When he speaks about his new book “Indian Economic Superpower: Fiction or Future,” Jayashankar Swaminathan likens India’s rise in the business world to a quote from President Barack Obama during his inauguration speech.
“Today I say to you that the challenges we face are real,” Obama said. “They are serious and they are many. They will not be met easily or in a short span of time. But know this, America - they will be met.”
Just as Obama notes that the United States will continue to be a global force, but not without some work, India is on a trajectory to be a superpower on the world’s economic stage, Swaminathan argues in the book, which will be available in the United States later this month. Swaminathan is UNC Kenan-Flagler’s senior associate dean of academic affairs and Kay and Van Weatherspoon Distinguished Professor of Operations, Technology and Innovation Management.
“India is going to be an influential player in the global economy,” he said. “It will be an economic powerhouse sooner rather than later. The economic engine is running fast. India has the potential and the resources, but needs to structure these correctly for success.”
Swaminathan, who grew up in New Delhi before coming to the United States for graduate work, conceived the notion for the book when he developed the first global immersion elective (GIE) to India in 2004 for UNC Kenan-Flagler MBA students. That same year he visited the Indian School of Business in Hyderabad.
The India he had known since childhood was beset by government-run organizations, bureaucracy and pessimism about what individuals could do with their careers. But he saw a very different face of India during that trip.
“Visiting some of the best firms in India during that GIE as well as teaching at a top business school was quite influential on my thinking about what was happening to India as a country,” he said. “It was clear that there was a sea change brewing in the economy.”
While some industries were quite at par with their western competitors, others were far behind. It was not clear why some industries were ahead of others and what opportunities this presented for the global economy, he added.
After surveying other books that had been published on India, Swaminathan found that there were books on India and its culture but not a research-oriented, deep analysis on how and why Indian business are developing the way they are in the current market.
The book opens during the late 1980s and focuses on the past 20 years to lay out the sea change that has been propelling the Indian economy during this period. It focuses on the opportunities and obstacles in a variety of industries including off shoring, manufacturing, information technology, health care, logistics and sales and marketing. The book also identifies future opportunities in several other sectors that are in early stages of development and may offer similar growth opportunities in the upcoming years. The book concludes with a discussion related to the implications of the current global economic crisis on India’s future growth. While Swaminathan wrote about 50 percent of the book, he enlisted experts in various other fields to contribute other portions.
He argues, for example, that India must overcome the deep disparity that exists between classes. While the lower classes have not typically been included in India’s growth, the country’s continued expansion needs to be inclusive to meld these different sectors of the population. The country also must step up its infrastructure development and find a way to force businesses to pay taxes, he noted.
“In India, 96 percent of retail is Mom and Pop stores,” he said. “This is an unorganized sector. Many of those retailers don’t pay correct taxes on their sales. If the government doesn’t get the tax money, how are they going to build roads and power lines?”
In addition, although India has a tremendous amount of higher education opportunities, there are still too many people – many who live in rural areas or poor villages – who don’t have primary or secondary education, the book notes.
“The government has to figure out a way for everyone to be educated,” Swaminathan argues. “If every child in India can be educated, you have created a superpower there.”
Obstacles aside, the country’s ascension toward superpower status is being bolstered by a new mentality among many successful Indians who are willing to share some of the wealth they have acquired not through inheritance but from their own hard work, Swaminathan details in the book.
“That mindset is coming to the people of India that says, ‘I made it big. I want to share some of that.’ That was not there in previous generations,” he said. “If that happens, the government may not need to provide as much handholding and support. Indians (individuals, firms and policymakers) are starting to talk the way people should talk when they want to see economic development.”
The book includes decades of research on India from contributors from the University of Michigan, New York University, the Indian Institute of Management, Purdue University, the University of Texas at Austin and Deloitte Consulting in addition to the University of North Carolina at Chapel Hill.