And the winner is…

India. And, oh yes, also: a certain type of big company.

In 11 years’ time, India will have finally emerged into the sun-dappled uplands of the industrialized world.  Yes, it will still be beset by poverty, but the country’s by-then enormous middle class will be thriving, its economy will be attracting investment, and its overall level of education will be very high.

Why not China? I hear you thinking.  Certainly the three points above apply equally to China, right?

Yes, except India embraces two things that China does not: parliamentary democracy and the English language.  Both will give India an edge on the world stage.

English means that Indians will be plugged in to the world in a way China will not.   Of course, this can change.  The Chinese can learn English, and do.  But India, today, already has more honor students than the USA has students – and they all speak English.  China, not yet.

English also means that India is part of the Anglosphere, a segment of the world with many shared values and traditions, not least of which is the other thing India has that China doesn’t, a democratic government.


The worst form of government… but for all the others

Democracy is messy, and some people might say (Thomas Friedman, this means you) that centralized decision-making – a.k.a. an authoritarian state – is better for running a country, allocating resources, getting things done.  But while it may occasionally be confused and even chaotic, democracy (and I include in this term shared decision-making in e.g. organizations and corporations as well) is the best system for encouraging debate, hearing opposing points of view, and ultimately making better decisions.

But China’s so successful!  Does it make any difference that it’s not a democracy?  Perhaps Chinese pragmatism, drive and raw economic power are all that matters.  As Deng Xiao-Ping famously said, “It’s not important if a cat is black or white, as long as it catches mice.”  In other words: Communist?  Capitalist?  Who cares, as long as we’re advancing.

This may be true for now, but in the longer run, I believe the fact that China is a communist country ruled – with an iron grip – by a single party means that cronyism, corruption and the lack of the rule of law will eventually take a big toll on its economic prowess, particularly if it would ever emerge that the country, and many of its successful companies, have been manipulating all the statistics that make the country’s economic success seem so unstoppable – i.e. cooking the books.  Investor confidence would just fade away.

And moreover, when China’s “bare branches” syndrome really begins to have an impact on Chinese society, as I wrote about here, the results could be calamitous.

(It is true that India also has a somewhat skewed M:F population ratio.  The preference for boys over girls is widespread throughout Asia, not just in China.  But the problem in India is nowhere near as dire as in China.)

So India will, I believe, prove to have the educated population base, economic strength, rule of law and international integration that will allow the country to pull itself out of its perennially impoverished state.

But perhaps ironically, it will be the burgeoning Chinese economy that will determine which countries will be the big winners 11 years from now.  Why?  Because countries that are able to supply China’s ravenous hunger for the commodities it needs for its infrastructure requirements, and the food and water its population needs, will have a ready market for their output.

This is why I would declare the runner-up in the next 11 years will be: Canada.


Corporate winners

What kind of companies will be the big winners 11 years from now?  It’s not my intention here to try to predict the industries such winners will be in – there will be winners in every part of the economy.  But given how the world will be evolving in this time frame, what qualities will companies need to have if they want to be winners?

One of the clearest developments over the next 11 years is the emergence of the “next billion,” a new middle class of around a billion new consumers worldwide.  In terms of their needs and preferences, these new consumers will take their place alongside middle-class consumers in the already industrialized countries.

But looking at them in the aggregate, two differences come to mind: first, they are not concentrated geographically but are spread all over the world, from China and India to Africa and Latin America.  Second, they are joining the ranks of middle-class consumers at a time when the world is, from a communication point of view, thoroughly wired, so everyone can join the global conversation immediately.

This means that the big winners will be companies with the following:

  • The ability to scale their manufacturing (1 billion is a lot of potential customers, so you want to be able to ramp up production if your marketing does a good job);
  • International presence and reach, to be “right next to your customers,” all around the world;
  • Already established brand equity – even better if you have “aspirational” brands that appeal to a new member of the middle class striving to attain status;
  • The speed and agility to chop & change their organizational structures, e.g. moving parts of their operations into these countries to lower costs.

So it sounds like the future belongs to the huge multinationals (or trans-nationals, or whatever they’re called these days).  Global brand strength strikes me as the key success factor – imagine a billion consumers who are clamoring, for the first time, to buy products that will reinforce their new-found middle-class status.

And speaking of “chopping & changing,” one of the things we will see in the next 11 years is more ad hoc team-based management.  Like today, senior management will form task force-type teams to explore business issues and resolve problems.  But unlike today, these teams will be comprised more and more of members based in widely far-flung places – different backgrounds and perspectives.  Using IT tools, these teams will “meet” regularly – though hardly ever in person.  The key to success 11 years from now will be to learn to work effectively in these ever-changing teams… and to be prepared to wake up at 3 a.m. to Skype your colleagues on the other side of the world.


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