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The second world war started in 1939 and continued to rage well until 1945 leaving major of economies of world in ashes right from Britain to Japan to USA to Germany. With huge mounting debt, wrecked cities and bombed infrastructure and over 60 million people (about twice the population of Texas) dead, recovery of economies was a daunting task. The ripples of relentless artillery attacks and forced manpower to aid the war were deeply felt in India and rest of the Asia pacific as well.
Post war world thinkers and economists were quick to draw conclusion that an industrial society will not be sustainable without mass consumption and for that masses need high stable incomes which in turn is not possible without stable full employment. Of Couse interventions would be needed for economic stability to ensure that those fragile economies don’t collapse.
Like most capitalistic democracies, American revolution in the workforce is highlighted by capitalism and industrialization. The post great depression economy of USA had moved from being agriculture centric by 1930s to industrial production heavy. This new economic power brought much needed economic boom and the stock market of the country flourished once again. The country’s government allowed businesses to realize profits but also used their power to create new markets and set up new businesses, plants and equipment for lease.
In Asia, South Korea is another flourishing economy. The Korean wars and imperial Japanese invasion left both Koreas crippled with debt, dead youth and ruins in the name of cities. Like India, South Korea was an agriculture driven economy in 1960s, Post war South Korea neither had political stability nor resources for economic growth and was heavily reliant on US aid to keep afloat. Yet after years of turmoil and some help from foreign aid, in 1960s the country showed its first signs of booming highlighted by emergence of entrepreneurs who later become chaebols, the Korean word for huge business conglomerates and became the driving force of Korean industrialization. Not only economically, but the country also grew socially by tearing down all previous social class and barriers resulting in a fluid society open for change in the form of land reforms (to reduce inequality) to providing aid to small entrepreneur and growing local conglomerates by banning foreign goods and imposing duties on them. As always, the strong foundation of a strong economy and Korea understood it well with masses eagerness to get education and persistent effort from the government to ensure that their emerging economy is driven by well educated people.
Singapore is another flourishing example of how economies can boom with great leadership and calculated risk. While India was always a risk aversion economy, Singapore was more experimental. Indian government’s aversion to privatization and international trade and Singapore’s friendly view of them in a way become a defining factor for unprecedent prosperity. While the world grew, India continued to look down on capitalist societies like USA, Singapore, Japan and Korea. These economies boomed by almost 10% every year back in the day while India continued to slug at lowly 3.5% of growth and continued to be developed nation even after 77 years of independence.
In all these stories of rising from ashes, we will find some common denominators that helped these countries become global superpowers.
Capitalism is the way. Industry and government need to work closely for our country to flourish. Of course, laws need to be in place to close loopholes for corruption and accountability from conglomerates in terms of quality of products, creating quality jobs and expansion to international markets. Socialism in the long run has rather harmed us than doing good.
Robust research and innovation: India has suffered huge setback by not investing heavily in innovation and bringing new technology on the table in decades. Huge home grown MNC and Conglomerates continue to be heavily reliant on foreign markets for process, product and technology innovations. The last biggest innovation that transformed Indian Society for better is UPI. Economies like Japan, Korea and USA continue to generate huge revenues thanks to their continuous innovation in process improvement, new product development and technological advancement. India’s best forte right now is cost efficiency, and it relies heavily on it. We need to more aggressively push for innovation and research to become world leaders. A reliable, tested cost-effective new technology will bring in more investors and pump more money into our economy. India MNC and conglomerate often rely heavily on international technologies and implement them in India. We need to realize that development, design and implementation is the full recipe of being a self-sufficient economy or else we will continue to rely on the west for another century and our masses will continue to do back-office low paying transactional work.
Investment in education, especially STEM, can help in building a skilled workforce driven to bring in change and innovation. Highly educated population equals educated workforce which equals more entrepreneurship. A meritocratic society will push the population to achieve excellence. India’s medical tourism is a rapidly expanding market, and we can really maximize on it by increasing investment in STEM field. By developing more cutting-edge technology, training doctors in high precision niche surgeries, not only our ever-growing population will benefit but also bring in more revenue for medical institutions and prestige to Indian medical prowess. Investing heavily in research and development and preventing talent drain to other developed economies. Our country should provide be able to provide lucrative opportunities for talented Indians to leverage domestic private economy in terms of quality of life, working conditions, pay and opportunities to provide inputs in policy formulation.
Upgradation and standardization of technical and vocational training: Indian vocational training lack standardization and quality checks. Often the programs are substandard and lack quality content leading to people either getting low wage jobs or nothing at all. Instead of pushing people more towards unorganized sectors, vocational training programs should be driven towards technical innovation, entrepreneurship and technical skilling. Quality of job should be the number one priority of our education and training institutes instead of just jobs. Lack of skill census to understand skill gap and upskilling efforts are required is missing.
Incentivizing entrepreneurship and technological innovation can boost our technological advancement and competitiveness on a global scale. Our country needs to invest in bringing back our best minds and provide them with incentives and state of art equipment/aid to carry their research and development work in India.
Push for export of goods and commodities to foreign markets and higher foreign interest rates. A robust manufacturing sector can not only provide employment to millions but also aid in economic growth. Of course to compete with other players, India should have stringent quality check programs to ensure that the manufacturing quality remains world class. Cost efficiency and quality should go hand in hand for our economy to become leaders in manufacturing. More investment will certainly be required to upgrade machinery and upskill the labor as well. Automation should not mean the elimination of the workforce.
Blocking foreign competition to enter in emerging markets domestically thereby allowing domestic companies to grow and become powerful brand and also provide employment to the country’s population. Encouraging entering of FDI in tools and technology that can directly improve industries in India. Keeping the import rate high thus discouraging consumption of foreign goods.
Robust infrastructure, quality education system and universal optimum health coverage along with standardized public housing and world class facilities accessible to all citizens will create feeling of loyalty and pride among the Indian youth and less brain drain.
India has already missed the industrialization era and need to pull up its sock if it really wants to become a true developed country. Our GDP growth is largely reflective of regularization of payments in industry than before than skill development, increased wages of people in comparison to inflation and research and development.
Global Economy
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