Friday, 12 December 2008

Are we De-coupling?

The Days of looking towards the west for market cues in the morning are on the way out. we need to look inwards and evaluate our economic conditions to take investment decisions. the process of decoupling of our economies with the western world has started in right earnest. Once the bail-out of the auto majors happens and takes concrete shape, that will be the last nail in the coffin of the way in which the 20th century business was carried out. 21st century will be different, companies will be required to tighten their belts, give away their private jets and start traveling economy class, eat food not designs and so on and so forth.
This era is the point at which the world will formally move from the industrialised economy to the knowledge economy. Only India is in an unique position where all the three waves of civilization defined by Alvin Toffler co-exist at the same time. That is the order of the day. governments are going to be more involved in business and more businesses are going to be more involved in government along with the others. India needs to learn a few things from this, here government is in serious businesses like
Power - equipment, generation, transmission, distribution, Iron and Steel - mining, smelting and manufacturing, Insurance, Banking, Heavy Equipment, Oil Exploration, Petroleum Refining, Marketing, Petrochemicals, Fertilizers, Food Processing, Heavy Engineering, etc..
The same may happen to the US in the next three decades.
The point I was trying to make is that "Government" has found that it also needs to be in "Business" if it has to Govern! (which has been the case in India for the last five decades).
So we come back to the cycle of Nationalization-Liberalization-Privatization-Globalization cycle which keeps on repeating over the decades.
Now the Government of India needs to stop and take a re-look and not get into the cycle. Just like all the three waves that co-exist in India, The economy also needs to strike a balance between public and private ownership to keep the economy going, without the hiccups a la US of A.

1 comment:

Russell Cavanagh said...

I think, with the larger companies toppling or even crashing, the future will be more localised economies. Small and medium sized businesses will likely be the foundation of a future economic landscape that we in the West will find ourselves living in. India will, I suspect, have a getter and more equal footing in world prosperity (hopefully for all of your people).

Good luck for 2009.

Best wishes from the UK.