Sunday, January 10, 2010

What Drives Value Creation in a Society?

Just as 2009 was coming to an end I got to attend a silver jubilee re-union of my college batch (IIT Delhi). In one of the discussions, my close friend, classmate and also colleague for quite a while at NIIT - Mukul Saxena -- triggered a thought. He said that if we ask ourselves the question - what makes Indians and North Americans operate differently -- we will get a good insight into what we need to change.

Interesting question - I thought. So I went ahead and asked my colleagues in Affirmative Action team the following question -- you can respond too if you like.  I will post my own responses and some selected responses of my colleagues in a while.

Here is a question – the answer to which might help you create value in your own lives and lives of others that are linked to you:

Data points:

US Population: 250mn
GDP: USD 14.2 Tn
From zero to the leading nation of the World in 250 years

India Population: 1250 mn
GDP: USD 1.2 Tn
From Hero to 20th position in the World in 300 years
So the question is:

What makes a typical American in US create ‘sixty’ times more value than an Indian in India?

11 comments:

  1. Hi Neeraj,

    My thoughts: GDP may not be the correct indicator for comparing value creation. If I cut more trees to create more fuel to run more SUVs, I can contribute to the GDP. If I don't have strong family values, insist on nuclear families, spend more money on house rent and child care, I can contribute to the GDP. GDP is just the amount that people are spending, it's the money in circulation.

    I think a true assessment of 'value creation' should include aspects that are 'sustainable.' For example, how many forests are we saving and therefore how much monetary gain are we getting by not requiring mechanical interventions for purifying our air.

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  2. Collective will
    Scientific temperament
    Acceptance of reality (Read disengagement with the 'glorious' past).
    I think we misread ourselves when we say (you also say here) we were Hero. Instead we should say we want to become Hero and here is how!
    Others did what they did because they did all of the above and took everything that made them strong from everywhere including us Indians. They continue to do so!

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  3. The more I think about the question, the more I tend to question if statistics can be a base to probe a problem. The development of US to the recent pre-recession glory attributes to many factors, with the contribution from the typical North American just one of them. I don’t even know what a typical North American is, but to a certain extent I can imagine a typical Indian.
    The typical Indian contributes well to the nation’s GDP growth; well-renowned economists point to the fact that one of the reasons why India was shielded from the global recession is the saving power of the society. Of course, the monetary policies adopted by the Government also came to the rescue.
    The IT sector has shown that when you create jobs, the human capital is ready to make the best use of the opportunities. With the limited education that we receive, I’m inclined to think we are doing well. In my 11 years of working experience in the industry, I can appreciate how education should be and how it was during my schooling years.
    The society is ready to embrace development. They do understand the concept of “value creation”. A typical Indian is trained to make the best use of their limited resources. To harvest this potential from this society, we need to impart the appropriate education to the masses. We need to re-look at how people learn. In one of my blogs, I expressed happiness that the 10th standard public examinations are being scrapped away. Irrational competition kills growth potential. We don’t give enough time for the butterfly to come out of its cocoon.
    We need to provide an adequate, if not the best, environment for the society to grow. This includes Education, Infrastructure, Food, and Shelter. The typical educated Indian knows these areas need vast improvement. He or She lives in the global world now, and has more clarity. If I seek the help of statistics, I might be bewildered as to how many Indians have contributed to the GDP of North America, because there were no opportunities in their nation of birth.
    With my limited education, I tend to think it is not a question about the typical Indian; it is more a question about the gifted Indians at the top.

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  4. Hi

    I guess the my GDP and hero comment has led away from the main issue. So I will address this in the next blog. However, here I am pasting a response from my colleague Meera Datta:
    Dear Neeraj,

    Here are my thoughts on your interesting question!


    Although one can think of several reasons, one contribution factor to the difference in "value" creation between the two countries could be our obsession with "status in society".

    If we look within ourselves to find out prompts us to take crucial decisions - choice of subjects in college, taking up a job, choosing a life partner, how to bring up children, how to treat parents, in-laws, spouses, which car to buy, etc. etc. - one word sums it up - "status". Does our choice/act bring us "status" in the society?

    In otherwords, we view ourselves through the "eyes" of society. This brings about a dysfunction in us leading to a loss of independent thinking. Two things follow - either we conform or we rebel - both conforming and rebelling are two sides of the same coin of dysfunction.

    Whether we conform or rebel, we no longer bring in excellence into whatever we do. By excellence is meant doing work to the best of our innate capacity and not in comparison with others or what others might think about us.

    Two things will happen when we bring in the this attitude of excellence to the work we do:

    a. We automatically allow and aid others to follow their excellence instead of the "pulling others down" or the "hoarding" mentality we currently possess - be it knowledge, wealth, or even support!
    b. We also evolve and not progress. By evolution is meant making room for "mutations" to occur - sudden leaps in thought leading to discovery/inventions that enable us face external and internal circumstances in the manner they are intended to be faced. Progress merely means continous delta changes with no room for step changes to occur.

    America seems to promote independent thinking and decision making right from childhood upwards leading to excellence and hence evolution.

    Anyways, to be fair to ourselves,
    a. Unlike America, historically we have been under the influence of "invaders" for the last 500 years or so whose motives were destruction and/or exploitation. Of course we had no business to allow ourselves to be "invaded" and perhaps the reason for this is the same as above - we were more involved in our own pettiness rather than face the invaders.

    b. Unlike America, our population has increased but our physical spaces have shrunk - there has been very little colonization by us - hence the same people have multiplied over the years in a smaller area. Just imagine if 90% of the European/Anglo-Saxon race were to go back to Europe - they wouldn't have a leg to stand on!

    c. Perhaps America is what it is because of a few good men/women it possesses! The average American elected presidents whose chief business seems to be to meddle in other nations' affairs!

    Warm Regards,
    Meera
    ________________________________________

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  5. One more interesting response from a colleague - Tulika:
    Hi Neeraj,

    These are my thoughts to your question:

    To create value in our lives, we need to have a desire, a need to do something- to move from one level to another. Once we feel this desire, dream, want or any other such term you want to label, we want to learn and grow. From thereon nothing stops us in moving in this direction. I feel it is not about an Indian in India or America, because we do know of ‘brain drain’, we are aware that Indian brains are the driving force in America’s economy. So it is really an individual choice- people who want to maximize their potential, want to learn/ grow- decided to find those spaces, irrespective of where they are based. However, to be fair to us, we need to have full stomachs, before we can realize our dream. Our struggle against poverty, coupled by a huge population is a bottleneck, although agreeably America was also not born rich!

    What helped, according to me, is education which plays a crucial role, for which America must be given its due. Freedom to choose, to ‘be’ and most importantly, the power to question is something that they learn from school; these being the formative years in any child’s life and thus, the guiding path forever. When you have the freedom to choose subjects like carpentry, driving, gardening, cooking etc, you are essentially assuring the child that it’s okay to follow what your heart desires, these are respectful professions and thereby you teach the child dignity of labor. An average middle class American house has members doing ALL the chores themselves- cleaning, gardening, clearing garbage etc. It is not considered ‘lowly’, unlike what our societal ‘values’ teach us, thus giving birth to the caste system in our case. While a few generations lived with it, isn’t it amazing that when change is a natural process, why, we in our generation are also holding on to concepts like this, knowing them to be detrimental for growth? We don’t question anything!

    This brings me to the point where I would like to question ‘value creation’. Surely pure economic value is not the answer; otherwise America wouldn’t be hit by economic meltdown! But because they question, they will learn. They have realized that consumerism is not the ONLY way and are seeking answers. Reflecting on the Indian context, ‘value’ today is being used very loosely and is one of the most ambiguous terms. It is used when we want to ‘abuse’ others’ independence and rights. When someone wants to be different and explore another perspective, it is considered as a ‘threat’ to Indian ‘values’.

    So clearly both (purely) economical and social ‘values’ is not the answer to success/ peace of any society. The only answer lies in questioning ourselves, at every step, so we find a balance between both types of values. That is the only way to find corrective measure, before much time lapses. And anyways, isn’t that an innate quality that each one of us is blessed with? Observe a child, as early as s/he is 1 year old and see the ability to question, almost anything in her/ his line of vision. That is truly us and if we are able to retain this quality, despite all external influences, we know we can add real value in our lives.

    So according to me America doesn’t have a genie that has caused this (on the contrary some of their techniques of causing devastation in developing countries are quite contrary to that!). The genie is in each one of us and when we see that, nations become secondary.

    Warm Regards,

    Tulika Mehra

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  6. Deep down all human beings – Indians or Americans-- are pretty much the same. We are all driven by similar factors, a desire for person achievement and satisfaction, a need for appreciation, and yes rewards. Therefore, in my opinion this question isn't about Indians vs. North Americans or for that matter any other community. Instead the real issue concerns “what stops us from realizing our true potential” .



    In my opinion, human beings are programmed by the Almighty to function harmoniously with others rather than individual sprinters. We perform to our best when we are nurtured from outside by maybe our workplaces or some other form of a social organization and not just in our capacities as individuals. But, the societal framework in which we function and the state machinery in India isn’t exactly conducive to an individual’s or social growth. Probably which is why, not many Indians have got Olympic medals, a Kalpana Chawla travels to space in an American spaceshuttle and a Subodh Gupta creation sells for $1.2 mn but in London.



    Our education system trains us to be dedicated, hard working employees rather than forward-thinking entrepreneurs. Not that there’s anything wrong in being an employee or that each one of us needs to start a business enterprise. For me an entrepreneur is one who pushes himself beyond traditional thinking and is more open to experimentation and innovation. Though not always, there‘s a greater possibility that such an individual will create more wealth for himself and in the process, for society at large.



    We are a nation of people who are too complacent and content. Though there are exceptions, most of us prefer reveling in past glory rather than achieving new laurels. We prefer not to raise our voice even when something wrong or unfair is being done until it affects us directly.


    However, now there are changes---both in the attitudes and the way our state functions. So, probably it’s a matter of few years, when India moves ahead as well

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  7. From the GDP comment -- I went and checked what all people are doing to figure out growth, progress, prosperity, value creation, peace -- from the perspective of Society and overall happiness from the perspective of an individual.
    I found that the Happiness Index was defined a couple of years back by Bhutan's PM. That country has now adopted the Index as the prime measure of its growth/development. It is interesting to study if any of you would like to: http://www.grossnationalhappiness.com

    That said - I believe that while current GDP is definitely not a complete indicator but it does reveal the basic drive, direction, and passion of the country and its people. And in the absence of a better and more complete indicator can be a good start point with appropriate amounts of salt and pepper added for personal taste.

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  8. Aseem SrivastavaApril 8, 2010 at 5:42 AM

    Hi All,

    Completely agree with Meera's and Shalini's comments.

    To add my two cents, it is intrinsic motivation to optimise performance (be it any work!) and move on to the next task which differentiates us from other developed cultures. As others rightly pointed out, we grow up in a society with too many if's and but's around everything. Although most of it is good for personal and spiritual happiness, it does not help us think out of the box or apply those ideas to our daily lives.

    The challenge moving forward is to embrace the strengths of developed nations without losing the values and strength of character that an 'Indian' brings to the table. Is it possible? - "Everything is Possible"

    Have a nice day.

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  9. Thanks Aseem!

    Its a good thought that we should learn from others with the caution of not losing what is good with us in the process.

    My view is that - each individual in our country needs to be doing this and hence this in itself must be a value that is demonstrated by some of us to begin with. Only then it will become a model that will inspire others.

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  10. Hi Neeraj, a very interesting question you've asked. From my observation it is the society that makes the difference. It is reflected from the startups that come up in US (A trend that is catching on in India, but too late, too little). If today I want to leave my formal education and start my own venture, my parents would bluntly say, "Better study first". And by the time I am through my formal education, I've spent so much that I cannot invest in my own, original ideas. And this is what I call, death of innovation. Some people break the barriers in India and create value. Most of us are pushed down by the societal pressure. If I stay at home without job for 6 months working on my startup, people around me would start criticizing my parents. They'd say, "Ladka nalayak tha, to dukaan khol li". And you know, 6 months is too little a period for any business to even break even. Without offending anybody, I am happy the age of baby boomers is quickly phasing out. Now it is upto the individuals. Society is there to put brakes, like the communist-capitalist thing. Individual only knows acceleration. Both are necessary, else we would either face the perils of both complete uncontrolled capitalism (as what America did) or we would be under a socialist misery (like the early 90s phase)

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  11. All said and done. We need to keep doing what we believe in. The difficult part, I guess, is maintain the passion in our own beliefs in the face of constant and may be even wide-spread opposition.

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