faces a lack of resources or opportunities is a lesson that cannot be taught in a business class. Over the course of my one-year program, I learned many of the fundamentals that make a business successful. Yet, you cannot teach innovation or perseverance in the face of obstacles. That can only be acquired through actual experience and Meena Bindra’s company, Biba, serves as an excellent example. This ties in well with the question of what Western product or service could be successfully exported to or offered in India. I think a lot of different products and services could be sold within the country. I felt while traveling around the country that Indian consumers are hungry for Western products. Despite this realization, for a Western product or service to thrive in the country, those who are attempting to introduce it must be aware of all the differences and difficulties that abound within Indian. Nothing is easy or straightforward, therefore a Western entrepreneur or company must adopt the practice of jugaar to make it work. Just because a Western product or service does well in the west, it will have to overcome significant challenges to be just as, or more successful in India. Groupon India, is a great example. The company is huge in the U.S., but within India it has had to adapt to different cultural phenomena in order to work. Like Biba, it has adopted the practice of jugaar and made the appropriate changes to how it operates to obtain a solid supplier and consumer base. For instance, many Indian companies were apprehensive about signing on with the company, Groupon India overcame this apprehension by signing up one of the largest and most prestigious Indian hotel chains, Taj Hotels, to show that they were worthy of notice.

In conjunction with the question from above, what Indian product or service that could be successfully offered to or imported into the U.S. is would have to be its commitment to customer service. The service we experienced in the country was incredible. Lemon Tree Hotels is the first company that comes to mind in this regard. This was also the most striking “best business practice” that I took away from our visit to the country. U.S. customer service is good, but Indian customer service is amazing. The hotel chain takes customer service to an entirely new level. They made sure that we had everything we needed and even went above-and-beyond when abnormal requests were made, like obtaining medicine for certain trip participants. They greeted all of us with a smile and friendly demeanor; and never balked at one single request. This would never happen in the U.S. So many American employees feel entitled to their paycheck and feel that bending-over-backwards to address a customer’s need is below them. What an opportunity for a U.S. entrepreneur. To provide customer service on the same level as Indian customer service in an attractive and affordable environment would revolutionize a number of traditional industries. Not only the hospitality industry, but healthcare, restaurants, and many more come to mind. With India, service is king because in a country of 1.3 billion people, the customer is king. If you do not make him or her happy, there are plenty of other places for them to take their money. That is a lesson many U.S. businesses could learn.

In summation, two of the lessons that developed economies can learn from emerging economies are innovation through adaptability (better understood as jugaar), and striving to provide unparalleled customer service. If done correctly, these two practices could easily set a U.S. company apart from its competitors. In comparison, many developing economies cannot easily adopt U.S. practices for numerous reasons. These include: cultural practices, infrastructure and resource requirements, education, access to capital, etc. Constraints like those just listed represent the major hurdles facing developing economies as they continue to try and break out on the global economic stage. In my opinion, it almost seems easier for U.S. companies to learn valuable lessons from emerging economies than it is for emerging economies to fully adapt the U.S. business practices that have proven so successful over the past 100 years. For those U.S. entrepreneurs who are ready and willing to learn new ways of doing things, there is a wealth of opportunities. It is up to them to take advantage of these lessons or else foreign companies, like Biba, Lemon Tree Hotels, and Puravankara will become much more dominant than they already are.

Returning to may actual day-to-day experiences in the country. When I first arrived in New Delhi, I was immediately hustled by a taxi driver. He tried to sell me on a $150 taxi ride to the hotel, unfortunately for him I have traveled quite extensively before and understood what was going on. I was able to safely, and cheaply, remove myself from the situation and move forward on the trip with no other troubles. I fully understand that one of the goals for this trip was to test my flexibility in dealing with this type of situation; especially if I were to be sent over by a company I may be employed with in the future. Prior to the trip I was fairly confident in my abilities to navigate abroad, I still feel this way. Even though India is an incredibly diverse and chaotic country, remaining calm and flexible is imperative if you are to succeed there. Being open to new experiences and situations allows you to operate smoothly and effectively. Learning to let go and be more open was slightly challenging for me. I like order, and chaotic situations can make me a little anxious. However I was able to overcome these constraints and really enjoy myself on this trip because I knew that I would not survive unless I let go and embraced the chaos of the situation.

There were no real moments where I felt uncomfortable and out of my comfort zone. Other than getting over the initial shock of seeing India for the first time, I fully enjoyed myself and the program as a whole. One of the cultural differences that surprised me at first was the lack of personal space. The Indian people believe that an open space is theirs for the taking. For example, as an American I maintained a good amount of space between myself and the person standing in front of me while in a line. On numerous occasions, another Indian person quickly took up that space with no regard to the fact that there even was a line and that their taking of the open space was even allowed. When explained to me, the whole concept made sense. With a population of over 1 billion people, if you do not take advantage of an open spot, then you will end up getting nothing.

This all goes back to the statement I made at the beginning of my reflection. The most important thing I learned on this trip is to STAY HUNGRY. For me, India represents a country of people that are hungry for success; they want a better life for themselves and their children. If you do not continue to innovate despite a lack of resources or opportunities, and if you do not continue to pursue your goals, then someone who is right on your heels will take up that open space and get the very thing you stopped fighting for. What surprised me most about India was the extreme poverty abundant throughout the country. By the end, I saw it differently. There may be poverty, but there are also many opportunities as long as you are willing to practice the concept of jugaar and stay hungry. Our visit to Puravankara represented this well. The founder of the company, Mr. Ravi Puravankara, started out with absolutely nothing. He ran away from home, became educated, and worked his way up to the top. Now, his company is building affordable apartments for a growing middle-class, which is striving for more opportunities and the promise of a better life. One of his beliefs, as quoted by his son, “I’m not in the business of selling you four walls and a roof. I’m selling you a lifestyle.” It is imperative that one stays hungry and open to new possibilities and opportunities if he or she plans to be successful in this world.

Regardless of all trials and tribulations, India means opportunity. 

Thursday, June 13, 2013

India's 12th 5 Year Plan

India’s 12th 5 Year Plan-An Analysis
Cal Poly MBA Trip-2013
Joshua Bingham
June 14, 2013

1.) What are some of the main overarching implications of the most current Five Year Plan that are likely to affect businesses operating in India (both domestic and Western)?

From the text of India’s 12th 5 year plan it is clear that the Indian government continues to search for ways to maintain a high percentage of growth that will push the country further along into the 21st century and hopefully alleviate some of the many problems the country and its people have been facing for decades. These problems include: debilitating poverty in both rural and urban areas, an inadequate water supply, over-dependence on foreign sources of energy, a lack of sufficient infrastructure, pollution/sanitation issues, etc. The 12th plan focuses on growth of over 9% compared to the actual growth rate of 8.2% which occurred during the 11th plan. The overarching theme of the 12th plan is “faster, sustainable, and more inclusive growth.” These goals are quite ambitious. Especially when one looks at the overall macroeconomic issues not only within the country itself, but the entire world. It was only five years ago that one of the worst economic crises since the Great Depression took place. Despite its fast growth in recent years, especially when looking at the average of 8.2% during the 11th plan, India will have to continue to deal with a weak global economic climate. One criticism regarding the proposed growth rate in the current plan comes from the Human Development Index. The trend shows that even though the country has been growing, the balance between said growth and a majority of the population actually benefitting from it, has continued a downward trend. In 2000 and 2005, the country held the 128th and 127th positions. Yet by 2009 and 2011 the country had dropped to the 134th position. In 2009, four Indian billionaires found themselves in the top ten richest people in the world; what was not mentioned was the fact that three out of every ten poor people in the world were also Indian. There continues to be an ever-widening income gap within the country. (“Twelfth Five Year Plan.” Economic and Political Weekly. 29 December 2012. http://www.epw.in/web-exclusives/twelfth-five-year-plan.html.)

How does all of this affect businesses, both domestic and Western, operating in the country? For one thing, the plan’s proposed growth rate sounds beneficial for businesses. A proposed higher growth rate will demand larger disposable incomes to boost consumption and spending on investments. Regulations on businesses may even be reduced, or eliminated altogether. One point made in the plan is that private investment has been around 36% of GDP, however this phenomenon has recently slowed due to the weak global economic climate and the increase of global energy and commodity prices. (India 12th 5 Year Plan; 15) In order to achieve a proposed growth over 9%, these pressures must be overcome and investment will have to rise above the previous 36% of GDP. This will not be an easy task for businesses to accomplish due to three main issues mentioned in the plan. These are: an over-dependence on foreign energy sources and their associated high costs, an inadequate water supply, and the need for better education and skill development.

First, India’s over-dependence on foreign energy sources and their associated high costs. According to the plan, to support a 9% growth rate in GDP, India’s supply of energy will need to increase by 6.5% per year. This is very ambitious, especially for a country which has very little of its own natural resources. For 2010-2011, 76% of India’s oil came from foreign sources and this number will grow to 80% by the end of the 12th plan in 2017. The same goes for natural gas, 19% to 24%. Coal will also increase from 19.8% to 22.1%. This growth in the importation of outside energy sources will keep prices high and put a damper on an increase in business investment. The plan states that it is imperative for the country to expand exploration and production of domestic natural resources. It goes so far as to mention the phenomenon of the U.S. shale gas revolution and the possibility of bringing that type of development to India. However, to increase exploration and adopt new technologies, like hydraulic-fracturing, will require more investment either by the government or private industries that receive assistance or benefits from the government. One other issue is the negativity associated with hydraulic fracturing, not only in the U.S. but around the world. Use and contamination of water resources is a big criticism facing hydraulic-fracturing, and for a democratic country facing a shortage of water and pollution, this will prove difficult when it comes to convincing the public.

In addition, the overall theme of the current plan mentions achieving higher growth in a “sustainable” manner. This is to be accomplished through a promotion in energy efficiency and a transition to more sustainable sources like hydroelectric and nuclear power. The plan states: “Increased energy efficiency is the only way to contain energy demand without jeopardising growth and it must therefore receive high priority in the Twelfth Plan.” (India 12th 5 Year Plan; 29) Yet, to achieve higher energy efficiency will require newer standards that will certainly increase costs in the short run and could maintain those higher costs in the long run. The plan mentions better labeling of equipment and appliances, a transition to more efficient residential lighting, higher efficiency standards for industries that account for a large percentage of the country’s energy usage, and even the installation of more efficient agricultural water pumps in rural areas. These higher costs will again be harder to pass off with businesses and the public.

It is clear that India’s energy resource problems will continue to be an issue for businesses operating in the country which could very well put the percentage of investment lower than the 36% of GDP previously achieved. This will not support the proposed growth of over 9%. Like energy, India’s inadequate water resources pose a problem to businesses as well. With 16% of the world’s population and only 4% of its usable water, India has been facing water issues for years. It is imperative that water resources be used in an efficient and sustainable manner. The country does experience a heavy amount of rainfall every year, but the creeping effect of climate change is causing unneeded problems. Droughts are becoming more prevalent, putting pressure on the existing water supply and damaging the food supply. Droughts and their negative effects only help to increase prices and strain the economy. Businesses that have to pay higher costs will not be focused on investing which will not help the proposed growth in the 12th plan. The solutions outlined in the plan mention improved pricing strategies in regards to the use of groundwater, and the establishment of a National Water Commission to monitor compliance with the national water strategy. These are good first steps. However, one example of the huge challenges India must overcome is in its urban water usage. About 80% of water used in cities is disposed of as waste and over 70% of that waste is left untreated. Better pricing strategies are certainly needed and the standing-up of a National Water Commission is a good idea, but the problem is much larger and will require massive amounts of investment, organization and cooperation to fix. Until water is no longer an issue within the country, businesses operating in its borders will experience not only higher prices in their production and operation, but also a drop in demand as water and food prices rise for the general public.

Lastly, the need for better education and skill development should not be left untouched. Businesses require a good supply of qualified workers to maintain their operations and increase growth. If the 12th plan is to reach its proposed 9% growth rate, investment must be made to improve education and further develop the trade skills which are imperative for a developing economy such as India’s. The government should play a big role in this area to ensure that education throughout the country is not unbalanced and that the skills being taught in the trades hold-up to acceptable standards. The private industry should also play a role though as private businesses are the ones which will benefit the most from a better educated and skilled labor force.

Education is the single most important instrument for social and economic transformation. A well educated population, adequately equipped with knowledge and skill is not only essential to support economic growth, but is also a precondition for growth to be inclusive since it is the educated and skilled person who can stand to benefit most from the employment opportunities which growth will provide.
-India 12th 5 Year Plan; 96

Education is, without question, important to the growth of the Indian economy. In regards to businesses operating within the country, the teaching of trade skills is crucial for industries that have a high employment potential like manufacturing and construction. This is one of the less dire problems facing the country and businesses operating within its borders. But, it is also the one that businesses could have a large impact on. Striving to improve education and trade skills will not only help their operations in the long run, but could help solve the more dire problems like those mentioned above: inadequate water supply, dependence on foreign energy sources and their associated high costs, etc.

The 12th plan does a good job of identifying the problems and outlining possible solutions. However, when it comes to businesses operating in the country, these problems pose a huge threat to their future success. If not dealt with in a determined enough manner, the businesses will be unable to invest and help reach the proposed 9% growth rate.

2.) What are some of your key observations and takeaways from the 12th Five Year Plan?
As I mentioned in my answer to the first question, the proposed growth rate of more than 9% seems a little ambitious. The outlook for the global economy is still not positive. Negative economic issues in Europe in regards to debt and austerity measures continue to roil international markets. The U.S. economy is currently improving yet is still fragile and some say will never return to its former glory. Closer to India is China with its own political and economic issues which the world focuses on daily. Needless to say, the overall macroeconomic issues do not favor a growth rate of 9%. In addition, the country will not be able to maintain such a high growth rate if it does not deal with structural issues that have plagued it for decades: education, health/sanitation, water, energy, etc. I feel that the solutions to issues outlined in the current five year plan provide a good foundation to work from. However, these problems are so large that it will take more than five years to solve them and at some point India will reach a tipping point where rapid growth will not continue until positive changes have occurred.
One interesting section in the plan was titled, “Towards Comprehensive Health Care.” At first look, one might think that there are much larger problems facing the country that are more important to focus on than providing universal health-care. Yet, the plan states that it is imperative to define a broader health strategy “which includes service delivery for a much broader range of conditions, covering both preventive and curative services.” (India 12th 5 Year Plan, 87) India’s continued development will depend on the rising of health and sanitation standards. In order to become a more developed nation the standards of living must rise for a large majority of the population and that will begin with better health and sanitation. One important area to focus on is preventative health and improvements in the services available to rural citizens. “One of the major reasons for the poor quality of health services is the lack of capital investment in health for prolonged period of time.” (India 12th 5 Year Plan; 90) Programs have been initiated to try and address so many of the issues facing those in rural areas, however their funding or resource base is not sustained. Improving the lives of India’s rural citizens will go a long way in improving the overall health of the country. Moving towards a comprehensive health care strategy is an early, smart and responsible strategy for the Indian government to pursue.

3.) Some economists argue that 10% GDP is the minimum growth floor India needs to achieve to create enough jobs for its markets and stability. The most recent plan appears to shoot for growth for most of 2012-2017 at 8.2%. Can India achieve such growth over the next four or five years? What may happen for them, and for us/the USA, if they come in lower than that number?
India could very well achieve the 8.2% growth rate it has proposed in its current five year plan. However, as it mentions numerous times throughout the plan, the overall macroeconomic issues and internal challenges facing the country may put a damper on that proposed growth. I do think it has a good chance of reaching its proposed level of growth but it must also focus on building up the economic power of its lower classes so that the disparity among incomes does not continue to grow and eventually cause the country’s economy to stagnate. Fixing the country’s infrastructure problems, water shortages, dependence on foreign energy, health/sanitation issues, etc. are incredibly important issues which if dealt with properly will set the country up for success in future decades. In regards to the economy not reaching the proposed level of growth, I doubt this will cause any negative impacts for India or the U.S. The 12th plan is just that, a plan. Governments throughout the world make plans every year to improve the economy or change policies, yet they do not always achieve these goals. One possibility is that the percentage of investment may fall as investors become wary of policies that the government is not able to follow through on.

4.) What are some of this plan’s targets and longer-term priorities? How do these differ from our priorities in the USA, and why?
This plan clearly strives for higher growth than the last plan. The country will depend on this high growth to keep developing the country and make it more powerful on the global stage. The plan also aims for better future conditions. The focus on energy and water represents these long-term goals. Without improvements in these sectors the country will stagnate and possibly lose some of the momentum it has already built up. The health of its people is also a big aim in this plan. As I mentioned above, the health and wellness of India’s citizens is imperative if it wants to continue to grow. Sick and destitute individuals can not help the economy grow as more resources are needed for their care. In addition, outside investment will not pour in if investors do not see potential in the economy.
I do not think these priorities differ all that much from ours in the USA. Citizens of different countries throughout the world always want things to be better; there is always room for improvement. India takes a more planned approach to their issues than we do here in the USA. We let market forces take control and believe in less government intervention. Arguments as to whether or not this is good or bad continue and probably will for the foreseeable future.

5.) What were some of the accomplishments (and failures) from some of India’s previous Five Year Plans?
When looking over the history of the previous five year plans, it is not surprising that in many of them growth rates were not reached. It is impossible for a government to come up with a target rate and expect everything else in the world to fall into place so the target growth rate can be reached for one country. Wars, famines, recessions/depressions, natural disasters, etc. can not be accounted for and all cause serious problems.  For example, in the third plan, from 1961-1966, the Sino-Indian war caused an increase in prices which resulted in inflation. Also, funding was shifted to the defense industry and away from areas which needed it the most. An interesting accomplishment is the rise of the IT industry during the sixth plan. One of the aims for this plan was rapid industrial development which paralleled the rise in GDP of 5.4% compared to the planned 5.1%. Not only did speedy industrial development take place, but huge improvements were made in the communication and transportation sectors as well. The history of the five year plans is very diverse. There are many instances where the plans did not reach their goals due to outside pressures which set them back or destroyed them all together. It seems rare that any of the plans actually achieved the goals they set down. Rather, they seem more like guides. (“Five Year Plans of India.” http://www.slideshare.net/Ravit4/five-year-plans-of-india.)

6.) Do you think this type of strategic planning is possible in the USA? Would the pros outweigh the cons, and what would be some of the pros and cons of a Five Year Plan in the USA? If a Five Year Plan option was presented to American voters as a constitutional amendment, would you vote for or against it, and why?
No I do not think this type of strategic planning is possible in the USA. In some cases, it would be of help; for instance in education, healthcare, water, and energy. These are all areas which face a number of challenges. Yet, the recent effort to institute universal health care met incredible levels of opposition. Energy is another area that causes heated debates. The current surge in natural gas production has many people hailing the arrival of an energy revolution in the country. Others criticize the environmental destruction that extraction techniques have and may continue to cause. There is a stigma in the USA of government becoming too large and possessing too much power over the country’s citizens. Special interest groups put a lot of pressure on congressional representatives to get what they want and the common good is not always present when these groups get together. I feel that trying to institute a five year plan in the USA would only cause unneeded distractions for the country. Honestly, there would be such a mass outpouring of negative responses to such an attempt that it would take twenty years for the first one to ever be released. I would not personally vote for a constitutional amendment that instituted five year plans as I feel more bad than good would come from it. There is already too much political division within the country that there is no need for more. What will really be interesting is whether or not India continues to come up with five year plans as it develops further, or will it eventually let the markets fully take over. This remains to be seen.

Friday, March 22, 2013

Billions of Entrepreneurs
Author: Tarun Khanna
ISBN: 9781422103838
By: Joshua Bingham

Billions of Entrepreneurs by Tarun Khanna is an in-depth analysis through a case study approach of China and India: their history, rise, and future. From the introductory chapter, Khanna looks at numerous topics and then provides examples from both countries to show how each of them is dealing/not dealing with them. The topics are wide-ranging and cover things like health-care, the construction of cities and infrastructure, and even the soft power of the Bollywood film industry in India. Khanna breaks his work down into three main sections. The first, Foundations, looks at the governments within China and India and their approach towards managing two completely different developing entities with massive populations. His analysis of the challenges that each of the governments have faced, and continue to face is quite eye opening. The history of each country is full of trials and tribulations, and how their governments have evolved to address issues like information accessibility, infrastructure development, and the financial system, only adds to those trials and tribulations.

The next section, Enterprise, focuses on the business activity of each country. Between the two there are stark differences in how business is conducted. Due to the dominance of the Communist Party in China, entrepreneurship is minimal. Khanna even mentions in the book how the government is the main entrepreneur in the country and much of the country’s success can be attributed to government initiatives and direction. Foreign companies attempting to enter the Chinese market do not do so easily either. Khanna uses Microsoft as an example of one corporation that jumped through many hoops in order to gain the favor of the Chinese government. A big question waiting to be answered is what will happen in the future to this relationship between government and business in China. Currently, “doing business in China as a truly private enterprise is not something to wish for, and doing business with China requires understanding the nuances and connotations of the term private, which means something quite different in the West.” (138) However, as China continues to grow the government will not be able to control everything forever as inefficient state-run enterprises and corruption are stirring discontent among the Chinese people. In contrast, India’s government has never been considered efficient. In his analysis of the German company, Metro Cash & Carry, Khanna points to massive government inefficiency in the agricultural wholesale market and how Metro entered the fray to bring order and efficiency. Despite its obvious improvements, the company continues to be hamstrung by government intervention and bureaucracy.

Lastly, Future, is a look at the current ties between India and China and how they are being exploited to benefit both of the countries. One of the most interesting chapters is, “Old and New Roads to Mandalay,” which begins with a review of the tensions between India and China over the past four decades due to Chinese domination in Tibet and then concludes with the opportunities available to both in Burma. In the remainder of the third section, Khanna looks at the soft power Bollywood possesses, not only within India, but also in China. He then analyzes the relationship the two countries have in regards to Buddhism and how it can be exploited to further each of their computer software and hardware capabilities. He finally rounds out the book with a look at General Electric (GE) and the success it has experienced in the two countries; using the company as an example of the effort it takes for a foreign company to establish itself in these challenging markets. “It has taken GE more than a decade of effort in each country, preceded by a less substantive commercial presence lasting nearly a century, to figure out how to profit from being in China and India and to contribute substantially to both countries.” (296) Khanna determines that the success GE has experienced is due to the symbiosis of its operations in each country.

Relevance of Billions of Entrepreneurs:
To say that the rise of China and India over the past two decades is impressive would be an understatement. Their ascension onto the world stage has been the focus of many books, newspapers/magazines, etc. China’s economy is becoming so large it is predicted to overtake the U.S. in the next 10 to 20 years. The size of their individual populations is equally staggering; over 25% of the world’s population resides in China and India. As they both continue to grow, the roles of these two countries on the world stage will evolve. Whether they will be positive or negative roles remains to be seen.

Despite their rapid growth and development, there are still challenges facing both countries. Democracy in China is a hot topic these days. The Communist Party is performing a delicate balancing act in trying to maintain control over the country and its population while at the same time embarking on projects to expand the free market and eradicate corruption all in order to quell dissent. In regards to India, millions of its people still live in horrible conditions of poverty. The government is a messy democracy with a massive bureaucracy, which has proved itself incredibly inefficient. If India ever wants to become a truly developed nation, the government must take a bigger stand in reducing poverty and providing opportunities for its entire population to rise and flourish.

Khanna’s book is an excellent work for anyone interested in the rise of China and India and how their rise may, or may not, alter the dynamics of international relations, the global economy, business, politics, and even entertainment. Although it was published six years ago in 2007, the book is still relevant today. However, what happened yesterday does not always predict what will happen tomorrow. If challenges and inefficiencies are not correctly addressed, the futures of both China and India could be very different from what is being predicted. It is important for those involved in government, economics, and business to try and fully understand all that is going on in these two countries or else the change that continues to occur will blindside those who are not prepared for it. This is why Khanna’s book is so important.

Agreements with Billions of Entrepreneurs:
I really enjoyed this book. Not only is it well written but the detail and in-depth analysis is what really set it apart from similar works. The number of interviews Khanna performed and the hours he spent combing through other informational sources is impressive to say the least. Khanna’s organizational layout is also very interesting; addressing individual topics and then providing examples of how they are dealt with in each country was quite engaging.

One of the sections that intrigued me the most was in Chapter 10, “Barefoot Doctors and Medical Tourists.” Particularly “Mother Teresa’s Heart Surgeon.” (214-218) I had already read about Dr. Devi Shetty’s hospital in Bangalore and all the amazing work he is doing there, yet Khanna’s interview shed new light on some unknown details. For instance, Narayana Hrudayalaya, Dr. Shetty’s hospital, has its own department devoted to expediting the visa process for foreign patients looking to obtain care at the hospital. According to Khanna’s interview, Dr. Shetty originally wanted the department established so that Pakistanis seeking medical treatment would be able to get it. This bit of information was very uplifting. India and Pakistan have been at odds with each other ever since the latter broke away in 1947. In fact, the 2008 Mumbai attacks were blamed on Pakistani terrorists who may have been supported by the ISI, Pakistan’s intelligence service. Here is a man setting an example on how to ignore differences and focus on what is most important, the health and wellness of the people.

The most interesting aspect of his story is that even in a developing nation like India, where poverty remains a huge problem, Dr. Shetty has found an innovative way to provide excellent medical care to all who walk through the hospital’s doors. His focus on keeping costs low to make it affordable to help everyone is very different from developed nations where medical costs continue to rise despite advanced technology and medical practices. This is an excellent example of Khanna’s analysis regarding China and India. Dr. Shetty’s entrepreneurial attempts are representative of the private sector in India: innovative, independent, and efficient. Compare this to China where entrepreneurship leaves a bad taste on the tongue of heavy-handed government officials.

Disagreements with Billions of Entrepreneurs:
Khanna’s focus on case studies and in-depth analysis is one of the reasons the book is so good. However so much of it makes reading the book feel like a chore at times. I found myself having to set the book down to take a break while reading certain sections. There is so much information that it can be overwhelming. A good example is Chapter 9, “Village Engineering and Reengineering.” (189-212) This analysis of rural village organization in China and India, either by government or private interests, was very dense and full of acronyms that were hard to keep track of. Under the section in the chapter, titled “Mao’s Chinese Divide and Deng’s Orchestrated Capitalism,” it felt like Khanna tried to stuff every detail of Mao’s collectivization efforts and Deng Xiaoping’s reforms into five pages.

Another section serving as an example was Chapter 13, “Buddha and Software.” Khanna uses the analogy of Buddhist monks being brought from India by envoys of Emperor Sing of the Han Dynasty in 67 C.E. and the spread of Buddhist beliefs to China as a prologue to the spreading of Indian programmers and their software to China in the 21st century. “Just as Indian monks made court-sponsored journeys to translate Buddhist texts in ancient China, Indian software experts are being lured by the Chinese state to convert their software prowess into a form that can benefit the Chinese.” (286) Khanna does make a good point in this chapter that cooperation between China and India on technological endeavors would benefit both of them. India has the expertise in software, and China the expertise in hardware. A positive relationship between the two in that industry could become a powerhouse in the global economy. Yet, like his analysis in “Village Engineering and Reengineering,” Khanna’s description of the Buddhist history between the two countries, all to set up his belief that the two can benefit from each other’s expertise in software and hardware becomes lengthy and almost tangential.

Closing Thoughts:
Overall, Billions of Entrepreneurs is a very good book. I thoroughly enjoyed reading it and learning more about these two interesting countries. Without question, their further rise and development will have an impact on global dynamics. The government or business that ignores this is already setting itself up for failure. Khanna does not pull punches in describing the pros and cons of each country. In fact it is quite a breath of fresh air to read an author who makes it clear that both of these countries still face numerous challenges; he does not get caught up like many in the mass-media who proclaim that the rise of China and India is the end-all be-all of the 21st century.

In relation to our upcoming trip, after reading this book, I am only more interested in visiting India and experiencing the country and its people for myself. Khanna paints a picture of a vibrant country with so much going on that it overwhelms the senses. I am excited for this opportunity and all that I will learn from the trip. If I learned anything from Khanna’s book, it is this: the world is changing, in many ways for the better, and if you want to be successful in it you have to understand the differences that distinguish all of its different elements. Establishing relationships with an eye to the future is what separates the good from the bad.

Sunday, February 24, 2013

Defending India

The 2008 Mumbai terrorist attacks were incredibly organized and efficient which made them that much more violent and fear-inducing. The show Frontline on PBS recently did a special on one of the men, David Headley, an American by birth, who helped plan the attack. His commitment to detail during the planning process was impressive if not disturbing. Following the attacks, millions of people throughout the world were shocked by the violence and India was unofficially declared "unsafe". Now, over four years later, as we prepare to visit Mumbai, many of my friends and relatives still question the reasoning behind our trip. I have to constantly tell them that India is a safe place and that we will not run into trouble while there. However, Americans have a horrible fear of Southern Asia due to their lack of education and past experiences with the wars in Iraq and Afghanistan, current tensions with Iran, and a sour relationship between the U.S. and Pakistan. How do you set their fear at ease, especially when the attacks happened over four years ago? One way is to get them to stop focusing on the 24-hour news bonanza. American's are addicted to the constant squawking coming from "qualified" media sources. This has only helped fan the flames of fear and insecurity. We must remember that the whole goal of terrorism is to instill fear; an attack may kill or injure innocent people, but it is the psychological effect afterwards that terrorists are striving for. When people are scared of traveling to another country, or even doing business in that country, then the terrorists have won. The media is terrorism's best friend; it unknowingly helps spread the fear.

In regards to India's reaction to the attacks; no matter how well a people or nation may prepare for such an event, there will always be surprises. There is no possible way to monitor every person in every location, regardless of how rich a country may be. Openings for terrorists to take advantage of will always be there, and that is exactly what happened in Mumbai. The only way to prevent future attacks from happening is to learn from the previous ones and take appropriate measures; that includes not letting the fear run rampant, because that is exactly what they want. As the post mentions, India's best counter-terrorism policy is resilience.

Friday, December 7, 2012

The Post-American World
Author: Fareed Zakaria
ISBN: 978-0-393-06235-9
By: Joshua Bingham

Fareed Zakaria’s book is an analysis of how the political and economic structure of the world has been radically changing throughout the past decade. Beginning with the September 11th attacks in 2001, the rest of the world saw how the United States, no matter how powerful it might have appeared, was not immune to the dangers lurking in the shadows. At the beginning of the second chapter, Zakaria writes, “Imagine that it is January 2000, and you ask a fortune-teller to predict the course of the global economy over the next several years.” (Pg. 6) That would have been impossible. As we all know, following the attacks, the U.S. embarked on two costly wars that turned into some of the longest military engagements the country has ever undertaken. In addition, leading up to 2008, the U.S. economy began unraveling which led to a meltdown in its financial system. The shock from this reverberated throughout the world causing many other economies to begin experiencing problems of their own, like the Euro Zone. In addition, and one of the main focuses of Zakaria’s book, was “the rise of the rest”. China and India, two nations that have definitely experienced their own problems, began to expand their position on the global stage. For instance, China has grown so much that it is now the world’s second largest economy in terms of GDP. It is the rise of developing nations like China and India, and the prevalence of internal problems in developed nations like the U.S., that has radically changed the structure of the world. The United States may still be the dominant player, yet its overall power and influence is waning.

It must be mentioned that despite the title of the book, Zakaria’s argument is not that the United States is going to crumble away over the next decade, far from it. It is instead a reference to the change of a U.S. dominated world into one dominated by globalization. His argument is that, as mentioned above, the world is changing and new competitors and challenges are emerging. The U.S. is still in the best position, compared to any other country, to continue to be the dominant player. However, it must make changes in how it operates and interacts with the rest of the world. It must practice the ideals its political system and economy are based on: freedom, democracy, and a competitive capitalist system. The U.S. became the world’s superpower following WWII, despite fighting a “cold war” with Russia, and has remained the superpower up to present day. Where it goes from here will be determined by how it responds to “the rise of the rest”.

Zakaria supports his arguments by looking at how the western world, especially the U.S., has influenced the governments, economies, and cultures of the rest of the world. From Japanese businessmen wearing suits, to cell-phones outnumbering toilets in Africa, to the wildly popular films coming out of Bollywood. Next, he looks at the two rising powers of the world, China and India, and how their growth is expanding their influence. He then compares the U.S. to the British Empire and how its demise during the late 19th century and early 20th century has similarities, and differences, to the current U.S. situation. Finally, he looks at the U.S. and makes recommendations as to how it can remain in the dominant position while being accepting of globalization. The U.S. should not shut itself in, but must become more open to the opportunities that globalization is presenting and take full advantage of them.

Relevance of The Post-American World:
Zakaria’s work is exceptionally relevant for the times we are living in right now with its focus on the changes over the past decade in regards to globalization, the decline of U.S. supremacy, and the rise of nations like China. However, the version I read was published in 2008, prior to the outbreak of the global financial crisis. A newer version, “Release 2.0”, was published in 2011 and addresses those events and how they have further dampened the power of the U.S. What is also interesting is that even though this book addresses important global topics, events continue to move very fast; too fast for a comprehensive analysis to be written on the subject of globalization and how the U.S. should react. Already, the Chinese economy seems to be slowing down and the heavy-handed role of its government continues to cause tensions both internally and externally. India also faces massive wealth inequality and, like China, a stagnating economy. Regardless of these challenges, both of these countries will continue to grow. Yet, a new crop of up-and-comers is entering the picture. The MIST countries (Mexico, Indonesia, South Korea, and Turkey) are growing rapidly and claiming their spot on the world stage. Meanwhile, the International Energy Agency just announced at the end of 2012 that the U.S. will become the world’s largest oil producer by 2020, and possibly energy-independent by 2030. (“U.S. Oil Output to Overtake Saudi Arabia’s by 2020.” Bloomberg News, 12 November 2012) The pace of change is so fast that new developments like those mentioned above continue to affect the global landscape quicker than anyone can properly analyze them. Zakaria’s work will probably not be very relevant in a couple of years; such is the way of the modern world.

Despite the rapid pace of change, Zakaria provides the necessary background of globalization and analysis of key global players; the recommendations presented at the end of the book (Pg. 231-250) remain relevant for any politician, businessman, or student who is trying to better understand the current effects of globalization on U.S. power and how the nation should respond. American politics and business can no longer remain solely focused internally. To be successful and competitive, they must move outside their realms of comfort and operate on the global stage. This fact has been obvious for some time, but it continues to become more and more important. This is the perfect book for any individual, or group, who has realized that fact and wants to take advantage of it.

Agreements with The Post-American World:
This book is very well researched and written. Zakaria brings a wealth of knowledge and insight to the subject. It is refreshing to read something that is not so politically motivated these days. In fact, that ties in perfectly with one of the underlying themes of the book. Zakaria addresses three main shifts that have taken place over the past 500 years. Beginning in 1405, during the dark ages of Europe, China was a strong power. It sent out massive fleets of ships in order to proclaim its dominance over other Asian powers. However, due to political decisions during the middle of the 15th century, these voyages soon stopped and China turned inward and reversed the political, economic, and cultural progress it had been making. It was at this time that Europe began rising from the ashes and setting out to explore the world for itself; of course we all know the story of Columbus in 1492. According to Zakaria, this represents the first shift, or better known as “the rise of the west”. This rise was well represented by the expansion of the British Empire and the Industrial Revolution. The second shift took place between the end of the 19th century and the end of WWII. During this time, the British Empire was declining economically. The U.S. had taken over the lead when it came to industrial production and England had spread itself too thin in regards to its empire; a notable example being the Boer War during the turn of the 20th century, which not only cost the British Empire a lot of money, but also its international reputation as well. This was the time for “the rise of America”. The U.S. continued to grow rapidly, and following the decimation of Europe after two world wars, the country was in the perfect position to proclaim its dominance.

I think Zakaria makes a good comparison between the decline of the British Empire and the current situation of the U.S. For example, the Boer War, which was a major headache for England, is very similar to the U.S. war in Iraq, which did more harm than good for the country in regards to cost and respect. Although Zakaria sees many similarities between the past British Empire and the current United States, the reason for British decline was more in terms of its economy. In contrast, the main challenge of the U.S. is more about its political system. Ours is broken and dominated by partisan politics. Less and less seems to be accomplished these days by our elected officials; the current “fiscal cliff’ negotiations being a perfect example. In order for the U.S. to remain relevant during the third shift, or “the rise of the rest”, it must get its political house in order or else it will go the way of the British Empire. This is one of Zakaria’s arguments that I fully agree with. Part of the problem is also the media and the fear it induces within the population; major media outlets have been split along conservative and democratic lines. The news is no longer “news”; rather it has simply become individual networks of opinions, which inflate the political and economic situations to levels that induce fear into even the most hardened of individuals. “America has become a nation consumed by anxiety, worried about terrorists and rogue nations, Muslims and Mexicans, foreign companies and free trade, immigrants and international organizations. The strongest nation in the history of the world now sees itself as besieged by forces beyond its control.” (Pg. 251) The U.S. must cure itself of the political divide and fear, which is currently raging, and re-orient itself towards policies that are in line with the current global trends. If it allows divisive politics and fear to prevent it from opening up more of itself to the world, it will turn inward and lose the progress it has made, just like China did during the early to mid-15th century.

As mentioned before, the recommendations at the end of the book are extremely relevant, the second one even more so for what I have just discussed. “Build broad rules, not narrow interests.” (Pg. 238) Due to “the rise of the rest”, the U.S. is slowly losing some of its power as the dominant player on the global stage. Yet, this is only natural; great powers cannot remain great forever. The best strategy for the U.S. is to accept this and utilize it to its advantage. Instead of trying to dominate every situation, which is impossible in today’s world, the U.S. should “create a structure of rules, practices, and values by which the world will be bound.” (Pg. 238) This structure should be in line with the country’s own ideals of freedom, democracy, and competitive capitalism. Having a political system that does not get anything done, or a financial system that is based on shadowy practices, is not the way to go about this. For the U.S. to be successful in the globalized world, it must live up to its own ideals and practice what it preaches. In doing this, the rest of the world will follow as it has for the past 100 years, regardless of their growth rates, and the U.S. will no longer continue to exhaust itself trying to dominate every situation.

Disagreements with The Post-American World:
I only have a few disagreements with Zakaria’s work. First, I felt like the first couple of chapters presented a lot of information that seemed all over the place. I understand this is a tough subject to cover in a book with little more than 250 pages, but it still seems that in the beginning the author did not fully know the direction he wanted to take. In the second chapter alone, “The Cup Runneth Over,” Zakaria addresses how the world is currently a much more peaceful place than people believe, then he goes into a nine page analysis of the “Islamic Threat.” Following that analysis, he addresses his theory of the three major shifts over the past 500 years, “the rise of the west,” “the rise of America,” and “the rise of the rest.” In another section within the same chapter, he covers the effects that an increase in population and the rise of developing nations will have on the world’s resources. Nationalism is also addressed. As these developing nations grow, they will become more individually empowered, which may in turn cause tensions to flare up between countries. It is not until the fourth chapter, eighty-seven pages in, that the information becomes more controlled when Zakaria looks at the rise of China. The information was very interesting, but there was a lot of it and it was not well controlled. If Zakaria was trying to give an impression of the chaos that is globalization, he definitely accomplished that in his presentation of information for the first three chapters.

Second, I feel that Zakaria’s claim in the sixth chapter, that higher education is “America’s Best Industry,” is a little much. (Pg. 187-191) I do not disagree that the U.S. has some of the best higher education institutions in the world. However, many colleges and universities do not support a global focus. In order to be competitive and successful, the U.S. must have educated individuals who are encouraged to broaden their focus outside of the country. There are immense opportunities for the U.S. to take advantage of throughout the world. Yet, these individuals must have the knowledge to be able to operate within different countries, among different cultures and languages. American higher education remains too centrally focused. We have thousands of foreign students who come to our institutions and receive a first-class education, and in the end they are in a better position because they have experience with two, or more, cultures. They are better able to adapt to different environments and have a more global perspective. Programs like the trip to India in June 2013, is a perfect example of how higher education should support a global focus. Until that time, I disagree with Zakaria’s claim that America’s best industry is its higher education industry.

Closing Thoughts:
Overall, I liked Zakaria’s book and the argument he presents. I would definitely recommend this book to all college students, politicians, and business leaders. The U.S. may be facing some tough challenges; however, none of them are so large that they cannot be overcome. We must become more globally focused. “Generations from now, when historians write about these times, they might note that, in the early decades of the twenty-first century, the United States succeeded in its great and historical mission-it globalized the world. But along the way, they might write, it forgot to globalize itself.” (Pg. 48) The U.S. is in a good position to remain the dominant player on the global stage, but it must not forget to globalize itself and live up to the ideals that are at its core: competitive capitalism, democracy, and freedom.