Friday, December 25, 2009

The great turning point!

Turns out 2009 was a great turning point. A culmination of several mega trends worldwide, this year saw a decisive shifting on many fronts. As news of various events, big and small, made their way to eager ears, the sensitive ones could pick rumblings of bigger trends to follow. Decisive trends.
Let me summarise my learnings from the year that’s folding up, and my understanding of what the next year, and decade hold in store for us.

1) Unipolarity is dead. Long live G-2
The singular superpower of this world – the US – finally acknowledged that it is no longer capable of running the world single-handedly. This capitulation was prompted by its economic collapse and consequent shaming (in front of the whole world), and its loss of confidence on its ability to innovate enough to pull itself (and the world) out of a recession, which threatened to turn into a depression. The US openly touted the idea of a G-2 that suddenly (and maybe unhappily for China) uplifted China from a “developing” to a “superpower” status! The mandarins in Beijing must have been shocked to see such a rapid surrender of this singular status by the US, irrespective of a conciliatory President in the Oval office. Anyway, they accepted it gladly, and are now discovering that there is a big price one needs to pay for superpower status – humility, decency and willingness to help those in need. These aren’t exactly traits Beijing is reputed for. So expect lots of incongruous and asymmetric statements and actions in the coming year, as the new world order settles and finds an equilibrium. I do not expect it to be smooth, neither do I expect it to be hassle-free. It’s not guaranteed either!

2) Business on the back-foot

The amazing liberty taken by the investment bankers in finest of US firms led to the sub-prime collapse. That in turn led to a wholesale bashing of the ideology of capitalism itself. Although that is a bit too much, but a world where 1 billion go to bed hungry each day, it was only expected. All the more, as the spillover from Wall Street to Main Street this time was much quicker, and more deleterious. So we are truly globalised now! What happens in the US banks affects us locally, almost everywhere in the world. Due to this sudden (12 months is surely sudden!) credibility crisis for capitalism’s founding principles, there is an environment of chaos and disbelief all around. Businesses and Business-leaders are stunned. Unable to believe that they could be so easily within the reach of something so pernicious, they are now slowly struggling to get their act together. Helped in a great measure by the relentless and unimaginable size bailouts offered by various governments, business has managed to save the fa├žade from completely crumbling. A smiling face has been retained, while the back office got taken over by the governments. None of them (business and government) is eager to let it continue this way, and it is a matter of time before most bailouts result in either total collapse of the organization, or repayment of the bailout funds. The second is more likely. So we learnt some really good lessons here – a) you swing the needle too much towards the liberty side of the scale, and you degenerate capitalism into debauchery, b) governments are no longer willing to sit and watch industries die, even if that means pumping in unheard of amounts of monies into corporations, and c) business has to now work all over from scratch to regain its glory days.
I distinctly remember that through the early years of 2000s, companies like Lehman, GE and AIG used to be taught in B-schools are paragons of virtue and positive aggression. Their leaders seem to have forgotten that there is a limit to risk-taking, and healthy business demands reining in the testosterone at the right moment. Tut tut.
The coming decade will be a struggle for business to gain its social legitimacy all over again. I am confident that they will do it ultimately. While most companies anyway remain low-profile and generally good for society, the really big ones will have to go out of the way (can’t remain low profile that way!) and ensure that the broken edifices are rebuilt beautifully, ethically and convincingly.

3) It’s my life no more!
An amazing (and almost oxymoron like) social situation is evolving. The explosion of social media (blogs, twitter, orkut, facebook..) has created unlimited scope for micro-cultures to flourish. And at the same time, consumerist consumption driven by the large-scale (almost global) creation of such micro-cultures is driving climate change that is unacceptable to all. So you have a peculiar situation – Capitalism gave us the fantastic change to live life kingsize by enjoying almost every material thing we could imagine, and in the process, we ended up creating so much carbon (and greenhouse gases) that the world’s future is at stake. I heard someone say “It’s my life.” Good, but no more sir! Your actions (of consumption) are leaving carbon footprints on the environment, and hence it is totally unacceptable to everyone. But where does one begin to cut things down? Where does one rationally understand and take action? Where do nations come together and decide and act? All these are the grand questions that mankind is left to find answers to. If not solved properly, this century may well prove to be the last happy century for man as we have known him. It’s the tipping point, truly. And all of us, in our lifetimes, will see a large part of this story unfold before us.
So suddenly, post COP15, there is a worldwide sense of discomfort and disbelief that nations are unable to actually agree to specific goals that can be made to work. In our hearts, we surely believe things will work out (should work out), but the real decisions are still to be made. It is actually boiling down to the lifestyle issue, finally.

4) India undecided
Amidst all this noise and clutter and uncertainty, India seems to stand tall. Call it wisdom or lethargy, our policymakers never allowed India to fully integrate into the world economy. The benefit of that is there for everyone to see. We escaped narrowly! Our banks had minimal exposure to the lusty and lascivious sub-prime market of the US, and hence the ripple effect never hit us hard. Our recession mood (if you can call it) was largely due to secondary reasons – IT companies losing out on big new contracts due to shrinking budgets, big hikes in food prices locally, poor recruitment scene at leading campuses, government’s failure to create large-scale assets through big projects – and so on. Grudgingly, even China understands the important role that the juggernaut called India – 17% of world’s population – has to play in the global economy now. India, however seems unsure of its standing. Though we are assertive enough (we did not sign the NPT) and decent enough (we did not attack Pakistan post 26/11), our exact position needs to be recalibrated now. The world needs more precise definitions.
Remember, China is dead scared of India. President Hu Jintao applies his lathi everytime someone dares question his or the Party’s judgement. Indian leaders wield no such lathi. They are under the democracy scanner always. Despite this apparent lack of strength, Indian democracy goes from strength to strength. This makes India inherently much stronger than the monolithic but brittle Chinese polity. In the next decade, expect something dramatic to happen along those lines in China. History bears witness to the fact that when the democracy tide turns, no force is able to hold its pressure.

I find these times amazing! Since we are an integrated world now (at least online), the ripples travel really fast. I hope that mankind’s cumulative wisdom is able to hold itself really well, and that by 2100 AD, we would be on the route to eternal prosperity having contained the Capitalistic libido at reasonable levels, stabilized the population (at 9 billion) and with a sure agreement that space exploration and colonizing other worlds is our ultimate destiny. (What a thing to say in the middle of a world recession!)

I wish you the best for a great 2010 ahead. Success is a state of mind. If you have something valuable to offer the world, trust your instincts and go ahead. The world will reciprocate. Best of luck!


anil said...

It was a very happy reading on this auspicious day of Chrismas and I deeply feel that only the principles laid by Jesus can form the foundation in solving the present day issues. Kudos to you on such a comprehensive article.

Akshay Kothari said...

Respected Sir,

Thanks for such a great revision of the happenings in 2009.My learnings from last year-:

-Nothing remains new for long,change is life.
-If something like lehman brothers can collapse no one is Giant.
-Money alone cannot put all the efforts to boost up the Industries,Innovation is backbone now.
-Any specific sector,company or personality now cannot take the whole credit for something good now its all the combined efforts from all the elements which defines growth.
-Growth of a common man is all above the growth of any specific economy or organization.
-Its tough to have fight with inflation and make money grow at a constant rate without degrading its value.

last but not the least- "CASH IS KING"

Thanks once again for such a great post at such a right time.

Akshay kothari

Sandeep Manudhane said...

Anil, Akshay - thanks for reading and commenting!

prabuddha said...

beautifull research sirji