tag:blogger.com,1999:blog-17815654181359092292024-02-20T03:57:38.036-08:00Stephen Allison's Cal Poly MBA India Trip BlogStephenhttp://www.blogger.com/profile/08848760923308214184noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-1781565418135909229.post-17034920305034215952013-07-16T14:56:00.001-07:002013-07-16T14:56:55.092-07:00Final Reflective Paper - Post Cal Poly MBA India Trip<div dir="ltr" style="text-align: left;" trbidi="on">
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Final Reflective
Paper<o:p></o:p></div>
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<span style="mso-tab-count: 1;"> </span>During the
last 9 months we have read and written reviews of two books, wrote fifty
responses on articles about India, and read and reflected on India’s five year
economic plan in preparation for the two weeks journey abroad. During our time
in India we had thirteen meet-and-greets with leaders of Indian business, some
purely Indian companies and others Indian extensions of world-wide
corporations. We also accomplished some vital sight-seeing, such as visiting
Qutb-Minar, the tallest minar (a tower-monument attached to a Muslim mosque) in
India and built around 1200 as a signifier of the beginning of Muslim rule in
India. We also saw Akshardham, the largest Hindu temple in the world, built by
3,000 volunteers and 7,000 artisans. Finally, we made the long trek to Agra to
visit the Taj Mahal.<o:p></o:p></div>
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<span style="mso-tab-count: 1;"> </span>The trip
was a highly valuable one personally. I grew to know my classmates better as we
shared the unique experiences. We all now have a spiritual connection to a far
away place and culture. We also had the privilege of meeting some truly special
people that I would not have met outside of Cal Poly. I have made it a point to
take away at least one lesson or piece of knowledge from each experience. For
example, through the lecture at the Yoga Ashram we received a lesson from an
intelligent, passionate, insightful teacher about the path from knowledge to
wisdom, the eastern view on the benefits of the destruction of the self, and
Yoga’s role in aiding mediation. From Lemon Tree’s Rahul Jagiasi we leaned of
the importance of rigorously controlling costs because costs are the one thing
management has complete control over. We also learned of the problem of India’s
poor attitude hiring the disabled. Those who believe in reincarnation view down
upon the disabled because bad deeds committed in a past life have condemned
them to their disabilities. Lemon Tree is helping shift that attitude by hiring
6% handicapped workers, to be risen to 10% in the next few years due to their
success as productive employees.<o:p></o:p></div>
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<span style="mso-tab-count: 1;"> </span>However, I
don’t want this paper to ramble on and on like this listing off each
experience. Instead I would like to address some of the suggested topics listed
in the course syllabus, since I believe what I learned on our trip <i style="mso-bidi-font-style: normal;">and</i> our through my preparation is
valuable for answering them. To begin, I believe a service that could be very
successful is a medical tourism travel agency. Through the book <i style="mso-bidi-font-style: normal;">Billions of Entrepreneurs</i> I learned that
an American can buy a round trip ticket to India, receive a top notch heart
surgery, and spend a week recovering in Goa all for around $10,000 out of
pocket. In America, <i style="mso-bidi-font-style: normal;">just the surgery</i>
can cost $150,000. Why not offer a service that plans a hotel, meals, private
transportation, the hospital treatment, a recovery plan, and airfare all for
the customer/patient. Even with a 100% profit margin I can charge the
customer/patient $30,000 tops for the most complex of surgeries, which is still
<i style="mso-bidi-font-style: normal;">one-fifth</i> the cost of American
healthcare! The big hurdle will be overcoming the stigma that Indian hospitals
and doctors are inferior to American facilities, however after a few success
stories I believe Americans will be more open to it. Personally, when I was
treated for my stomach infection I was a little hesitant to receive an injection,
but my care was excellent and I only paid $20 for a doctor’s consultation,
injections, and prescription drugs delivered to my hotel room!<o:p></o:p></div>
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<span style="mso-tab-count: 1;"> </span>On this
trip I was forced out of my comfort zone in <i style="mso-bidi-font-style: normal;">many</i>
ways. In fact, the furthest I have been out of the country before this trip was
Mexico and that was a decade ago. The heat in Agra, the long plane rides, the
constant stomach illness, sharing a bedroom, the terribly uncomfortable dress
shoes (but that one is my own fault!), the panhandling in Delhi’s open air market
all pushed me far outside of my comfort zone. But the worst of all was the
train ride. I felt afraid to touch anything, even to sit down at the station. I
wasn’t excited to sleep in a cramped bed above complete strangers. And of
course the food gave me terrible indigestion forcing me to brave the railway
restrooms. What I learned from these experiences is that we cannot grow in
comfort. Even when studying in the physical comfort of my home, the library or
a café the reading, writing, thinking, and memorizing is forcing my mind to
extend itself beyond its comfort zone. When we are comfortable we are standing
still, absorbing or producing nothing that will push us to the next level of
achievement. I think this is the most valuable thing I learned in India.<o:p></o:p></div>
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<span style="mso-tab-count: 1;"> </span>So how did
I grow from all of this nasty un-comfortableness? That’s a hard question, and I
think the full answer will only be seen with more time. I can say that I feel
proud of myself for choosing the hard path. As a two-year student I didn’t need
take this class for credit to graduate. But I knew that this was too good and
too special of an opportunity to pass up. Almost all higher-cost MBA programs
have a <i style="mso-bidi-font-style: normal;">required</i> trip like this one
telling me that this is a vital part of a full MBA education. If I had not
taken the trip I would have regretted it, felling that my education was
incomplete. Aside from pride, I feel appreciative of my education. Seeing the
coolies carrying our water and bags at the train station made me truly believe
that education is the key to a better life. I also know that education isn’t
everything though; the hunger that Indian’s feel to better themselves and their
country is something that complacent Americans can learn from. I know of many
Americans who are threatened by China’s growth; instead of fear and hatred,
inspiration can be wrought out of China and India’s stories of ambition for a
better life. If education is the key ambition is the push that bursts the door
wide open.<o:p></o:p></div>
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<span style="mso-tab-count: 1;"> </span>What
surprised me the most about India is the disparity of the rich and poor. In
America the level of inequality in the distribution of wealth is a hot social
topic. In Downtown Los Angeles I have walked the streets filled with homeless
and only a handful of miles away sat inside the corner offices of the elite law
firms, but nothing could have prepared me for the $1 billion single-family
monolith standing tall above the city-within-a-city of the slums. Or Delhi’s
massive construction projects contrasted with forgotten, decaying street-side
ruins. India is a country of agonizing growing pains. It cannot be denied that
the last ten years have been beneficial, but not to everyone. 81.1% live on
less than $2.50 a day, and 96.9% live below $5 a day.<o:p></o:p></div>
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Being in India is like being in the
middle of a fulcrum, with stubborn attitudes and practices of old, refusing to
be lost to time, balancing with the growing pressure of modernization and
globalization pushing down ever harder. At some point the bad habits that are
tragically taken for granted, such at the untrustworthy government and legal
system, will become weightless under their obsolescence. And it is India’s
private sector that will lead its government towards efficiency. We have seen
victories such as strong CSR initiatives coexisting with the financial success of
Lemon Tree hotels, competition from the National Stock Exchange cleaning up the
inefficiencies of the Bombay Stock Exchange back in 1992, and the success of
private hospitals to provide (relatively) inexpensive high quality healthcare.
The private sector is forcing the public sector to realize its own glut. The
public sector must trim its fat or feel the pain of holding its country behind.<o:p></o:p></div>
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<div class="MsoNormal" style="text-indent: .5in;">
This has been a marvelous
experience for me. Reading about India and visiting are two completely
different things. I now have a personal connection to this far away land and
culture that I did not have before and feel that I can have a meaningful
conversation about India with anyone else who has this connection. I got to see
the wonders of the Taj Mahal and Akshardham, tasted the street food, contracted
Delhi Belly, rode the railway, met the movers and shakers of Indian business,
experienced the heat of Delhi and the monsoons of Mumbai, felt the instability
of the Rupee, and connected with my classmate on a new level. A trip like this
is once in a lifetime and should be <i style="mso-bidi-font-style: normal;">required</i>
for all MBA students, so it pains me to hear that it will not be offered next
year at Cal Poly. I urge the powers to be to bring it back; it’s too good of a
thing to let die.<o:p></o:p></div>
</div>
Stephenhttp://www.blogger.com/profile/08848760923308214184noreply@blogger.com0tag:blogger.com,1999:blog-1781565418135909229.post-53225946701552145292013-06-14T12:42:00.004-07:002013-06-14T12:42:35.829-07:0012th 5-Year Plan
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<b style="mso-bidi-font-weight: normal;"><u>India’s 12<sup>th</sup> 5-Year Plan: What does the future of India’s
economy look like?</u></b></div>
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<br /></div>
<div class="MsoNormal" style="text-indent: .5in;">
<b style="mso-bidi-font-weight: normal;">Introduction<span style="mso-tab-count: 2;"> </span></b></div>
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<br /></div>
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<span style="mso-tab-count: 1;"> </span>While India
has seen major growth in GDP in the last decade, not all of the population has
realized economic gains. It is no secret that India has done a poor job of
solving its social problems like poverty and discrimination stemming from the
ancient and lamentably prevalent caste system. Leaders are now forced to solve
this issue, not only because it is the humane thing to do but also because the
key to further economic growth is tapping into this massive potential labor
force. The authors of the 12<sup>th</sup> 5-Year Plan called this <i style="mso-bidi-font-style: normal;">inclusiveness</i> and it is the overarching
theme from the beginning to the end of the paper. While evidence supporting how
inclusiveness will strengthen Indian business can be found in almost every
chapter of the 12<sup>th</sup> Plan, for this paper I will focus on the
chapters detailing the future of India’s farm sector, manufacturing,
infrastructure projects, and innovation.</div>
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<br /></div>
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<span style="mso-tab-count: 1;"> </span><b style="mso-bidi-font-weight: normal;">The Farm Sector</b></div>
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<br /></div>
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<span style="mso-tab-count: 1;"> </span>If India is
serious about empowering and including the impoverished in its growth, the
place to start is the farm sector. Half of the population of India is dependent
on some sort of farm activity and expansion of farm incomes is the most potent
weapon for reducing poverty. The gap between rural and non-rural incomes is
enormous and employment growth in non-agricultural careers has not grown
sufficiently to reduce the population dependent on agriculture. The attitude of
the 12<sup>th</sup> Plan is that beyond the next five years a goal should be to
reduce India’s dependence on agricultural jobs, but for now that will not
change and India should make the agricultural sector as efficient, comfortable,
and high-paying as can be.</div>
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<span style="mso-tab-count: 1;"> </span>There are a
few tactics that can be employed to achieve this goal. The first is improvement
of water management. The agricultural sector is in desperate need of
modernization of irrigation systems like a move away from flood irrigation
towards sprinkler and drip irrigation, extensive rainwater harvesting combined
with a groundwater recharge, and steps to improve governance in water
management. Water management improvements also mean more clean drinking water,
a basic resource that India still has trouble providing. With high quantities
of cleaner water available, the overall health of the population will increase,
leading to higher levels of productivity. It will also put less of a burden on
India’s troubled public healthcare system. </div>
<div class="MsoNormal" style="text-indent: .5in;">
Another problem is the overuse of
inefficient or downright bad farming practices. For example, chemical
fertilizers widely used because they are heavily subsidized. This needs to end
in favor of organic fertilizers as overuse of chemicals degrades the quality of
soil. Adoption of a farming systems approach which adopts livestock,
fertilizer, crop rotations and composting as soil nutrient enhancers would do a
world of good for the farm sector.</div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span><b style="mso-bidi-font-weight: normal;">Manufacturing</b></div>
<div class="MsoNormal">
<br /></div>
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<span style="mso-tab-count: 1;"> </span>As time
passes, India’s population will be less dependent on agriculture as the youth
decides to pursue urban career choices. While India’s service sector has
exploded, primarily in providing IT services for foreign countries, the
manufacturing of goods has not. Manufacturing is only 15% of GDP, very low when
compared to other developing nations China and Thailand, at 34% and 40%
respectively. The services sector alone cannot support the 250 million
additional income-seekers that will join the labor force in the next 15 years.
Unless the manufacturing sector can provide at least 100 million additional
decent jobs, it will be difficult for India’s growth to be inclusive.</div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>One
challenge facing manufacturing is the fact that the best of India’s engineering
talent is going into IT. Many later on go through business management school
and end up working for financial, consulting, and other service industries. Skilled
workers, good supervisors and managers are essential for the success of any
industry and India is faced with the question of how to attract these workers
to manufacturing.</div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>Another
reason why manufacturing is struggling is due to poor policy. For example, in a
study of countries with strong manufacturing industries it was revealed that
there was a very good consultation process between producers and policy-makers
and for establishing coordination amongst policy-makers. In these countries,
the primary goal of planning is to achieve learning and improving processes,
not for budgets and allocations like it is in India.</div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>To turn
things around, India has developed the National Manufacturing Plan. The
objective of the plan is to increase growth 12-14% in the medium term. This
growth must be sustainable in the long term and create the jobs needed. Special
focus will be placed on some sectors of manufacturing which will enable the
country to rapidly achieve its goals. Such sectors include textiles, garments,
leather, footwear, gems and jewelry, and food processing for job creation.
Sectors that will deepen technological capabilities in manufacturing include
machine tools and IT hardware and electronics. Manufacturing technology for
energy security include solar energy, clean coal*, and nuclear power
generation. If infrastructure growth is to be a reality in India, manufacturing
of heavy electrical equipment and heavy transport, earth-moving equipment is
necessary. Finally, sectors where India already has a competitive advantage,
such as the automotive, pharmaceuticals and medical equipment, must not be
ignored. Policy makers and consultants must analyze the best practices of these
sectors and see if they can fit into sectors in need of growth.</div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span><b style="mso-bidi-font-weight: normal;">Infrastructure / Public Transit</b></div>
<div class="MsoNormal">
<b style="mso-bidi-font-weight: normal;"><span style="mso-tab-count: 1;"> </span></b></div>
<div class="MsoNormal">
<b style="mso-bidi-font-weight: normal;"><span style="mso-tab-count: 1;"> </span></b>Inadequate infrastructure was
recognized in the 11<sup>th</sup> plan as a major bottleneck to growth. The
total investment in infrastructure had risen from 5.7% of GDP in the base year
to 8.0% in the final year. A large contributor of this growth is due to the
successful implementation of PPP<span style="mso-spacerun: yes;">
</span>(Public-Private Partnership) financing projects. However the pace of
investment had favored some sectors, such as telecommunication, oil and gas
pipelines, while neglecting others, such as electricity, railways, roads and
ports. In the 12<sup>th</sup> year plan these neglected sectors need special
attention.</div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span>As
inclusiveness of India’s poor into the economy increases, requirements of
transport are likely to grow significantly faster than overall GDP growth.
India has the second largest road network in the world totaling 4.2 million
kilometers, but only half of it is paved and 2% of the length is national
highway. Expect big changes here. A master plan for adding 18,637 kilometers of
expressways will be taken up. These roads will be 4 or 6 lane and feature both
passenger and freight movements. In addition, neglected single lane national
highways will be repaved and upgraded to two-lane standards. Finally, it is
essential for India to develop state highways and rural roads to ensure full
connectivity. Rural roads are known to be a very effective catalyst for
economic transformation due to connecting India’s rural poor to markets,
hospitals and schools. It is necessary that universalization of rural
connectivity be completed during the 12<sup>th</sup> Plan.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="mso-tab-count: 1;"> </span><b style="mso-bidi-font-weight: normal;">Innovation</b></div>
<div class="MsoNormal">
<b style="mso-bidi-font-weight: normal;"><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span></b></div>
<div class="MsoNormal">
<b style="mso-bidi-font-weight: normal;"><span style="mso-tab-count: 1;"> </span></b>The President of India that this
is the “decade of innovation.” Innovation is indeed key to growth, for any
nation, but there are three distinct values that make “Indian Innovation”
unique. These values are also squarely in line with the theme of inclusiveness:</div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">1.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><i style="mso-bidi-font-style: normal;">Focus on
finding affordable solutions for the needs of the people without compromising
quality.</i> This is especially evident in India’s automotive and private
healthcare industries, where one can buy a new car for $2,500 or receive a top-quality
heart surgery for $5,000. In fact, it is possible for an American in need of
heart surgery to pay only $10,000 for the procedure, airfare, <i style="mso-bidi-font-style: normal;">and</i> a one-week vacation. Compare this to
$150,000 for the same surgery in the United States.</div>
<div class="MsoListParagraphCxSpMiddle" style="margin-bottom: 12.0pt; mso-add-space: auto; mso-layout-grid-align: none; mso-list: l0 level1 lfo1; mso-pagination: none; text-autospace: none; text-indent: -.25in;">
<i style="mso-bidi-font-style: normal;"><span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">2.<span style="font: 7.0pt "Times New Roman";">
</span></span></span></i><i style="mso-bidi-font-style: normal;"><span style="mso-bidi-font-family: Times;">Desired outcomes are produced by innovations
in organizational and process models that deliver to people the benefits of
technologies that may be developed in scientific laboratories.</span></i></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">3.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><i style="mso-bidi-font-style: normal;">Innovations
in the process of innovating to reduce costs of development.</i> For example,
management of intellectual property rights in India must me improved. There is
a large fear of patent monopolies creating artificially high prices, which hurt
the consumer, however without a patent there is little incentive to innovate.<span style="mso-bidi-font-family: Times;"> One innovative path to creation that was
successfully used in India is Open Source Drug Development, which takes key
principles in open source computing (collaboration and open access) and applies
them to drug development. It accelerates the discovery process by
mass-collaboration while keeping expenditures to a minimum by encouraging
incremental contributions by volunteer scientists, removing the ability to
patent any results. It de-links the research and development costs to the end
sales-price of the product, giving drug manufacturers the ability to produce
new drugs at a very low cost.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="margin-left: .25in; text-indent: .25in;">
<span style="mso-bidi-font-family: Times;">The Indian approach to innovation focuses on
the efficiency of innovation and how the outcomes of innovation will benefit
India’s people, especially the poor. This contrasts sharply with the
conventional approach, mostly focused on increasing the inputs of science and
technology R&D and measurements of the number of papers and patents
produced. This is primarily a research-based approach to innovation. In
contrast, conversion of R&D results to products for the people requires the
efforts of an ecosystem of players: entrepreneurs, researchers, finance
providers, business enterprises and policy-makers. Therefore, India must
provide for the needs of these enterprises and encourage collaborative
communication amongst them.</span></div>
<div class="MsoNormal" style="margin-left: .25in; text-indent: .25in;">
<span style="mso-bidi-font-family: Times;">It is often said that India is a country
with many successful experiments that never achieve scale. By having India’s
innovation ecosystem operating collaboratively, Indian businesses will be
connected to a larger pool of customers and good ideas will swiftly transform
into needed products.</span></div>
<div class="MsoNormal" style="margin-left: .25in; text-indent: .25in;">
<br /></div>
<div class="MsoNormal" style="margin-left: .25in; text-indent: .25in;">
<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: Times;">Conclusion</span></b></div>
<div class="MsoNormal" style="margin-left: .25in; text-indent: .25in;">
<br /></div>
<div class="MsoNormal" style="margin-left: .25in; text-indent: .25in;">
<span style="mso-bidi-font-family: Times;">The most endearing characteristic of this latest plan
is its humanity. India is not a nation that will tolerate its poverty problem
any longer. India's social problems have caused a painful divide among the people that is weighing her down in the past. In the new plan, India does not separate social progress from economic progress; as
the poor become educated, healthy, and included in the new bustling economy all of India will grow with them.</span></div>
<div class="MsoNormal" style="margin-left: .25in; text-indent: .25in;">
<span style="mso-bidi-font-family: Times;">Of course this will not be easy. The current
infrastructure is not compatible with the inclusion of India’s poor; new roads
must be built to connect them with schools, hospitals and markets. The farm
sector must be modernized to improve the wages of India’s rural workers, still
the majority of the population. The manufacturing sector must be strengthened
to offer needed future employment opportunities. And frugal, practical
innovation must be encouraged, because without innovation that can change the
lives of the many India is doomed to remain stagnant.</span></div>
<div class="MsoNormal" style="margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: 12.0pt; mso-layout-grid-align: none; mso-pagination: none; text-autospace: none;">
*<Gets on my soapbox> Personally I am against
the adoption of coal. Policy to move away from this ancient fuel should be
embraced, and towards it discouraged. Coal is one of the dirtiest forms of
energy on the planet and is literally suffocating the people of China.<span style="mso-spacerun: yes;"> </span>I would hate to see India in the same
predicament. It is also once of the biggest carbon emission polluters of any
fuel, making the act of burning coal largely responsible for climate change.
“Clean” coal is a lie; the only difference is that the emissions are captured
and buried deep underground in a process called carbon sequestration. This is
not solving any problems, only sweeping them under the carpet.</div>
Stephenhttp://www.blogger.com/profile/08848760923308214184noreply@blogger.com0tag:blogger.com,1999:blog-1781565418135909229.post-38577634502610340082013-03-22T12:59:00.000-07:002013-03-22T13:27:39.953-07:00Billions of Entrepreneurs Book Review<style>
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<br />
<div align="right" class="MsoNormal" style="text-align: right;">
<b style="mso-bidi-font-weight: normal;">Stephen Allison</b></div>
<div align="right" class="MsoNormal" style="text-align: right;">
<br /></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<b style="mso-bidi-font-weight: normal;">Billions of Entrepreneurs Book Review</b></div>
<div align="center" class="MsoNormal" style="text-align: center;">
<br /></div>
<div class="MsoListParagraph" style="mso-list: l1 level1 lfo1; text-indent: -.25in;">
<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">1.<span style="font: 7.0pt "Times New Roman";">
</span></span></span></b><b style="mso-bidi-font-weight: normal;">Overview</b></div>
<div class="MsoNormal" style="text-indent: .25in;">
It’s no secret that the rise of
China and India has been on the minds and tongues of Americans for the better
part of the last decade. Tarun Khanna, professor at Harvard and expert on
emerging markets, attempts to give readers insight into these two countries by explaining their differences, such as:</div>
<div class="MsoNormal" style="text-indent: .25in;">
<br /></div>
<div class="MsoNormal" style="text-indent: .25in;">
“Why can China build cities
overnight while India has trouble building roads?”</div>
<div class="MsoNormal" style="margin-left: .25in;">
“Why does China prohibit free
elections while Indians, in free and fair elections, vote in officials with
criminal records?”</div>
<div class="MsoNormal" style="text-indent: .25in;">
“Why has China ‘Indianized’ in the
past while India shunned China?”</div>
<div class="MsoNormal" style="text-indent: .25in;">
<br /></div>
<div class="MsoNormal" style="text-indent: .25in;">
Khanna concludes that due to
cultural, religious, and ideological differences in their histories, India’s
strengths have become China’s weaknesses and vice-versa. For example, because
of China’s communist history, China now has developed a very strong public
sector but weak private sector. In contrast, India’s history of British rule
has influenced its current democratic model, which promotes a strong private
sector and underdeveloped public sector.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l1 level1 lfo1; text-indent: -.25in;">
<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">2.<span style="font: 7.0pt "Times New Roman";">
</span></span></span></b><b style="mso-bidi-font-weight: normal;">How
China and India Differ</b></div>
<div class="MsoListParagraphCxSpLast" style="margin-left: .75in; mso-add-space: auto; mso-list: l0 level3 lfo2; text-indent: -.25in;">
<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">i)<span style="font: 7.0pt "Times New Roman";">
</span></span></span></b><b style="mso-bidi-font-weight: normal;">Information
Transmission</b></div>
<div class="MsoNormal" style="text-indent: .25in;">
For years China has claimed that
media channels, like television and newspapers, can be used to promote
destabilizing propaganda. “Stability overrides everything” is a central belief
in the Chinese government and censorship is a long accepted tool to promote
stability. The problem is that censorship can potentially interfere with
profitable communication. As the world is now listens to China and China
listens to the world, transparency of information can lead to valuable
connections.</div>
<div class="MsoNormal" style="text-indent: .25in;">
In India, no subject is taboo for
the press. Every shade of opinion is expressed free of government influence.
Every political crisis is reported and politicians are openly criticized in
magazines, newspapers, and on television. But although India’s information
transmission is transparent, it is affected by what statisticians call white
noise. Because everyone is free to express whatever he or she likes, the truth
is hidden in a sea of irrelevant, although not necessarily inaccurate,
information.</div>
<div class="MsoListParagraph" style="margin-left: .75in; mso-add-space: auto; mso-list: l0 level3 lfo2; text-indent: -.25in;">
<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">ii)<span style="font: 7.0pt "Times New Roman";">
</span></span></span></b><b style="mso-bidi-font-weight: normal;">Private
Rights vs Public Interest</b></div>
<div class="MsoNormal" style="text-indent: .25in;">
China excels at providing public
services at the expense of private rights. For example, in the early 1990’s
China began development of the marshy farmland Pudong (on the side of the river
furthest from the photographer) into a sprawling metropolis:</div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://1.bp.blogspot.com/-ncSCvtKP_c8/UUy1Gue9lrI/AAAAAAAAACY/zZDk7RE35RY/s1600/Untitled.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="http://1.bp.blogspot.com/-ncSCvtKP_c8/UUy1Gue9lrI/AAAAAAAAACY/zZDk7RE35RY/s1600/Untitled.jpg" height="640" width="532" /></a></div>
<div class="MsoNormal" style="text-indent: .25in;">
<br /></div>
<div class="MsoNormal" style="text-indent: .25in;">
Three hundred thousand farmers were
displaced as a result. Many farmers received cash compensation for the land
they lost and now work in the factories of Pudong. To Americans this may not
seem fair, but in China the needs of the state always trump the property rights
of individuals.</div>
<div class="MsoNormal" style="text-indent: .25in;">
In contrast this would never
happen in India. Hundreds of thousands live in desperate poverty in India’s
slums. The rich want the slums bulldozed, however the poor have the rights
to the land and the state fears treading violating these rights. Democracy is upheld even if it results in underdevelopment. It
is up to private land development firms, such as Delhi’s DLF Group, to
transform farmland into cities.</div>
<div class="MsoNormal" style="text-indent: .25in;">
In China, development is the
result of fiat authority of the state. In India, it is the result of
entrepreneurship.</div>
<div class="MsoListParagraph" style="margin-left: .75in; mso-add-space: auto; mso-list: l0 level3 lfo2; text-indent: -.25in;">
<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">iii)<span style="font: 7.0pt "Times New Roman";">
</span></span></span></b><b style="mso-bidi-font-weight: normal;">Financial
Infrastructure</b></div>
<div class="MsoNormal" style="text-indent: .25in;">
A major difference has emerged in
the two countries’ banking landscapes. China has made no effort to separate
banks from CCP (China Communist Party) control. The result is banks that lend
money based on political rather than economic criteria. Funds were wasted in
unprofitable “state-owned enterprises” totaling $300 billion in bad loans, 40%
of all loans made in China.</div>
<div class="MsoNormal" style="text-indent: .25in;">
Unfortunately, the Chinese stock
market doesn’t run any better than their banks. On any given day the majority
of stock prices move together. In contrast, about half of the stocks on the
NYSE move in tandem. When stock prices move together to the degree they do on
the Chinese exchange, it means that the stock price of a company isn’t an
indicator of their performance. With no firm specific information available, no
market can exist because particular investors cannot determine if one company
is worth investing over another.</div>
<div class="MsoNormal" style="text-indent: .25in;">
In India, the state of banking is
better but still flawed. Despite many reforms enacted since a 1991 fiscal
crisis, the public does not trust banks to service their needs. This is due to
bankers’ reluctance to loan to anyone outside of the government. Seasoned
bankers have made careers out of government-approved loans set at
government-approved interest rates and are exceedingly cautious of loaning to
the private sector. Even worse, bankers’ salaries are fixed so they have no incentive
to loan beyond the minimum required to be active. This overinvestment in
government securities means less financing available for entrepreneurs.</div>
<div class="MsoNormal" style="text-indent: .25in;">
India’s stock exchange is a
different story. The Bombay Stock Exchange (BSE) is India’s original stock
market, with history going back to 1875. However, the BSE had a monopoly on
stock trading in India making it an inefficient, underperforming institution.
The BSE was another target of the 1991 reforms, but instead of imposing new
regulations on the BSE a competitor was formed called the National Stock
Exchange (NSE). The NSE was a well-run, transparent system for stock trading
that dominated the BSE. To remain competitive, the BSE had to clean up their
act or go out of business. Competition worked where reform and threats did not.</div>
<div class="MsoNormal" style="text-indent: .25in;">
<br /></div>
<div class="MsoListParagraph" style="margin-left: .75in; mso-add-space: auto; mso-list: l0 level3 lfo2; text-indent: -.25in;">
<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">iv)<span style="font: 7.0pt "Times New Roman";">
</span></span></span></b><b style="mso-bidi-font-weight: normal;">Soft
Power</b></div>
<div class="MsoNormal" style="text-indent: .25in;">
Much of China’s strength lies in
its hard power, or power to motivate/attract people based on economic forces. Soft
power is the ability to motivate/attract people based on cultural influences.
Soft power is where China is weak and India is strong.</div>
<div class="MsoNormal" style="text-indent: .25in;">
Consider India’s film industry,
Bollywood, which now produces more movies than Hollywood. Or Buddhism, which
was heavily adopted by the Chinese at the end of the strictly Confucian Han
dynasty. Or Yoga, which was introduced to the United States by Swami
Vivekananda and popularized by Deepak Chopra. Or Ravi Shankar, who taught
George Harrison Indian classical music and influenced some of the most well
loved popular music in history.</div>
<div class="MsoNormal" style="text-indent: .25in;">
In contrast, China has no cultural
ambassadors that have shaped the world like India’s have.</div>
<div class="MsoNormal" style="text-indent: .25in;">
<br /></div>
<div class="MsoListParagraph" style="mso-list: l1 level1 lfo1; text-indent: -.25in;">
<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">3.<span style="font: 7.0pt "Times New Roman";">
</span></span></span></b><b style="mso-bidi-font-weight: normal;">Khanna’s
Strengths</b></div>
<div class="MsoNormal" style="text-indent: .25in;">
What I loved about this book was
the thoroughness of it. Tarun Khanna is obviously an extremely intelligent
individual and passionate about the subjects of his book. Khanna writes with
the confidence of a true authority on these two emerging markets, as he leaves
no stone unturned in his goal to educate his readers about his subject.</div>
<div class="MsoNormal" style="text-indent: .25in;">
I believe many Americans have a
foggy idea of what is happening in China and India but are generally clueless
as to the details. Even worse, I have see true hatred I the form of xenophobia
from some people regarding China (but not India, most likely a result of
India’s supreme soft power). I believe that anyone afraid of China should make
an effort to understand its importance in the 21<sup>st</sup> century and
Khanna’s book is an excellent way to achieve this.</div>
<div class="MsoNormal" style="text-indent: .25in;">
Khanna makes fascinating contrasts
between the two countries that I will not soon forget. Because of this book I
now have a clear understanding of the cultural differences between China and
India that have substantial impacts on their economies and societies. The best
thing of all is that Khanna backs up <i style="mso-bidi-font-style: normal;">every</i>
point made with evidence that <i style="mso-bidi-font-style: normal;">he himself</i>
found venturing into the real world and meeting with powerful figures in both
countries. It must have taken him many years to acquire the first-hand the
level of understanding he has gained, as it shows in his writing.</div>
<div class="MsoNormal" style="text-indent: .25in;">
<br /></div>
<div class="MsoListParagraph" style="mso-list: l1 level1 lfo1; text-indent: -.25in;">
<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">4.<span style="font: 7.0pt "Times New Roman";">
</span></span></span></b><b style="mso-bidi-font-weight: normal;">Khanna’s
Weaknesses</b></div>
<div class="MsoNormal" style="text-indent: .25in;">
The one weakness that I found is that
this is one <i style="mso-bidi-font-style: normal;">thick</i> read. Unlike “The
World Is Flat,” which I can imagine almost anyone with a college education to
find readable without squinting too hard, “Billions of Entrepreneurs” asks much
of the reader. This is especially true if, like me, you go into it with an average
American’s understanding of India and China and much of the information here is
new to you.</div>
<div class="MsoNormal" style="text-indent: .25in;">
Also, due to Khanna’s intensely
detailed writing, the book can feel unfocused at times. There were a couple
chapters when I had to go back to the beginning to remind myself what the main
idea/point being made was due to becoming lost in the details. Also, I had
trouble finding a narrative, especially in Part II: Enterprise. Khanna goes
from discussing the rise of Infosys to Microsoft’s troubles in China to India
and China’s differing attitudes towards their diaspora. It reads very much like
a collection of scholarly journals instead of a book. Not that this is
necessarily a bad thing, as the stories and information here are gold, but
because of this I think that “Billions of Entrepreneurs” is a book best read
the second time when the reader knows what to expect in Khanna’s flow.<br />
Finally, the title of the book is misleading. While catchy, at no point did I believe that there are "billions of entrepreneurs" in China and India from the evidence provided here. In fact, in China private entrepreneurship is very hard to pull off in the face of overpowering government.</div>
<div class="MsoNormal" style="text-indent: .25in;">
<br /></div>
<div class="MsoListParagraph" style="mso-list: l1 level1 lfo1; text-indent: -.25in;">
<b style="mso-bidi-font-weight: normal;"><span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">5.<span style="font: 7.0pt "Times New Roman";">
</span></span></span></b><b style="mso-bidi-font-weight: normal;">Closing
Thoughts</b></div>
<div class="MsoNormal" style="text-indent: .25in;">
“Billions of Entrepreneurs” is an
excellent book in throwing the reader deep into the emerging markets of India
and China. Khanna goes into the utmost detail, providing numerous real-world
examples he himself observed to prove his main point: that China and India are
mirror images of each other, with one country’s strengths the others' weaknesses. This is not a “China” book or “India” book; It is both because
understanding one without the other is not seeing the whole picture.</div>
<div class="MsoNormal" style="text-indent: .25in;">
This is a thick book, demanding
more than just one read-through. But the readers efforts will be rewarded as
the knowledge contained here cannot be underestimated for those about to visit
China or India, international business professionals, politicians, and
thinkers.</div>
<div class="MsoNormal" style="text-indent: .25in;">
“Billions of Entrepreneurs” is a
tremendous achievement because after reading it I feel much more informed on
the book’s subject and able to have an intelligent conversation about China and
India when the topic comes up. Really, what better praise is there?</div>
<div class="MsoNormal" style="text-indent: .25in;">
<br />
<span style="mso-tab-count: 1;"> </span></div>
Stephenhttp://www.blogger.com/profile/08848760923308214184noreply@blogger.com0tag:blogger.com,1999:blog-1781565418135909229.post-72377357167175789672012-12-07T00:07:00.001-08:002012-12-07T11:52:41.116-08:00The World Is Flat Book Review<style>
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<br />
<div class="MsoNormal">
Overview:</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In his book “The World Is Flat: A Brief History of the
Twenty-First Century,” Thomas Friedman writes about the events that triggered
“Globalization 3.0,” and its effects on the individual, national and
international levels. Friedman calls these effects a “flattening” of the world
because as the 21<sup>st</sup> century progresses, little people have the power
to act big and big people are able to connect on the smallest level, thus
bringing us closer to operating on a flat plane. Globalization 3.0 has leveled
cultural walls and shattered national barriers as business, government,
individuals, and even terrorists have the ability to share and connect like
never before.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Friedman begins by explaining how it happened in his “Ten
Forces That Flattened The World,” which are:</div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">1)<span style="font: 7.0pt "Times New Roman";">
</span></span></span>Collapse of the Berlin Wall on 11/9/1989
(Friedman later contrasts this event to 9/11, calling 11/9 “creative
imagination” and 9/11 “destructive imagination.”)</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">2)<span style="font: 7.0pt "Times New Roman";">
</span></span></span>Netscape brings the internet browser to the
installed base of millions of PCs</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">3)<span style="font: 7.0pt "Times New Roman";">
</span></span></span>Work flow software allows computers to
communicate without people</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">4)<span style="font: 7.0pt "Times New Roman";">
</span></span></span>Open-source projects and the self-organizing
collaborative communities that make them possible. Examples include Wikipedia
and Linux.</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">5)<span style="font: 7.0pt "Times New Roman";">
</span></span></span>Outsourcing has allowed companies to split
manufacturing and services into stages, and hire outside parties to complete
certain stages in a more cost-efficient way</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">6)<span style="font: 7.0pt "Times New Roman";">
</span></span></span>Offshoring differs from outsourcing in that
Offshoring allows a company to take a factory that used to be in the USA, and
move it to China or India where the exact same tasks can be done cheaper.
Offshored tasks are still internal to the company.</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">7)<span style="font: 7.0pt "Times New Roman";">
</span></span></span>Supply-chaining. Friedman uses Wal-Mart as an
example of how business uses technology to manage the supply chain for maximum
efficiency.</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">8)<span style="font: 7.0pt "Times New Roman";">
</span></span></span>Insourcing. Friedman uses UPS as an example of a
company that creates value for other companies who cannot afford a complex
supply chain management system.</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">9)<span style="font: 7.0pt "Times New Roman";">
</span></span></span>In-forming, or the ability to find information.</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -.25in;">
<span style="mso-bidi-font-family: Cambria; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Cambria; mso-fareast-theme-font: minor-latin;"><span style="mso-list: Ignore;">10)<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="mso-spacerun: yes;"></span>“The
Steriods,” or the cell phones, tablets and laptops. All of the wireless,
portable, ubiquitous and relatively affordable ways we connect.</div>
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Friedman then writes how these flatteners have and will
change world culture, business, economics and politics. For example, on page
183 Friedman writes, “We tend to think of global trade and economics as
something driven by the IMF, the G-8, the World Bank, the WTO, and the trade
treaties forged by trade ministers. I don’t want to suggest that these
governmental agencies are irrelevant. They are not. But they are going to
become less important. In the future globalization is going to be increasingly
driven by the <i style="mso-bidi-font-style: normal;">individuals</i> who
understand the flat world, adapt themselves quickly to its processes and
technologies, and start to march forward – without any treaties or advice from
the IMF. They will be from every color of the rainbow and from every corner of
the world.”</div>
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<br />
Relevance and Analysis:</div>
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All who read this book should be alarmed if its contents is
news to them, for those who cannot keep up with the flattening of the world
will be left behind. This is true on the individual or national level. Before
Globalization 3.0, a B student from an American college was more highly valued
than a genius from India or China. Now employers will hire that latter. As the
world flattens talent becomes more valued than geography and the entire world
must compete with each other.</div>
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Some fear this shift and want to build barriers such as
banning outsourcing. The argument is that outsourcing harms America by giving
away American jobs to foreigners. However, by running as efficient as possible,
businesses can produce products and services at a lower cost and pass along
these saving to the consumer as competition forces prices down. If we don’t
utilize the global labor market to remain competitive, other countries will,
allowing them to produce superior products at better prices. These products
could steal enough market share to put American companies out of business, thus
leaving even more Americans out of a job!</div>
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We must not bury our heads in the sand regarding what is
happening around the globe. As more and more countries become highly educated
and economically developed, America won’t be so special anymore.<span style="mso-spacerun: yes;"> </span>If America remains ignorant by resisting
forces that it cannot control we risk losing our status as the world superpower
to smarter, hungrier nations. The fear of being surpassed will stimulate
positive change, such as a higher skilled labor force.</div>
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Friedman makes another very interesting point regarding the
benefits of outsourcing, free trade and modern supply chains in Chapter 12,
which begins with the quote, “Free Trade is God’s diplomacy. There is no other
certain way of uniting people under the bonds of peace.” If two countries are
invested in a business together, they are less likely to go to war because war
becomes more costly. Now imagine a world where <i style="mso-bidi-font-style: normal;">every</i> superpower is interconnected through business. The cost of
war would be a <i style="mso-bidi-font-style: normal;">global</i> economic
meltdown! This is both good and bad thing. It is good because no superpower
would willingly go to war with costs that high. Outsourcing, free trade, and
global business would effectually create world peace. The down side is that
while the great leaders of nations would not willingly go to war, war can still
be brought about by the actions of terrorist organizations. Friedman believes
that we cannot separate the good from the bad; Globalization 3.0 unites
business, politics, art and culture as well as terrorists.</div>
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In Chapter 11, ‘The Unflat World,’ Friedman addresses
criticisms of his theory. He admits to being a technological determinist (<span style="mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">a
reductionist theory that presumes that a society's technology drives the
development of its social structure and cultural values) </span>and not a
historical determinist. A critique can be quoted on page 373: “To listen to
you, Friedman, there are these ten flatteners, they are converging and
flattening the earth, and there is nothing that people can do but bow to them
and join the parade. And after a transition, everyone will get richer and
smarter and it will all be fine. But you’re wrong, because the history of the
world suggests that ideological alternatives, and power alternatives, have
always arisen to any system, and globalization will be no different.”</div>
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There is no guarantee that everyone will use these new
technologies for the benefit of themselves or their countries. Technology is
only a tool; it does not make us smart, moral, wise, fair, or decent. We can
only hope that technology will be used for creation and growth, but that does
not have to happen. The world is not yet flat and we do not know how it will
look when it is.</div>
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In ‘The Unflat World’ Friedman lists three constituencies
impeding the flattening process: the sick, the disempowered and the frustrated.
The sick are the millions of people in India, Africa, China, and Latin America
who are not taking off like the middle and high classes. These are the people
who are afflicted by HIV, malaria, TB, polio, alcoholism, crime and broken
governments. They do not have clean water or electricity. They have much bigger
concerns than how Globalization affects them. The disempowered live in between
the unflat and flat world. These are the Chinese and Indian peasants and
farmers who see the effects of the flattened world, but lack the tools, skills
or infrastructure to participate in any meaningful way. The frustrated are the
groups who resist Globalization, sometimes to an extreme level such as al-Qaeda
suicide bombers.</div>
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Assuming that the world does become ever-flatter and the
sick, disempowered and frustrated end up joining the flat world, a problem that
is already at crisis point will be pushed further into the red zone: pollution.
Friedman lists the alarming statistic that in April 2004, over 1,300 cars were
added to the streets of Beijing <i style="mso-bidi-font-style: normal;">daily</i>.
Smog has become so bad that Beijing keeps track of “blue sky days.” The use of
clean energy will be necessary in the flat world; its growth must coincide with
world flattening or we will choke ourselves in clouds of pollution.</div>
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Personal Takeaways:</div>
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This is a truly comprehensive
guide to the newest phase of Globalization. Friedman covers the past, present
and future of the flat world and makes sure to admit that the world is flatt<i style="mso-bidi-font-style: normal;">er</i>, not entirely flat. <span style="mso-bidi-font-family: Helvetica;">With the individual having the power to
offer goods and services globally borders no longer restrict the marketplace.
Soft powers such as culture and language are bigger barriers than geography in
today’s world. Perhaps Globalization 4.0 will see a unification of diverse of
culture and language. Until world peace is achieved and borders between nations
dissolve I would not say the world is completely flat, and I do not see that
happening until more “soft” barriers are broken.</span></div>
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<span style="mso-bidi-font-family: Helvetica;">For soon-to-graduate students like myself the book is a scary read. Employers
can recruit from anywhere in the world, not just locally anymore. And with the
amount of high quality entertainment readily available at extremely low cost,
it is becoming increasingly difficult for American students to leave childish
pursuits behind and reach adulthood. A portion of America’s youth is amusing
themselves to death (as Neil Postman would say). I believe countries where
Xbox, Television, Netflix are not so readily available and do not adopt an
advertisement-saturated consumption culture may produce a higher quality
workforce than America. The geniuses will do fine but the B-students will find
it increasingly difficult to find satisfying employment. And as American
students continue to amuse themselves to death, we will produce more B-students
and fewer geniuses.</span></div>
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<span style="mso-bidi-font-family: Helvetica;">One “issue” I have with the book is that it is a little dated. I
would love to read a new edition, or “The World Is Flat Part 2.” One flattener
that I feel has become more relevant that Friedman only briefly touched on is
online education. Online education began with a social stigma but as time
passes it is becoming more serious. For example, MIT and Harvard provide free online
courses with its website edX. And not just college/professional courses, but
something as simple as watching a recorded speeches/lectures online and
tutorial videos on Youtube can provide valuable online educational resources.</span></div>
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<span style="mso-bidi-font-family: Helvetica;">In conclusion I would recommend this book to anyone who wants a
better understanding of just how different 21<sup>st</sup> century business and
culture is compared to last century. Our world is changing exponentially and if
we do not understand this we run the risk of being left behind.</span></div>
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Stephenhttp://www.blogger.com/profile/08848760923308214184noreply@blogger.com0