India & China will fight it over to become the next America

“He was the first to predict the massive downsizing of organisations and the increasing emergence of self-employed professionals. In fact, back in 1981, when Charles Handy said that the huge corporations that were the pillars of employee life in the twentieth century would be superseded by small independent operators, people chose to not listen. But prediction after prediction turned out to be prophetic, and the world tunes in to Handy now. So listen to him as he predicts a new world order: Fifty years from now, I see India and China fighting over which will be the next America, he told Corporate Dossier in an exclusive interview.”

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I hope, I will be alive fifty years from now to see all this happen :-)

Anyways, for some time now, I have been interested in our economy. Readers might have noticed a dramatic increase in business related articles posted here and over at netlife.

For as long as I can remember I have been interested in business, probably sparked off by an amazing rags to riches story I read in my high school about Dhirubhai Ambani. Lately it has assumed obsessive proportions wherein I have been reading everything I can about our economy and even ended up updating the wikipedia page on the Indian Economy. The fact that media is ripe with positive stories about our economy helped quite a bit in this regard.

I can see that I am not only one interested in business these days. The fact that youth of the country seems to prefer anil ambani over sachin and shah rukh as the MTV youth icon of the year, says a lot about the aspirations of the current generation.

Now if you have been following up on the economy, you would know that comparisons between India and China are the favourite pastime for economists world over right now. People just cant get enough of them and they all end up giving different predictions.

It is indeed quite difficult to predict the winner. The explosive inorganic growth achieved by china via the FDI route suggests it might be the winner. But then almost all of china's manufacturing units are owned and operated by outsiders, making many say that china is nothing but america's economic colony. The fact that almost all the leading economies of the world are moving away from an industrialized to a service dominated economy is not helping china either.

That is where India comes in. India already is a service dominated economy ( 50% of GDP as per last year's figures and growing rapidly). Further, we are much more of a domestic oriented economy with exports as percentage of GDP being quite small. This essentially ensures that our economy is virtually shock proof from external factors unlike other leading asian economies like singapore & thailand wherein exports form a significant portion of the GDP.

Indians have traditionally done well when given the right platform which is seen by the fact that the Indian population in US has a per capita income higher than the national average of US !

Finally, after decades of inertia, the conditions are becoming favourable for Indians at home. This when combined with the fact that a significant amount of our population is young as against the rapdily aging population of Japan, Germany and US gives us a great advantage over them.

How well we make use of all these remains to be seen.

But for now, the readers of this site will have to bear with me as I continue posting all the business related articles that I find interesting.