Economic growth and India's future
J.Mukherji_2006.pdf (application/pdf Object)
Large Western firms have had operations abroad for many years but
the implications of a shift of key service functions to a foreign location may be
qualitatively different from the earlier shift of industrial production abroad. More and
more of the central nervous system of the firm, including its management information
system, accounting, customer service, product development and design, as well as parts
of its strategic thinking is going to be located abroad (not just in India), perhaps altering
the dominant management models more than would be apparent from simply looking at
the dollar value of the work done abroad. Closer political ties with India may generate the
needed level of comfort for firms to shift as much of that type of operation to India as
economic logic would dictate.
The US is a capital-intensive economy with a high level of technology. Along with other
countries with a similar profile, it shares a common interest in working with India to help
its own companies maintain their competitiveness and their technological edge in coming
years by drawing upon Indian skills and talent. It also stands to gain from harnessing India’s demographic profile to meet its needs in health care, financial services, and other areas.
In comparison with China, change in India is being driven more from the bottom and the
middle. India’s national political leadership often appears to be accommodating the
changes that are hurled in its direction, rather than initiating them. There is no Indian
Deng Xiaoping, a paramount leader driving economic reform, and may never be. India’s
advantage is that it does not have to depend on good leaders to keep growing.
India possesses the political liberty, pluralism, and institutional framework needed to
successfully enter the global economy. It suffers from poverty, poor physical infrastructure, and fiscal weakness. In attaining a comparatively more mature level of political development, India has solved the biggest long-term challenge facing China.
Indian democracy faces no threat from globalization but China’s system of governance is
likely to change over the medium term.
Large Western firms have had operations abroad for many years but
the implications of a shift of key service functions to a foreign location may be
qualitatively different from the earlier shift of industrial production abroad. More and
more of the central nervous system of the firm, including its management information
system, accounting, customer service, product development and design, as well as parts
of its strategic thinking is going to be located abroad (not just in India), perhaps altering
the dominant management models more than would be apparent from simply looking at
the dollar value of the work done abroad. Closer political ties with India may generate the
needed level of comfort for firms to shift as much of that type of operation to India as
economic logic would dictate.
The US is a capital-intensive economy with a high level of technology. Along with other
countries with a similar profile, it shares a common interest in working with India to help
its own companies maintain their competitiveness and their technological edge in coming
years by drawing upon Indian skills and talent. It also stands to gain from harnessing India’s demographic profile to meet its needs in health care, financial services, and other areas.
In comparison with China, change in India is being driven more from the bottom and the
middle. India’s national political leadership often appears to be accommodating the
changes that are hurled in its direction, rather than initiating them. There is no Indian
Deng Xiaoping, a paramount leader driving economic reform, and may never be. India’s
advantage is that it does not have to depend on good leaders to keep growing.
India possesses the political liberty, pluralism, and institutional framework needed to
successfully enter the global economy. It suffers from poverty, poor physical infrastructure, and fiscal weakness. In attaining a comparatively more mature level of political development, India has solved the biggest long-term challenge facing China.
Indian democracy faces no threat from globalization but China’s system of governance is
likely to change over the medium term.
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