India at 75 A vision, by C K Prahalad

The bottom of the pyramid — 800 million poor Indians —can become a major source of innovations, if empowered with the tool of education

CK Prahalad is the Paul and Ruth McCracken University professor at the Ross School of Business, University of Michigan. A world-renowned professor of corporate strategy, Prahalad has authored several world-class books like The New Age of Innovation : Driving Cocreated Value Through Global Networks (2008), The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profit (2004), Competing for the Future (1994), Multinational Mission: Balancing Local Demands and Global Vision (1987); Prahalad has consulted with the top management of many of the world’s leading companies. He also serves on the board of directors of NCR Corporation, Teradata Corporation, Hindustan Unilever Ltd, etc. Prahalad was in New Delhi for an interaction with luminaries and the media on what the country can become by say 2022, that’s 75 years post independence. Here are snippets of an interaction:

India@75 : We have just completed 60 years of independence. But now we have to change focus to the next 15 years and what India can become 15 years hence. I believe that India can and should actively shape the emerging world order and this demands that we acquire enough economic strength, technological vitality, and moral leadership.

Potential of India@75 : The country has to turn its huge population base of 200 million college graduates to its advantage. I would like to see 500 million skilled technicians, and I think this is possible in the next 15 years. We need to create a capacity for becoming the education laboratory of the world. We also need to focus on our arts, science, literature, and heritage strive towards creating an environment from which can emerge 10 Nobel laureates. We have won Nobel prizes in literature, medicine, physics, chemistry, economics, etc and I don’t see why we can’t produce more such laureates. India needs to become a source of global innovations, by generating new businesses, technologies, and new business models. To create these new models of innovation we need to stress on education by making education affordable to one and all, without any lowering of quality. The bottom of the pyramid, 800 million poor Indians can become a major source of innovations, if empowered with the tool of education. Moreover, our diverse culture, heritage, languages, dialects are all a benchmark for the practice of universality and inclusiveness. With our people, culture, and the right mindset, we can and need to create minimum 30 multi national Fortune 100 companies.

So how do we do all this?: I feel that we need to strike a balance between our aspirations and resources. About seven years ago, I had suggested a target of 10% growth and many in the country had said that we don’t have the resources for 10% growth. But we need to let aspirations lie outside the bandwidth of our resource base and share it with the rest of our brotherhood. A shared aspiration is key for changing India. And to do this, we have to leverage resources by getting more for every person and every rupee spent. Secondly, we need to imagine India@75 rather than digging into our past. And thirdly, see a new pattern of opportunity and pursue it.

Mega-trends for India’s development: Today, there are 380.6 million people who live on less than $1 a day. We need to dissolve this abject poverty and it shouldn’t be a concern 15 years hence, as it is today. This can be achieved by strongly focusing on education and skill building. We need to create 10 million plus jobs annually. Taxing the rich and subsidising the poor won’t help. We have to create inclusive growth by creating sustainable opportunities. Latest technology should be made available to everyone. We need to draw our immediate attention towards key resources like water, energy, health and deforestation. The current development models for water, energy are inappropriate and we must develop new ideas. India is an ecological time bomb. The shortage of water, cost of energy is high. We have to thus find better use of resources and support new innovation in this area.

Focus on governance: In India, one can safely say that the poor quality of human development is not about lack of resources but the level of corruption in the deployment of resources. Our cost of corruption is $ 20 trillion per annum. Is this cost worth paying? We need to ask ourselves. Good governance or less corruption leads to high levels of GDP per capita. A nation does not get rich first and then become less corrupt. It?s the other way round. In 2006, our corruption perception index was 3.3, a very low grade out of ten, with few countries being worse. We have the opportunity to make significant improvements in this score by 2020. India may not reach the level of Finland by that time, but even if we reach a 7 on corruption (somewhere near USA), and a rank of 20 out of 175 in human development index, our per capita incomes will move up dramatically, say $25,000 purchasing power parity (PPP) from the current $3,800 PPP.