While reading Harvard Business School professor Michael Porter’s book titled “The Competitive Advantage of Nations” a decade ago, I was struck by the fact that he did not mention any great economic policy issues as key to economic growth despite talking about economics as key to a region’s economic development. That was perhaps in 1995 when I was an MBA student at the Hindu Institute of Management (HIM), Sonipat (near Delhi) after obtaining a degree in economics from Delhi University.
While Delhi-based economists were all fire and fury about economic liberalization of India under Man Mohan Singh as Finance Minister, Michael Porter’s bestseller was focused on totally another issue, which perhaps the august Indian economists did not know or care about. As India liberalized its economy, the country’s entrepreneurial class began to gear up to face global competition. Some died out, e.g., Parle sold its top cola brands in the early 1990s to Coca Cola for a sum greater than its annual sales. Coca Cola is still making losses on this purchase.
RURAL HARYANA’s GROWTH despite violence
Which India was growing then?
Perhaps it was mostly metro-based with some big cities of South India and Punjab thrown in. Sonipat was growing too, thanks to its nearness to Delhi (30 miles by road) , shedding its rural, rustic image with nearly half the city population commuting daily to Delhi and new factories coming up in the outskirts bellowing all sorts of smoke and creating wealth and modern residential areas outside the old city precincts. Punjabis dominated the scene despite Haryana having been carved out as a separate state in the 1960s. Punjabis knew business practices, having ruled (north) Indian business in Kolkata and other areas also before Marwari businessmen from Rajasthan took over. Especially successful were the immigrants from Punjab who had moved to Delhi after India’s partition from current Pakistan. They were risk takers and had perhaps a global view.
The Hindu Institute of Management, Sonipat was perhaps a result of a desire among local Haryanvis to learn modern business practices and leapfrog over the ruling Punjabis. The Hindu College run by the Hindu Society was a tough place; it was rumored that only a tough guy who had allegedly killed a few others was chosen or elected to lead the College Student Union as its President. I met a few such presidents during my two-year stay in the city where they dominated – and they seemed to live up to that image. Sonipat was a tough and wild place where crimes against women were the highest in the nation as per the local top IAS officer Mr. Khullar (a Punjabi army officer’s son as he proudly mentioned), who came for a seminar to HIM once; it also had the only all-women police station in India at the time. Our female classmates who came from all over India had to have a male escort wherever they went. A local classmate said that even when he was giving a ride to his sister on his bike, people would make derogatory comments from the roadside. HIM’s alumni have among them, a director of Merrill Lynch, USA; that was his last education degree though had been admitted to Harvard MBA.
TOUGH LIFE & GROWTH: Haryana vs Assam
Currently, Northeast India has a similar tough image in the minds of those not familiar with the region. Sonipat benefited from its nearness to Delhi despite its drawbacks. Assam and other Northeastern states have perhaps more friendly attitude the women but are remote and thus do not feel the heat from globally competitive companies. Of course, there are many fronts including initiatives by NRAs for the upliftment of the regional economy – but that perhaps seeking more policy oriented approach than the competitiveness-based view promoted by Michael Porter. Many bodies squarely blame the government for all the ills of the society (perhaps not without reason) but to become a nationally or globally competitive society one has to be aware who or what you are competing against and what benchmarks one needs to set up. One should identify strategies which are acceptable and which are not.
On the other hand, Haryana has a tough, rural image where violence and machismo play a major role in the society but it is changing thanks to its realization that despite agrarian skills and resultant prosperity it needs to become modern. Its residents are selling off costly local farmlands and moving to buy 10 times bigger inexpensive plots in Madhya Pradesh, Rajasthan and other vast, less populated regions. Local Haryanvi expertise in agriculture is ensuring that they are successful farmers wherever they go – be it Chhatisgarh, hundreds of miles away from home, or closer in Rajasthan’s dunes watered by the Indira Canal. The current Chief Minister of Rajasthan is also in power of the Haryana lobby, she belonging to that community and hailing from Gwalior (in Madhya Pradesh) - a migrant herself.
BUSINESS SPIRIT – American Spirit
Some have stressed the importance of developing the entrepreneurial spirit among Assamese so that Assamese businesses overtake those run by other communities. However, there seems a deep-rooted distrust and feeling that private business is unethical and that businessmen are all cheats – this I have noticed whenever we bring up the issue on Assam Net (www.assamnet.org). Perhaps for that reason most educated people tend to opt for high paying jobs rather than face the rough and tumble of private entrepreneurship. A few stress that by training local youth to fill up forms needed for getting loans, etc., will help. Maybe, it will bring a sea change, maybe not. But it is worth a try. I am told that in USA the government reserves 10% of its contracts for small businesses to help them come up. Also I am told that 60% of US GDP comes from small business revenue and its part of American spirit to promote, support and nurture small businesses started by friends, neighbors, colleagues etc., etc.
Here is what Michael Porter has to say about India now in 2006/07 www.youtube.com/watch?v=A0xyGWrCQtw
The most dynamic country in the world! Now some would say - “which India?”
Can we learn that aspect of American life – rather than just learning how to play the American guitar and singing rock music!!!!! Can we get over complaining about lack of entrepreneurial spirit and violence and move on?
- Umesh Sharma, Washington DC
http://jaipurschool.bihu.in
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