Exclusively by Tajan Joseph:
Dr Jagdish N. Sheth is a world famous Marketing Guru who is considered a revolutionary when it comes to strategic thinking, global competition and relationship management. He remains a world authority in the field of marketing with more than 200 books and research papers in different areas of marketing and business strategy under his name. I was privileged to listen to his presentation on the changing global scenario and how the global business environment is affected by different driving factors of PESTEL (Political, Economic, Social, Technological, Ecological and Legal). For close to an hour, Dr Sheth shared with us his immense knowledge on the progress of CHINDIA (China & India) and the shift of the world power.
Following are some key points that were delivered during the speech:
As stated, the world is today witnessing a shift of power. According to Dr Sheth, there are four major forces that are driving this shift: An equal access to the world resources has allowed competing developing countries to get a good foothold in an erstwhile Western driven Global Economy. It is said that there are lesser men in Japan every passing month while Asia today accounts for over 60% of the world population. An ageing population of affluent nations constitutes another reason for the shift of power to these upcoming economies. The collapse of a Communist Soviet Union together with the Economic Pragmatism of the Western Civil Society has further increased the pace of the shift. An example cited was that of the unification of East and West Germany where equal footing was given to both the socialist and the capitalist economy. As a result, the German economy went into a slump. Within one year of unification, the unemployment in Eastern Germany rose to over 3 million with its entire production amounting to less than 8 percent of Western Germany.
Several examples were also cited of the continued acceptance of the Asian culture in the Western society. The acceptance and implementation of Yoga across Christian churches in Europe, emergence of around 6 million Buddhists in UK are all tell tales signs of this change.
There are many signs that are visible to the relevance of the shift of power. Today, China has surpassed Japan in terms of investment in Research and Development. Chinese research is up to 4 times more effective than that of the United States. Many of the US research have gone out of practical context. Today, NASA boasts of thousands of patents with many of these available to the society for as low a price as 1 USD.
The power of G8 has been consistently reducing with the IMF today reporting to G20. The world is seeing the role of multi-lateral politics with more and more CHINDIA leadership playing vital roles in world stage. The need of a global currency is also gaining momentum with many countries demanding a replacement of the greenback. The world could soon see IMF become the central bank of central banks.
The world market is witnessing a shift towards affordability and accessibility. This is true especially since CHINDIA has got a huge rural population which is a huge market in itself. World over, the value chain is also changing rapidly. Today, the generation gap recorded in western society is as low as 8 years.
Dr Sheth foresees the future to redefine bothCapitalism and Democracy. The US defined capitalism is too raw for the rest of the world to implement. Lapses in Social Responsibilities, high remuneration to CEO’s are some of the examples of the current US Capitalistic Structure.
The first half of the present century would truly belong to CHINDIA. Most of the news would highlight the growth and succession of power of the fastest growing economies. From NAFTA and EU, Dr Sheth predicts the strongest union of tomorrow would constitute China, India, Japan and South Korea.
The world will see a new Triad of Power. With democracy as its central theme, the relationship between United States and India would generate more positive vibes as compared to the relationship between United States and China which would be more of suspicion and threat. The future relationship between India and China, on the other hand, still remains a question as time and policies would define on the nature of progress.
Dr Sheth referred to China as China Inc. He praised China for working as a corporation, together with a Vision and Mission Statement and a broad Strategy for success. Today, the Chinese are rapidly learning from the Singaporean success story. His quote was that Shanghai tomorrow would be the next New York. It will rise to prominence as rapidly as New York did in yesteryears. But he had a note of caution for China. Because even though it has a solid start into the twenty first century, China will have to reform its political structure to adapt itself into the future.
Referring to India, Dr Sheth said that India had the 3D advantages namely Democracy, Demography and Diversity. What India lacked though was Discipline. In continuation to the Great Indian Success Story, Dr Sheth predicted the future of Indian BPO to be Global R&D. Quoting from the audience, he also highlighted the future threats that could be faced by India. Other than the environmental factors, the emergence of countries such as CALA (Caribbean and Latin America) and Eastern Europe would provide cheap labor and quality connectivity. Together with the protectionist politics of Western countries, India could find itself in a two-way squeeze that could hamper its progress as an outsourcing hub.
Towards the latter half of the century, the focus could shift towards the Africa Union and other CALA regions. With a population of more than 900 million, Africa is the second most populous continent after Asia. Its market primarily remains untapped and would become the focus of expansion for corporates.
After the presentation, Dr Sheth took time to answer the questions posted by the audience. His concluding remark that the biggest achievement for any individual would be to help an ordinary person achieve an extraordinary goal had the audience up on their feet giving him a rousing finish.
More of Dr Jagdish N. Sheth @http://www.jagsheth.net/
The writer is the Dubai correspondent at Youth Ki Awaaz.