The World Economic Order is witnessing a major disruption as the Digital Age transforms economies and the workplace at a pace most players are struggling to cope with, leaving behind a graveyard of failed businesses, large and small. This transition comes at a time when most large economies have started to look “inwards” after decades of Globalisation – whether it was Trump’s campaign of “Making America Great Again” or UK’s exit from EU or India’s “Make in India” initiative or Japan’s incentive to companies to move back from China. Think Local First has become a priority for most economies in recent years.
World shifting from Globalisation to Glocalisation
Before we delve into this shift towards Glocalisation, let us understand the spirit behind Globalisation and why did it start to fail nations. While trade in commodities (oil/coal, metals, grains/spices, gems and textiles) has always been prevalent, over the past 3-4 decades as industrialisation got to scale and Information Technology emerged, global trade shifted from commodities to manufactured goods and services, and became the major theme for most companies based on three fundamental tenets:
- Produce where Cost is lowest
- Create Scale to build barriers (on cost and innovation)
- Treat entire World as the Market and create demand (“Push” and “Use & Throw” models, driven by cheap finance)
Japan, followed by Korea, Eastern Europe and finally China leveraged the Globalisation wave to become the manufacturing hubs of the world. China today accounts for almost half of all manufactured goods commonly used world over.
However, the Globalisation trend has begun to fall apart and reverse due to three fundamental reasons leading to governments across the world to rethink:
- Rapid and large scale job loss – with cheaper imports, local industries in most countries took a big hit and the workforce could not be retrained/refocused for other newer jobs/roles. America has 25% of its jobs (that is ~4.5 million jobs) in manufacturing since the start of this century[i] and the import-led job loss in sectors such as automotive, electronics and consumer goods has hit them hard.
- Large disparity amongst nations and amongst populations within nations, putting countries and companies into debt/forex traps and economic turmoil. MSMEs, which are the largest employers in most countries, are increasingly unable to compete with cheaper imports from countries such as China and are staring at an existential crisis.
- New problems/challenges created at a pace faster than countries could solve (eg., handling pollution & waste as the “Use & Throw” culture grew, managing rapid urbanisation with jobs moving to Services, unsustainable use of natural resources for industrial scale production, water scarcity in many large cities and countries)
The conflicting forces of globalisation and nationalism are making governments and companies rethink their priorities, forcing them to come up with new constructs. In a post globalised world, communities and people find themselves on either side of an increasingly stark divide between winners and losers. Against this backdrop of multiple competing interests is the one unifying truth which is that we all share this planet and will collectively drive it to its rescue or doom.
A Unique Opportunity for “Bharat”
It is in this context that I believe India has a unique opportunity, coming as it does when the world is getting wary of China (the “factory of the world”) and looking for more reliable and trustworthy alternates. This is an opportunity that we can, or rather should, seize, not as India but as Bharat—a nation that not only dominated the global economy for over 2 millennia but was also the commerce and technological leader across fields and a spiritual guide for the world. An opportunity that we should seize not by trying to take our villagers to the cities, but instead by developing our villages sustainably and taking these solutions & products to the World.
As analysed by the IMF[ii], Bharat was over 30% of the Global GDP since the start of the Common Era right until the 15th century, even after centuries of invasions and loot by the Turks/Afghans/Moghuls. For over 1500 years, India was twice of what the US is today in share of the Global GDP! And it was only over the last two centuries under British rule that slowly, with systematic extraction of resources and wealth, and destruction of the local industries and ecosystems that India was reduced to <3% of Global GDP by 1947. More importantly, over these 2 centuries we got conditioned to become a market for British ideas and products, and a supplier of talent and resources for them.
However, even post-independence we continue to operate with the same mindset – a market for Western ideas and products, and a supplier of talent and resources to them. We remain in awe of global companies and products, prefer using either cheaper Chinese imports or over-priced Western products (many of which are not tailored for our use), and the US dream is still perhaps the biggest draw on most educational campuses. “Getting a job, especially in an MNC” is the ambition for most rather than being an entrepreneur or a scientist/innovator.
So strong has been this conditioning that we believe something only if a developed nation endorses it. Yoga and Ayurveda are classic examples – we continuously look for Western endorsement of these versus proudly develop and propagate these perfected sciences through well-funded efforts ourselves. Just as in equipment maintenance, preventive maintenance is better than breakdown maintenance, for the human body, preventive sciences such as Yoga and Ayurveda are better than the allopathic science which is akin to breakdown maintenance. Yes, the allopathic approach led by the global pharmaceutical majors has its advantages and we should learn and benefit from these, but we should also invest and take Yoga and Ayurveda to the world in a form and manner they can understand and appreciate. Most of the scientific laws/theories that we learn today as Newton’s or Einstein’s or Darwin’s theories or earlier ones such as the Pythagoras theorem, had been written about in depth in the ancient texts of Bharat (such as the Vedas and Upanishads) several millennia earlier. However, over the past millennia of invasions as our education systems were destroyed, we lost this knowledge and worse, we lost our faith in this knowledge.
One of the primary reason for this large gap in our understanding and appreciation of our heritage is that we lost the key to this heritage – Sanskrit. It is ironic that the language which is still the key to the largest bank of scientific knowledge (across biology, health and medicine, astronomy and forces of nature, physical and chemical sciences, architecture and spiritual sciences) and one that NASA or Germany are still pursing avidly, is restricted at best to a 3-year crash course in secondary school in its home country! And hence most Indians either are not aware of the knowledge of the Vedas and Upanishads, or at best read some short, often misrepresented/misquoted English translations by Western authors! During the last leg of foreign rule we not only lost our pride as a Nation, but also, with the destruction of our education system and knowledge of Sanskrit, we lost the confidence in our ability and worth. And post-independence we have not done much to rekindle it.
Countries like China, and before them Japan or Korea, did not get to their position of eminence by merely aping the West. Even as they looked to break into these markets, they continued to bank on their own manufacturing for their local consumption and continued to work on quality until they perfected and even surpassed the Americans and Europeans. They also invested heavily to take pole positions in the technologies of the future. For example, as far back as in 2005, it was a stated goal of China that while they lost out on the Internal Combustion Engine technology and will play catch-up to the West and Japan, on Electric Vehicles they will lead the world – and they did. The same goes for Digital Technology; Chinese funds and companies are the largest acquirers of Digital start-ups world over. Each of these countries, even as they connected with the rest of the world, never lost faith and confidence in their own capabilities and culture. That is why, as we in India develop our nation, we need to make our “Bharatiyata” our strength (and not consider it a disadvantage) and once again lead the world – economically, technologically and spiritually!
This mindset shift from India to Bharat is important for us if we are to regain our rightful place in the Global Order. And there are three specific reasons that are central to this shift:
- Need to Adopt a Leader/Innovator mindset instead of a Follower/Adopter mindset. If you go back a millennia (or even a few millennia before that), you will find that Bharat was the pioneer not just in textiles and agri-products but also in metallurgy, healthcare, education, astronomy, architecture and even administration. And the advances in each of these domains were unparalleled and sustained for centuries. However, over the years we lost this knowledge with a systematic and brutal destruction of our education system and texts. When Bhaktiyar Khilji burnt the Nalanda University, the Library burnt for over three months – such was the extent of knowledge! We need to bring the best of the World to India, but we also need to take the Best of Bharat to the World. And for this, we need to be proud of our heritage! A classic example is the Covid-19 pandemic. India has performed far better than most developed countries in terms of containing the virus and improving recovery rates. Most global experts had not expected this and had written off India as a country heading for a disaster. But when India effectively contained the virus, most were quick to attribute it to an outcome of better immunity due to bad hygiene. Unfortunately, many in India were happy to accept that as a rationale. However, the real reason perhaps is threefold – i) we use lot of immunity boosting ingredients in our daily diet (Haldi, Ginger, Tulsi, etc), ii) we have not yet fallen prey to the “pill culture” propagated by global pharmaceutical giants and hence our immunity has not been compromised, and iii) our natural cures (such as Ayurveda, Homeopathy, Yoga and even home remedies) are quite effective. After leading in controlling the pandemic, India is now leading the global vaccination effort—not only developing one of the best Covid vaccines and launching the largest vaccination program but also being a supplier to the world for the vaccines. Bharat led the world responsibly on handling of the pandemic and we should be proud of it! And taking a lesson from this, we need to think how we can help the world by marketing our products/solutions better, rather than enjoy being labeled as “primitive/unhygienic” or worst just “lucky”.
- Need to Solve for Our Challenges in Our Unique & Sustainable Ways. We are a large population and cannot just copy Western solutions for our needs and problems. Worse, we cannot let the West define these for us. If India was to develop the same way as the US or Europe, Earth will not be able to sustain the resource intensity required. Therefore, we need to define our needs and desires and identify our unique problems and then develop our own solutions for these. And with the scale in India, take these solutions to the world economically, especially to other developing countries.
A classic example is E-commerce. We have a vibrant and widespread retail network – so instead of adopting the standard western E-Comm model, we needed to build on our Kirana Retail Network to create the right blend of Omni-Channel that ensures the small retailer also thrives as you bring in efficiencies of scale through digital. However, most E-Comm players started with a Cut-Copy-Paste of the Western models and only now some of them are moving to leverage the Local Kirana! This not only gives them lower cost last mile access, it also ensures that our large population is productively employed. And such an approach will create a collaborative environment rather than an adversarial one. As we adopt new technology from the West, we need to keep in mind that many of these have been developed in the backdrop of nations with low population densities looking to solve for challenges of low manpower availability or higher cost. In India, our challenges are different, and our solutions need to build on our strengths even as we adopt good concepts from other countries, else we will create unsustainable models that will fail.
- Bring back business ecosystems that are “In Sync with Nature & Society” (in today’s language, Sustainable). While Western thought has traditionally been linear, Bharatiya systems have in general followed the “Closed Loop” principle and worked with nature as a stakeholder instead of as a resource. While the scale of industry and the population today cannot be compared with that of a millennium ago, the concepts and thought processes are still relevant as we design new business systems.
Let me illustrate this through an example one of my McKinsey colleague turned historian shared recently about the way the Temples of Chola Empire operated. When a rich person would come to donate money to a temple and ask for a Diya to be lit in memory of their loved one, the Temple priest would ask them to instead donate cows or goats to a poor family around the temple with the same money. The poor family would then give Ghee for the Diya for perpetuity and the extra earnings from the milk would help spread prosperity in the neighbourhood. A simple idea but sustainable!Another example is of the packaging industry. In Bharat we traditionally used jute or cloth bags that were not just better for the environment but also supported thousands of people in rural areas (from farmers to artisans to traders). And these handicraft-based ecosystems/industries didn’t just serve the Indian market but were also exported widely to other parts of the world. However, with the advent of plastics, these natural and sustainable solutions lost out due to higher initial purchase costs (though on a lifecycle basis they may still be cheaper) and perhaps convenience. And now, after seeing the negative impact of plastics, countries the world over are once again moving back to natural and sustainable solutions such as jute and cloth bags! However, unfortunately now the domestic ecosystems involved in such handicrafts have disappeared due to the lack of a market and rebuilding them will be difficult.
Similarly, if you look at most of the structures built in Bharat over the past 15-20 centuries, they very efficiently leveraged nature for lighting, temperature control and structural strength (so strong was the understanding of concepts of wind patterns, material sciences, astronomy, architecture). Take for example the Modera Sun Temple that was built a 1000 years ago. The temple was so perfectly designed and built that on the equinox days, the rays of the sun would fall straight on the diamond on the crown of the Sun God and light up the entire temple[iii]. Such was the knowledge of astronomy and the precision of architecture and geometry! Most of our forts/palaces and homes leveraged knowledge of wind and weather patterns, materials and architecture to provide comfort within throughout the year.
In the core Bharatiya philosophy, nature (including flora & fauna) and natural resources have always been considered as “partners” of the society which we leverage and not something that we exploit or fight against. And therefore, most cities/villages and economic activity was designed in a manner where, what was taken from nature was also returned to it in a usable form. Today we call it Sustainability. The world is slowly beginning to realise its importance. Renewable energy has become the fastest growing source of power with local customised solutions being the focus (solar power cycles/cars, transport, homes, gadgets and even clothes!). World is fast moving towards organic and vegetarian foods. Communities are banning use of plastics and exploring reusable/natural packaging material. Use of cycles is becoming vogue in several big cities. Sustainability and social responsibility are buzz words becoming core to the financial markets steadily. In Bharat, these principles were the core to most business systems that were developed and perfected over centuries!
I believe that today, India has a unique opportunity to not only reclaim its place in the Global Economic Order and take Bharat to the World, but also to lead the world spiritually! There is an urgent need for humanity to start a quest for the purpose of our existence and not just chase wealth/economic power – else we will rush towards social unrest and disorder (signs of which are loud and clear in all parts of the world by now). Our scriptures have most of the solutions and tools for this, and the onus is on us to share this with the world in a structured and coherent manner, being the North Star/Dhruv Tara for the world. But for this, we first have to rekindle our pride in our heritage and reinvest in Bharat. A pride that has been systematically destroyed by centuries of foreign rule and one that distorted narratives of our post independent historians have perhaps further dented (instead of revived).
Reviving this pride and the glory of Bharat will require six actions:
- Re-write the history of Bharat from Bharat’s perspective (not from the invaders perspective). Our young generations need to know of the glorious empires of Bharat that had a strong influence not just on South Asia but the broader world right until 1000 CE and of the brave Kings, Queens and people that fought off invading armies bravely right until the British rule. And even as we write about these 2000 years of our history, we must also go back a further 8-10 millennia when we had thriving civilisations in Bharat that were well ahead of other regions of the world. And draw out the lessons and implications from those that can help us today.
- Formalise Sanskrit, Ayurveda and Yoga education in schools to ensure that the young generation gets to learn these in a structured way from good teachers. It is sad to see that even today the more popular centers for these are today in universities in the US or Germany, rather than in India.
- Revive our local, rural ecosystems to make them self-sufficient for their requirements (our cities are already filled to the brim)! We need to rethink how our local administration (SDMs, DMs, Collectors) are re-oriented to operate as Development Officers/CEOs, and form partnerships with industry and local communities to create economic ecosystems building on the strength of each district (the Indian Government has started this thinking but it will need strong partnership with industry to make this work).
- Encourage entrepreneurship and business/industry. We still continue to have a strong hangover of the British era where money-making by Indians was looked down upon/discouraged. And even today, in the general public discourse, industry is looked at with suspicion in policy making, considered as anti-poor and normally at the receiving end of additional taxes or regulations! This needs to change if we want to be a global economic power.
- Develop/create schemes to encourage companies and educational institutes to invest in R&D, and create an ecosystem and regulatory framework to support/incubate start-ups in certain focused sectors (the recent move on defence manufacturing is an excellent example of what could be done in many other sectors).
- Fiercely defend our Industry in global negotiations. All countries from the US to EU to China fiercely support their industry globally to help create new opportunities for them in global trade. This is a core agenda for the foreign policy of most countries and we must do the same for our industry if we need to give a strong competition to established global players
The Prime Minister’s call for Atmanirbhar Bharat and going Vocal for Local, would require a change in mindset. No longer can India be a mere markets for foreign ideas and products and subservient to foreign interests. It devolves on each one of us as Citizens and the Companies/Entrepreneurs to truly reclaim the legacy of Bharat – economically, technologically and spiritually.
(Author Brief Bio: Rohit Pathak is the CEO in an Indian MNC and a Director at Indian Electrical & Electronics Manufacturer’s Association. He is an Alumnus of IIM-Ahmedabad and BITS-Pilani, and was an Associate Principal at McKinsey & Company prior to moving to his current company.)
[i] US Labor Department, Haver Analytics
[ii] “Statistics on World Population, GDP and Per Capita GDP, 1-2008 AD”, Angus Maddison, IMF
[iii] Government Tourist Guide, Modera Sun Temple