C. K. Prahalad earned the third spot on Suntop Media's 2005 "Thinkers 50" list, just behind Michael Porter, and Bill Gates. He has recently spoken about the Indian miracle in a variety of contexts.More than others, CKP knows what he is talking about in the context of India - partly because he was born there- he also sits on the board of Hindustan Lever Limited, top amongst India's corporate icons.
As CKP sees it, in the last ten years, India has done three things very well.
- It has built some global capabilities, first locally and then leveraging it globally. That is where you find the IT industry, the pharmaceutical industry, the automobile components industry, the diamond cutting industry, and so on.
- Second, it has created an extremely high level of aspiration for both the poor and the rich. The rich and the educated can aspire to be world class, and the poor can aspire to have an education for their children to allow them to escape poverty.
- And the third thing is that the government fundamentally accepts, even though it's very hard to implement, that India has to become an integral part of global trade.
He adss, those three are going to put India on the right trajectory. He has some added insights as to why he views indian success as not owing out of mere cost arbitarge : India has built extremely high levels of quality. TQM is an integral part of software development. There are new methodologies and tools, and innovation in work processes and in the tools themselves. This adds up to four or five layers of advantage, including speed, worldwide project management, common platforms around the world, and expatriate management. To continue to believe that cost is the only building block misses the point(Thats why I laugh when people say Africa can give services at $5 and the indian run would be over - ignorance at its best). He goes on to believe that India will invent a different kind of manufacturing - very high quality, design-centred and software embedded.It is more you design, you develop, you manufacture, you ship. It is still in its infancy, but I expect it to grow as rapidly as the software side. He is expecting that Indian companies would be sharpening their competitive skills, demonstrating world class quality, becoming very profitable, building market cap, and using it as currency to make acquisitions, and expand rapidly overseas and predicts 20 to 25 companies in the next two to three years spreading their wings and getting out of India. He says that China and India will be the second and the third largest economies next to the United States certainly by 2015. Also he brings forth the point that India is the place where cutting-edge problems as well as opportunities lie.Given the large number of small firms operating on a global scale, Indian experience can challenge some assumptions about the prerequisites for globalization. Good thoughts- definitely to be noted by all interested.