In my last article, I talked about how this generation has an onerous challenge to create a new order in India. The opportunity in the challenge is that this new order would become the default Indian way of life.
One thing we can learn from USA is their relentless focus on business and economy. The key theme of every possible election in USA has been wages, markets, and capital accumulation. If one was to make a hierarchy of issues of importance in most of the successful economies, you’ll find out that softer topics related to social welfare, health, abortion, and education are never the top priority. It takes us to the next obvious question – Why is it so?
A widely used theory in economics argues that the economy of USA benefited a lot from increasing regional imbalances after the great depression when the rich were getting richer and poor were getting poorer. Tax breaks were given to the rich and corporations; thereby, stimulating the entrepreneurial incentive. The period from 1940 to 1970 was a glorious period of USA when it stamped itself as the default superpower of the world. In the same period great brands and companies took the leadership in their respective categories. It further strengthened the geo-political power of USA to create the new global order with so-called “multilateral-trade” bodies – IMF, World Bank and WTO.
How do the market forces work? More money remains in the private sector leading to business investment such as buying new factories, upgrading technology, and equipment as well as hiring more workers. In the later periods of the century, America witnessed a trickle-down of wealth; henceforth, boosting the standard of living. What started as a policy of disproportionate allocation of resources ended with creating economic equality.
However, just tax cuts are not sufficient. What is needed is a complete policy overhaul; in fact a cultural change like never before. The entrepreneurs in India need an ecosystem that allows them to flourish. There are multiple layers to get very ordinary work done, despite tax holidays to corporations. There are always bottlenecks despite the continuous alteration of public policy, which completely destroys the spirit of entrepreneurship. It starts with appreciating benefits of capitalism – it is the only proven route to social welfare. When there is competition, there is innovation and when there is innovation there is a cheaper way to do the same business activity. Where many in India would criticise capitalism as good for business and bad for people, the numbers from USA prove it is rather the other way around.
I believe that entrepreneurs do the service of highest order to their country. A businessman has to create value for others before capturing value for himself. As a result, capitalism is the greatest incentive system in the world for focusing on others and their needs. And the result of that is empathy and understanding. Often, an entrepreneur’s net worth is merely the register of how much he has improved the lives of his fellow human beings.
The cultural change has to come. Government should have a policy to create awareness about the businessman and industrialists as national icons. Just to share a really disturbing fact – no Indian entrepreneur has ever been given a Bharat Ratna. Firstly, the government should consider to create more management institutions in India with a relentless focus to create not just managers, but leaders with entrepreneurial acumen. They can be supported through government supported incubation centres to support early stage ventures. There should be landmarks importance such as a museum that celebrates the contribution of entrepreneurs from India. We need people of India to set the right role models.