Hindu Vivek Kendra
A RESOURCE CENTER FOR THE PROMOTION OF HINDUTVA
   
 
 
«« Back
Underestimating India

Underestimating India

Author:
Publication: The Business Standard
Date: May 1, 2003

One of the central messages of the management guru, C.K Prahalad, to the Confederation of Indian Industry (CII) this week, as on previous occasions, is that India Inc's biggest problem is that it has consistently been underestimating its own potential.

Dr Prahalad's way of pressing his point home is to present a series of examples in order to show just how competitive India can be. For those who say India simply cannot develop new products since it does not have the technological skills, he cites the examples of Telco's Indica and Mahindra & Mahindra's Scorpio - both are new products developed autonomously, at a fraction of the cost of buying finished technology overseas, and in a sense these have catapulted India into the league of countries where advanced engineering can be done at low cost.

Indeed, the prospectus for the public share offer by Maruti Udyog talks of how Suzuki plans to use Maruti as one of the only R&D centres that it has outside of Japan.

For those who say India cannot compete with China's low costs since it doesn't have a large enough domestic market, Prof. Prahalad cites the example of Aravind Netralayam (he calls it Aravind Eye Hospital) where the cost of a lens implant is just $16; this compares with more than $1,000 in US hospitals, and since Aravind did 250,000 such operations last year, Dr Prahalad contends that if US prices are applied to it, Aravind is a $250 million corporation.

Similarly the Jaipur Foot, which fits prostheses for as little as $30 (against $10,000 in the US), could be considered to be a $160 billion firm, based on its scale of operations and on US costs. Both have unique delivery systems, partly based on a McDonald's style assembly-line operations model.

The basic points being made are two. One, it is possible to develop a different model and become competitive. Second, if you cut your costs, the volumes that can be got are tremendous (the Jaipur Foot fitted 16,000 artificial feet last year, as against just 4,000 by the next-best firm abroad).

Dr Prahalad extends this to cite other unique Indian discoveries, so to speak. He talks of how the model of providing software solutions over long-distance telephone wires is a unique Indian proposition. Of e-choupals and kiosks to download government forms.

Since the same set of problems, such as those relating to stifling government regulations and high-cost infrastructure, apply to these success stories as well, the central message that comes through is one of hope. If one firm can do it, surely others can too.

Cynics will argue, and perhaps correctly, that while one or two firms can always succeed by thinking differently, for India to do well as a nation, government procedures just have to be made simpler and the infrastructure better - after all, one of the reasons for software doing so well is that there were no government regulations for the sector.

This is of course true, and there is no arguing with the proposition that more economic reforms will benefit the nation - like motherhood, it cannot but be good.

The point, however, is that there is a lot that can be achieved even within this constraint. Dr Prahalad argues that Indians don't celebrate their small victories enough, certainly not publicly, and that's why good ideas don't spread and/or inspire others.

That's true too; too many Indians spend more time on the bad news than on the good.
 


Back                          Top

«« Back
 
 
 
  Search Articles
 
  Special Annoucements