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India’s Lack of Entrepreneurship is Due to its Culture

Saurabh Malkar

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I came across an article shared on a Facebook group, describing Apple co-founder, Steve Wozniak’s, take on Indians’ lack of creativity and the resultant dearth of innovative enterprise. The article was met with a lot of pushback and hate-posting, mostly arising out of national and cultural chauvinism.

But Woz’s words were like music to my ears. He is certainly not the first person to have lambasted Indians for their lack of creativity and innovation, but he is one of the few ones who touched on points that subtly implicated the culture, straying away from the oft-cited bogey man – the Indian educational system.

I will try to swing further Woz’s wrecking ball and try to break down (pun intended) the shortcomings of Indian culture that stymie creativity, innovation, entrepreneurship, and individual progress.

For this rant, I shall use everyday examples and observations, while eschewing citing scientific literature. This is, thus, an opinion grounded in empiricism.

Low Expectations

Entrepreneurship is the pursuit of a lofty goal, often, with scant resources. The challenges are not merely of an infrastructural or a monetary nature, they are first and foremost of a psychological kind. The individual has to place his personal life and tertiary goals on the proverbial altar that will serve as the foundation of his venture.

Unfortunately, such goals and aspirations have no place in a culture of low expectations. Indian culture encourages playing safe just so one gets to check off a centuries old check list of ‘success.’ The check list comprises of education (in select disciplines), employment (in select industries), matrimony, a mortgage, and a car loan.

With the bar set to keeping up with the Joneses, setting off on an almost monkish, backbreaking entrepreneurial journey is off limits.

Group Think

Starting a business or being innovative requires a person to make critical decisions that can either make it or break it. Such critical decision-making needs one to be self-aware and accustomed to make independent decisions from a young age.

A culture that puts a premium on defining one’s identity in the ethnolinguistic group in which one was born is not at all geared for the rigors of independent decision-making.

To add to the burden, individuals are perceived as part of a group and are expected to be in lockstep with group conventions, practices, and thought. For a maverick, this can be stifling and self-isolation is the only counter-measure.

A sub-malady of group think is that individuals get painted with a rather broad brush. Group outliers, viz. future mavericks, tend to be ridiculed, jeered, and in some cases, ostracized due to the misalignment of their compass with the group north star.

A combination of group think and steep penalties on renegade behavior means that the raw creative energy, the fuel of entrepreneurship, is lost or discharged in hackneyed pursuits.

Identity Politics

Group think and ethnolinguistic segmentation segues into identity politics. People tend to judge individuals by their default identities, issued at time of birth, by no virtue or fault of their own.

While this pathology seems to be at its peak in the US, fortunately, there are counter voices that rail against it.

In India, it’s part and parcel of the routine life. Preferential policies and biases towards hiring folks of similar ethno-linguistic groups as that of the employer is rampant in most parts of the country.

Identity politics can creep into fraternizing, segmenting the populace along ethnolinguistic fault lines. This can be extremely counterproductive to the process of information exchange and making beneficial acquaintances – essential pre-requisites to entrepreneurial beginnings.

Lack of Grassroots Innovation

Entrepreneurship has become such a money-minting buzzword that universities now run courses that teach folks how to bootstrap their ideas into successful businesses. Big to medium sized cities see at least one event dedicated to discussing and fostering entrepreneurs. Magazines beat the entrepreneurial drum at least once in their publication cycle and Youtube is chalk full of videos on entrepreneurial hacks.

 

But really, entrepreneurship and innovation is not a gala affair and certainly doesn’t result from a structured top-down plan. It’s more akin to the randomness and meandering trajectories of Brownian motion. Over time, a few of these random trajectories lead to success.

Rockefeller’s success with oil, Henry Ford’s successful application of the assembly line, modern day advances in fracking, the smartphone, and all the petty things that make our domestic life convenient have one thing in common. They are the cumulative result of the effort of average individuals, with great minds and even greater dreams, who wanted to innovate contemporary processes and systems to bring about a greater good.

Indians, for a variety of reasons, lack the innovative mindset. Outliers apart, most Indians don’t think of upgrading existing ways of doing things to make their own lives better. To demonstrate this, I will use two extremely routine, but telling, elements of our lives – house cleaning and food packaging.

House cleaning involves sweeping, mopping, and wiping down surfaces.

The Indian broom hasn’t undergone any significant upgrade since its inception. It’s still made of long fibers of processed grass, held together by a plastic casing which doubles up as the handle. From head to tail, the broom measures around 3.5 feet. The result: poor cleaning and significant strain on the back from bending over. No thought has ever been put into upgrading this tool. It’s only through the entry of products from the West that urban Indians are being introduced to the ‘real’ broom – one with greater work efficiency and optimized for use in upright posture.

Mopping in the average Indian household is performed with a rag and a bucket of water. One has to squat and use their bare hands to mop the floor with the wet rag. Only recently has a mop and a purpose-built bucket been introduced into Indian homes. But to much dismay, this convenience is the result of globalization and trade, not local innovation.

It’s routine to wipe down surfaces with a damp rag. The process requires frequent rinsing and wringing of the rag. Not only is it time consuming, it also produces poorer results. To date, there is no alternative to this, as there is nothing like Clorox wipes on the market.

Food packaging is my pet peeve. I was particularly wowed by food packaging in North America. There is a great emphasis on three criteria – ease of opening, resealability, and ease of dispensing. Cue food packaging in India, and except a few multinational brands, most food packaging is dismal. None of it meets the above three criteria and situation hasn’t changed much over the past few decades.

It seems, at least empirically, that the driver of innovation and entrepreneurship – the individual – is missing in action. This very much explains, partly, the state of shambles India has found itself in.

Lack of Infrastructure

I won’t detail on infrastructural quagmires affecting at a macro level like GDP and public transportation. This is an individual-centric harangue, so I will touch on the micro effects.

Innovation or entrepreneurial pursuit needs contemplation, solitude, and some spare time to etch out the road map. The above elements become unattainable due to the way infrastructure is (mis -)set up in India, at least in urban India. (These problems don’t occur in rural India because there is no infrastructure to begin with.)

The Indian infrastructural setup is for the most part pre-industrial. This accompanied by a pre-industrial culture and way of life throttles any serious contemplation and self-reflection.

Following has been my observation.

Poor roads and dismal traffic management often result in urban Indians spending over 3 hours commuting one-way. While one could theoretically brainstorm and introspect while stuck in traffic, the co-existent cacophony from honking and outdated car motors makes this theoretical prospect unfeasible.

But what about using ear plugs and reading up on relevant issues on the Internet while stuck in traffic? This unfortunately is made impossible due to poor Internet speeds/bandwidth – a characteristic flourish of digital India.

The same lack of quiet is continues on into the urban residential setup, thanks to poor city planning, resulting in noisy vehicular traffic streaming right down the middle of the township. The problems get compounded, every now and then, by cultural and social events, where making the most noise and being inconsiderate to others seems to be the end goal.

With a lack of privacy, quiet, and uninterrupted me-time, it’s hard to think about anything, except the most trivial matters.

Inverse Logic

Part of the goods and services tax in India is also the culprit for not affording the average Indian sufficient downtime. Elements that free up time and make daily routine convenient – frozen and canned foods, processed foods, packaged foods, and household appliances like dishwashers, refrigerators, washers, and ovens – incur a steep tax.

The rationale: the above goods and products are luxury items, hence, should be steeply taxed.

The counter-rationale: how can these conveniences become mainstream if they cost a lot?

The result: most Indians continue to live pre-industrial lives, with household chores occupying a significant chunk of their daily schedule.

Introspection, contemplation, and brainstorming, then, are prerogatives of post-industrial cultures of the West, which is where most innovation and developments occur. This is not serendipity, it is cause-and-effect.

Parental Baggage

This might become a contentious issue.

Exceptions aside, adults in the West are expected to bear fewer parental responsibilities than adults in India. While helping parents out occasionally and tending to their health in times of need can certainly be accommodated in the life of a young adult, there is a threshold to such accommodation, beyond which it adversely affects the adult’s life.

Indian children are not only expected to take care (read middle age to grave) of their parents, they are also expected to fulfill some of the latter’s dreams and expectations. In some unfortunate cases, adults are expected to live with their parents, in line with long-standing cultural norms, despite having the means to move out.

The externalities of such a setup: young adults live a sheltered life and become encumbered with expectations and demands that can put their personal pursuits in a chokehold.

Such young adults can hardly be expected to become trailblazers and mavericks.

Indians are Philistines

Granted India has its own philharmonic orchestra and hosts art exhibitions and cultural festivals. Upon analyzing closely, one finds that such events draw out only the uber-elites of Indian metros – the real bourgeoisie with Ivy-league education and refined tastes. Unfortunately, they are a niche minority.

Most of the the Indian population, including inhabitants of metros, despite their university degrees and corporate careers, couldn’t care less about the arts. Patronage to the arts is considered so superfluous that it doesn’t even brush past the mental orbit of an average Indian.

The arts play a vital role in that they encourage creativity, out-of-box thinking, and open intellectual dimensions that cannot be opened by rote lessons that are the forte of the Indian K-12 system.

Case in point: the user experience on Apple products wouldn’t have been so definitively distinct had Steve Jobs not dropped in on a calligraphy course at Reed College.

It would be almost blasphemous and heretical for an Indian to wish to study the arts or want to build a career in humanities. Not only will he/she incur the wrath of their parents and the ridicule of a vacant society, they will remain cash strapped for the rest of their lives. The culture and the resultant economic system isn’t built to nurture artistic pursuits.

Notable Takeaway

The common thread running through all the above listed reasons is culture. It’s not the lack of money, or the burgeoning population, or poor governance – oft-cited culprits – that result in a dearth of entrepreneurship, lack of innovation, and a miserable existence.

In Closing,

While I would like to end on a sanguine note, I prefer realism to optimism. Cultures are difficult to change. Cultural upheaval results from the efforts of individuals who have seen the light and hazard walking towards something better.

There is a genuine dearth of rugged individualism in the Indian culture. With the engine for change, innovation, and entrepreneurship non-existent, there cannot be a cultural shift or individual progress or creative enterprise in India.

An ex-dentist and a business graduate who is greatly influenced by American conservatism and western values. Having born and brought up in a non-western, third world country, he provides an ‘outside-in’ view on western values. As a budding writer and analyst, he is very much stoked about western culture and looks forward to expound and learn more. Mr. Malkar receives correspondence at saurabh.malkar[at]gmail.com. To read his 140-character commentary on Twitter, follow him at @saurabh_malkar

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Economy

Côte d’Ivoire: Robust growth under the looming threat of climate change impacts

MD Staff

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According to the Economic Update for Côte d’Ivoire, published today, the short- and medium-term outlook for the Ivorian economy remains positive. The economy is expected to maintain a steady trajectory, with GDP growth of 7 to 7.5% in the coming years. Titled “So Tomorrow Never Dies: Côte d’Ivoire and Climate Change,” the report highlights the urgent need to implement measures to ensure that climate change impacts do not imperil this economic progress and plunge millions of Ivorians into poverty.

“The solid performance of the Ivorian economy, which registered growth of almost 8% in 2017, is essentially due to the agricultural sector, which experienced positive climate conditions. The economy also benefited from a period of calm after the political and social instability of the first half of 2017 and from more favorable conditions on international markets,” said Jacques Morisset, Program Leader for Côte d’Ivoire and Lead Author of the report. “The Government also successfully managed its accounts, with a lower-than-expected deficit of 4.2% of GDP, while continuing its ambitious investment policy, partly financed by a judicious debt policy on financial markets.

However, the report notes that private sector activity slowed in 2017 compared with 2016 and especially 2015, which may curb the pace of growth of the Ivorian economy in the coming years. Against the backdrop of fiscal adjustment projected for 2018 and 2019, it is critical that the private sector remain dynamic and become the main driver of growth. This is particularly important in light of the uncertainty associated with the upcoming elections in 2020, which could prompt investors to adopt a wait-and-see approach.

As economic growth in Côte d’Ivoire relies in part on use of its natural resource base, the authors of the report devote a chapter to the impact of climate change on the economy. They raise an alarming point: the stock of natural resources is believed to have diminished by 26% between 1990 and 2014. Several visible phenomena attest to this degradation, such as deforestation, the depletion of water reserves, and coastal erosion. According to the Intergovernmental Panel on Climate Change (IPCC), climate change could reduce GDP across Africa by 2% to 4% by 2040 and by 10% to 25% by 2100. For Côte d’Ivoire, this would correspond to a loss of some CFAF 380 billion to 770 billion in 2040.

This report sounds an alarm in order to spark a rapid and collective wake-up call,” said Pierre Laporte, World Bank Country Director for Côte d’Ivoire. “Combating climate change will require prompt decisions and must become a priority for the country to maintain accelerated and sustainable growth over time.”

The report pays special attention to coastal erosion and to the cocoa sector, which represents one third of the country’s exports and directly affects over 5 million people. With 566 km of coast, Côte d’Ivoire now boasts a coastal population of almost 7.5 million people, who produce close to 80% of the national GDP. Two thirds of this coast is affected by coastal erosion, with severe consequences for the communities and the country’s economy.

The Ivorian Government, which is already aware of this challenge and has prepared a strategy to confront it, must expedite its implementation. This would have the two-fold effect of developing a “green” economy and creating new jobs.

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Economy

A future of work based on sustainable production and employment

Simel Esim

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On the first Saturday of July each year, the international community celebrates the International Day of Cooperatives. This year’s theme, Sustainable consumption and production of goods and services is timely, as the ILO works towards a future of work that is based on sustainable production and employment models.

As head of the ILO’s Cooperative Unit, I have witnessed firsthand the positive impact of cooperatives’ commitment to sustainable consumption and production.

In Northern Sri Lanka, for instance, after years of civil war, I saw how cooperatives helped build the resilience of local communities.

A rapid assessment at the start of the ILO’s Local Empowerment through Economic Development project (LEED) indicated that cooperatives were the only “stable” structures present in Northern Sri Lanka before, during, and after the conflict. Since 2010, the project has been supporting agriculture and fishery cooperatives by securing fair trade certification for their products and helping them establish market links.

I’ve also listened to inspiring stories from other parts of the world of how cooperatives have joined forces to contribute to sustainable consumption, production and decent work – often through cooperative-to-cooperative trade.

Some of these stories were shared at a recent meeting in Geneva of cooperative and ethical trade movements.

We heard how Kenyan producer cooperatives’ coffee has found its way on the shelves of Coop Denmark and how biological pineapples from a Togolese youth cooperative are being sold in retail cooperatives across Italy. We heard how consumer cooperatives in East Asia have developed organic and ecolabel products, while educating their members about the working conditions of producers and workers, as well as on reducing food waste and plastic consumption. We also shared ILO experiences in supporting constituents in the field.

The emerging consensus from the meeting was that cooperative-to-cooperative trade can help lower the costs of trade, while ensuring fairer prices and better incomes for cooperative members and their communities. Opportunities exist not only in agricultural supply chains, but also in ready-made garments and other sectors.

Cooperatives at both ends of the supply chain have been joining forces to shorten value chains, improve product traceability and adopt environmentally-friendly practices. At the ILO we have been working with our constituents to improve the social and environmental footprint of cooperatives around the world.

As the ILO continues to promote a future of work that is based on sustainable production and employment models, a priority for us in the coming years is to facilitate the development of linkages between ILO constituents and cooperatives. The aim is to encourage joint action towards responsible production and consumption practices, the advancement of green and circular economies and the promotion of decent work across supply chains.

Source: ILO

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Economy

Mongolia’s Growth Prospects Remain Positive but More Efficient Public Investment Needed

MD Staff

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Mongolia’s economic performance has improved dramatically with GDP growth increasing from 1.2 percent in 2016 to 5.1 percent in 2017 and 6.1 percent in the first quarter of 2018. While short- and medium-term economic prospects remain positive, Mongolia faces core structural vulnerabilities that hinder its potential, according to Mongolia Economic Update, the latest World Bank report on Mongolia’s economy launched here today. The report also highlights the importance of improving efficiency of its public investment programs given extensive consequences from the overambitious and unrealistic investment programs implemented in the past.

“Last year was a good year for Mongolia with favorable commodities prices and the successful implementation of the government’s economic recovery program,” said Dr. Jean-Pascal N. Nganou, World Bank Senior Economist for Mongolia and Team Leader of the report. “This resulted in improved fiscal and external balances, triggering a slight decline of the country’s public debt.

The recovery is expected to accelerate with a GDP growth rate averaging more than 6 percent between 2019 and 2020, driven by large foreign direct investments in mining. Other than agriculture, which was severely affected by harsh weather conditions during the winter, most major sectors including manufacturing, trade, and transport are expected to expand significantly. On the back of increasing exports and higher commodity prices, economic growth will continue to have a strong positive impact on government revenue, contributing to the reduction of the fiscal deficit.

The unemployment rate dropped to 7.3 percent in the last quarter of 2017, compared to 8.6 percent a year earlier. Still, it increased to 9.7 percent in the first quarter of this year, reflecting Mongolia’s highly seasonal employment patterns due to difficult working conditions in the winter, especially in construction, agriculture, and mining.

The report highlights possible short- and medium-term risks including political risks, regional instability, climate shocks, and natural disasters. The most critical risk identified is a sudden relaxation of the government’s commitment to full implementation of its economic adjustment program supported by development partners.

In addition, the economy remains vulnerable to fluctuations in global commodity prices and a productivity gap. The best long-term protection against these two vulnerabilities is the diversification of the Mongolian economy.

To create a strong buffer against economic vulnerabilities, the government and donors should give a high priority to economic diversification that helps counter the ups and downs of the mining sector. Investing in human capital and strengthening the country’s institutions are the best way to support diversification, together with sound investments in crucial infrastructure,” said James Anderson, World Bank Country Manager for Mongolia.

The report takes a closer look at public investment programs implemented over the past five years, which surged until 2015, contributing to large increases in public finance deficits and the public debt. Mongolia needs to review and reshape its public investment policies and decision-making processes to improve efficiency of public spending, including clear project selection and prioritization criteria, as well as proper maintenance of existing assets.

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