Social Media for rookies

Digital marketing for Rookies

Social Media offers the power of internet to collaborate and share. It is also a platform to a contemporary consumer to search for choices, research on product utility, customer reviews, prices, delivery and warranties etc.  The ability of the customer to collate the data and filter through the information is the new age ‘empowered customer’

An ‘empowered customer’ is one who makes a rational decision of choice based on data and facts available to them. As a consequence, the power of brand may have a lower impact vis-à-vis a generic product with similar features and serves similar or identical utility. It means small businesses have an opportunity to leverage the internet to their benefit by addressing the needs of the client, at lower costs and relatively higher margins. Digital Media offers comprehensive mediums to communicate with your clients, however, the problem is, are the customers or the prospective customers reading or comprehending the information your business is displaying?

The ‘RACE’ is to Reach out to your Customer, Identify the sources through which they Access their information, Customize/ Personalize the information which the Business needs to communicate and the customer accesses and most importantly, create an Experience by engaging the customer in a pro-active way. A two way communication will enhance client experience and engagement with the business, because it will lead to customer empowerment to participate, share and collaborate.

1. Reach- Your target audience or market

Ask yourself

• Who will you reach out to?  Client profile
• Whom are you trying to reach out to? Prospective client profile
• Where is your client? Location

 

2. Access-

There are two aspects to Access (a) How is your client prospective accessing your business (b) how does your business access your client.

 

The Points of Contact could be via Google, Bing, Social Media, Website, mobile website, Apps etc.  The devices to access could be Smart phones, PC’s, tablets, Laptops etc.

 

Small businesses must comprehend with the variety of points of contact, channels and devices to access the information. With different platforms available like Android, Windows and Apple businesses need to adapt the contact applications to suit the user device.

With a focus on building Economies of Scale, depending on the macro and local micro market environment, access strategies can include:

• Cooperate
• Collaborate
• Acquire and
• Merge.

3. Content Customization

“Think Global, Act Local”

 

Glo-cal- A business must customize content such as Language, Images, presentation, colors, cultural beliefs, values etc. Information presented to a client must be in a language which the prospect understands, is able to process and act quickly. For e.g.

• What language will you use to communicate with clients  in China? English will not make much sense! You need to identify Cantonese, Mandarin or from several local dialects
• Which currency would you indicate for your product? The ‘sound of Dollar’ in many countries will itself make it beyond consideration because it is immediately tagged with “Expensive”, premium etc. So how about pricing your product in local currency (¥, RMB, ₹, ₩ etc.)
• Have you thought about a Multi-cultural- multi-ethnic representation of your product for wider market acceptance and across your traditional borders- Business beyond Borders?

 

4. Experience: The question which any business must ask to itself is, how do we create a client experience through our digital presence? Experiences expedite user choices and decisions.

Some very good options exist as strategies:

 

• Virtual tours
• Virtual experience
• User experience and testimonial videos

Social media offers multitude of channels to reach your customer. It helps your business build Economies of Scale and build competitive advantage to adapt during leaner times.

 

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References:

CIM UK. 2014. Strategy [Online]. CIM Website: CIM UK. Available:http://www.cim.co.uk/marketingplanningtool/sect7/sect71.asp [Accessed 23-04-14 2014].

 

KOTLER, P. A., GARY 2010. Principles of Marketing, New Jersey, Pearson.

 

MANNING, J. 2014. Silver linings. The Marketer. London: CIM, UK.

 

 

 

19 Words That Will Make People Like You More

The Four Variables of our Faith

The Four Variables of our Faith

“When I do good, I feel good. When I do bad, I feel bad. That’s my religion.”

― Abraham Lincoln

Time will tell what religion is and why people believe in it. My point today is not Religion per se, but the Faith which people have in God, the Almighty.

I won’t reason if there is a god or there is not, nor will I pick on a particular religion and dig the best or the worst of it; However, I do believe that all religions in the world have certain common variables to them. It is these common variables, or threads which define the teachings of any religion. They might sound different they might be spelt differently but their interpretation is common across the various religious followings.

I look at a human beings life as a journey. This journey is not exactly a walk in the park. The journey of a human being is like a turbulence while flying or a more fitting description would be travelling by car on a typical Indian road; Ha! I got this right

Indian roads- have you ever come across a road in India which doesn’t have potholes? Have you come across a road in India which is straight? Have you come across a road where you have never had a traffic jam?  Just as the probability of a YES to any of these questions is minimal, the probability of having a perfect life is a utopian expectation.

Let’s see what Lincoln said; When I do good (read Deeds or Karma), I feel good (self fulfillment, happiness)

A religion is like a book. The Cover page of this Book called Religion is the Faith i.e. Dharma; The pages inside are your Deeds i.e. Karma while the Index pages (though important but not critical) is the devotion i.e. Bhakti. The author of the book is YOU

Now what does life book say?

1. Faith ( Dharma)
2. Deeds ( Karma)
3. Devotion ( Bhakti)
4. You will believe the author, if you not only read this book but also believe in it and make it a part of your everyday life ( Trust)- Remember what the bakery cash counter note says-

“In God we Trust… Everyone else pays”

What is your Faith?

My faith is not the religion I believe in. It is the way I choose to lead my life. The choice of my life is in itself a service to the almighty for he/ she has little less of work minding me on a daily basis. It is the way of life I opt; At the end of the journey of my life, the question that would read as the title of the book would be, was he a good human? And trust me, that’s the only title possible at the end of this sojourn for each and every human. It’s like a book with Billions and Billions of prints but all of them look exactly the same and all of them have the same title- Was this Soul a good soul?

Right, so you have a book in your hand and the title of the Book says, was this soul a good soul? What do you do next? Open the Book.

Chap One says Introduction. What are you being introduced to? You are being introduced to a life form which exists as a soul and the deeds (karma) of that soul. It begins with infancy and like any other book the first few chapters are a bit boring till the story comes to a boil with all its twists and turns- Mystery, Sex and a Crime but here it’s slightly different- it is what you have done in your life i.e. a report card of each and every stage of life is a new chapter.

“You were a good man, whose deeds make the almighty proud for granting you life and a soul to live” or it can read, you were a mess of a human and far worse as a soul and the almighty has serious regrets about granting you life and a soul- probably Hitler’s report card will read that as a final statement which will be the complete reflection of your balance sheet- a Positive Life or a Negative life.

This is where an important variable comes into play- Devotion or Bhakti.

Devotion can often be on the lines of sycophancy where by the people believe it will provide for absolution for your deeds or most often bad deeds. God doesn’t expect sycophancy nor does he want it. God wants you to lead a life which he has blessed you with and be a good soul. Do good deeds. Don’t be a thief, don’t be a greedy monster; don’t be an evil devil; don’t make others life miserable for your betterment.

Confessions and prayers don’t earn you points. They should technically keep you on the right path but sometimes people believe that prayers are a platform where they have been granted a right to do what they think is right. That’s not the objective of prayers. Prayers are a way to thank god for what he has done for you. Prayers are a way to keep you righteous for it’s a message. Comprehend and decipher the message for understanding the true meaning of prayer.

So what’s the conclusion?

• Your book will be a story of who you are. You cannot change it once you are gone.
• Your book will be a tale of your life. It will be a benchmark for your future generation.
• You may wish to but it will not be possible to wash away your sins with prayers and confessions. Your deeds are your deeds and they are there to stay.

 Those are the memories you leave behind.

The Controversies of “Outsourcing”

The Controversies of “Outsourcing”

Outsourcing typically evokes very passionate opposition from Unions and people alike in the west. Outsourcing is typically seen as “labor for hire at cheaper rates” in the so called Third world countries. My opinion on outsourcing and the misconceptions held about it in the west originate from a perspective of a nation which is at the receiving end.

Background

Post 1945, the concept of “outsourcing” existed but in a different format and in line with the cold war ethos. The nations in the American axis received US investments and corporations like IBM, GM, Ford expanded to their sphere of influence in western Europe, Australia and NZ. On the other hand, was the USSR, which spread its influence by offering export opportunities and investments among their traditional partners which included countries like India, Vietnam etc.

The process of outsourcing in the IT world to India typically started around the year 2000 as the Y2K problem was getting resolved. It was a huge and cumbersome issue which many of the then garage based IT companies resolved and these firms today are among the Fortune 500 businesses today. Defined by the principle laws of economics, Supply and Demand, the Indian IT industry has grown exponentially since and has been in a position to constrain the rise in wages. Though the salary levels have increased since the year 2000, they are reasonably adjusted to the cost of living and inflation in India and therefore they are not at the same levels as many in the west would be offered for similar work however, many of the salary levels for experienced IT professionals are comparable to those in Singapore and other Asian economies.

Context of the Issue:

Just as rest of the world India is a signatory to the World Trade Organization (WTO). As a signatory to the WTO, India and other nations have certain obligations which need to be respected. Just as other countries, the Asian nations too have their disputes about trade and commerce resulting out off this. However, free flow of Goods and Services though is a utopia, but it has managed to achieve the primary objectives of WTO.

In the year 2006, after the WTO meet at Geneva, the message from India to the industrialized world (G-7 Nations) was on the massive farm subsidies which the industrialized world offered to their farmers and as a result the inability of the Asian and African nations to compete. The message was unambiguous- it was unacceptable.

Economics of India

• India has a population of over 1.3 Billion people. The country is about 1/3^rd the land size of Australia and many of the metropolitan cities like Delhi, Mumbai (Bombay), Bangalore, Chennai (Madras) have more people living in one city than an entire nation in Europe.
• The per capita income is steadily on the rise and in the urban regions it is around $ 1500. Of course if we include the rest of the population living in rural and Semi-urban locations it would be in the range of $600-700.
• The current economic growth rate is approximately 6% p.a. from the previous 10% and this slow down is attributed to the economic gloom across the world.
• Approximately 10 Million are lifted above poverty levels every year and this process is expected to go on for next 70 years to bring poverty to reasonable levels.

Popular Misconceptions:

• All Indians are poor and poverty ridden: It’s a very parochial perspective to hold such a view point because it is not true. There is a solid population of Middle class (approximately 25-35%) of the population who have traditionally been classified as middle class. There are the public servants, industry and business workers who fall into this category. One must bear in mind that there are 53 Billionaires living in India.

• There are no Businesses and Industries in India to create jobs: Another popular misconception which people haven’t thought of well. Companies like Wipro, Hindustan Lever, TATA’s,  Parle, The Public sector Banks (about 50 of them), Government institutions etc do exist and they have a very healthy record of providing jobs and employment to Indians. Indian Railways is amongst the world’s largest single employer with about 1.5 Million people in its rolls while the Indian Armed Forces has manpower of over 1.3 Million.  Here, we haven’t talked about the employment generated in the IT sector.

West’s perspective

• Western nations are under the impression that countries like India survive because of western investments.
• Many of the jobs lost in the west are attributed to the so called “cheap availability of Labor” in India.

India’s perspective

• India has traditionally cultivated indigenous businesses. Some of the businesses which were totally Indian include TATA’s, WIPRO, Reliance, Mahindra and Mahindra etc.
• India is a nation which is growing and growing not because of the exports market but because of high levels of domestic consumption resulting because of the economic growth. Unlike China, Indian policy makers thankfully have concentrated on promoting domestic consumption. The growth rates of over 9% p.a. till the last few years offered enough enticements to foreign MNC’s to insist that India open up its markets and let western businesses invest in India.

• India still doesn’t allow International retail brands like Wal-Mart, Ikea, K-Mart to operate in India. Nor does it allow Professionals and Education related businesses to operate in India. However, it does allow Banks, Hi Tech industries, FMCG, Electronics goods manufacturers etc to operate in India.
• Indian businesses have invested in loss making western businesses like Jaguar, Land Rover. It has not only protected loss of jobs but new market opportunities.

Resistance:

• Just like in the west, there are enough number of nationalists and Unions in India who oppose foreign investments especially from the West in India.
• There is a very strong undercurrent of resistance to Retail industry investments especially like those of Wal-Mart, K-Mart, Ikea etc as there is a fear that they would result in the closure of many dad and mom small business operators. In India we call them the “Kirana” shops.
• There is also a very strong resistance to allow foreign professionals like Doctors, Lawyers to work in India.
• One must not forget in 1977, India asked most of the American businesses to close shop in India. Coca Cola was one of the biggest victims of it. These years were also the years of hard core Socialists and Communists in Indian politics.
• In summary, Indian economy has its own list of No’s

The process of alignment:

As India is on the verge of becoming one of the largest economies of the world, there is also a greater pressure to adhere to the WTO and allow greater investments from the west. India is a democracy and Indians have voted against the traditional opponents of western investments like The Communist Party of India etc who have had big backing from the Unions. Many of the barriers to Entry are being reduced BUT it is a process of Negotiations.

If the western businesses want the Barriers to Entry Reduced in India, then what are the host governments going to offer to India in return, especially when India is not a major exporter of manufacturing goods?

As part of the WTO requirements, India has pushed for free movement of knowledge workers in return for opening up the domestic economy to investments from the west.  It is in response to this, US came up with H1B visa category, Europe is now coming up with the Blue Card.

Today Russia, Israel, Japan, Korea, Singapore, US, UK, France and Germany are among the largest bilateral trading partners of India. There is an increased push towards engaging nations bilaterally than as a whole. The advantage of it being, the trading partners are able to negotiate the best deals for their respective countries and the host governments are able to selectively offer inducements and benefits to businesses originating from such nations.

As a result, Big American corporations such as IBM, GM, and Ford are relocating from smaller and traditionally western allies/ economies to much larger Asian economies because of 3 main reasons:

1. Economies of Scale

1. The propensity of the densely populated market to have a much longer life; in simple English, the ability of the market to grow domestically long into the future with new demand being created every year.

1. There is also a growing possibility that the SAARC nations (South Asian Association for Regional Co-operation, consisting of Afghanistan, Pakistan, India, Bangladesh, Nepal, Bhutan, Sri Lanka and Maldives) will offer common markets by 2030. That is 1/3 rd of the humanity.

Conclusion:

• Increasingly largely densely populated nations like India and China will foster domestic consumption instead of an Export oriented growth which could be very vulnerable format of economic development with possible impact on national security.

• The larger Asian economies will engage bilaterally with the west. I do not see the prospect of nations dealing with a whole lot of nations and offering them incentives as a Group. That’s not going to happen. So countries like UK, France, and US etc will need to establish individual bilateral contacts.

• Majority of the bilateral businesses will occur between nations which are seen and perceived as friendly. For e.g. Japan, France and Germany have been engaged with India since pre-independence days. France was one of few western nations which did not impose economic embargo soon after the nuclear explosion and therefore Indian polity & civil society sees them as an ally. Israel has been one of the largest defense partners of India after Russia and Indians see Israel as a traditional comrade.

• To engage with Asia and especially the larger Asian economies, a country will need to think not about what but HOW. How can it engage with a nation which produces literally everything under the sky (Soap to super computers) and can sustain the domestic market with out depending on others? It’s definitely not by being critical of outsourcing.

The Economic fallout of slow growth

 

The economy in the present environment is slowing down as the impact of financial crisis sinks into various big and small economies. The problem that gets noticed in these times is the “slow business” and very inconsistent generation of wealth and flow of money with in the economy.

The brunt of the problem is faced by businesses which are small in size, are generally Mom and Pop run and have a very narrow customer base. This problem gets compounded as these small and micro businesses face increased competition, higher costs and lower profit margins. This is a typical problem faced in economies where the cost of production is unrealistically high. As the cost of production of a particular good or service goes up, then it is very likely that the market size shrinks proportionately.

An economy which is based on services such as Hospitality, Exports, and Tourism are not immune to such an environment of sudden decrease in business. It is therefore very essential that such businesses located in sensitive economies begin planning for their businesses with certain objectives:

1. How do you decrease the cost of distribution and sales of the service?
2. How do you provide a service that it generates a very positive word of mouth and results in repeat business?
3. How do you retain existing customers and offer regular value to them?

Now, if we look at the first question, we have two different components:

a)      How do we decrease costs and offer value?

b)      Provide quality service which has a lower cost of distribution or Sales

One must bear in mind that a small sized economy (population, demographics etc.), comes with its own set of challenges. The problem which such economies face is generation and circulation of money. This is primarily because of the economic activity undertaken in small economies are reliant on ‘ community business’ and therefore they face the problem of steady, regular customers. For such small businesses, a densely populated market becomes enticing; however the problem that such small businesses face is the competition in such densely populated locations, which results in increased cost of real estate/ outlet, higher cost of labour, facility, labour retention etc.

As the costs rise, so do the prices and therefore it has an impact on the customer base which most often decreases. It’s based on the economic principle of Demand and Supply, i.e. as the Price rises, the demand falls.

 

So back to the question, how can we reduce cost of sales?

Cost of Sales in the present environment can be a burden as there is a decreased flow of customer flow into the shop. The staffs need to be paid on an hourly basis and it just adds up on the cost. For. E.g. if a small business hires a retail staff at the bare minimum wage of 15$ and adds Super to it, the cost goes up to 17 dollars an hour. There are additional costs per hour, such as electricity, administration etc. so from a cost perspective let’s assume a business incurs a minimum cost of about 25$ per hour which includes all the outgoings. What it means is, the business needs to sell goods or services worth 25$ every hour to just break even, with no profits or losses.

What can your business do under the existing circumstances?

• Enable your Business with Tech tools.
• Enable your business to be present on the Web.
• Adopt leaner approach such as E-Commerce strategies to overcome costs of physical interface.

 

Also read: http://www.theage.com.au/opinion/political-news/employers-push-to-cut-pay-hours-20120409-1wl8s.html

 

 

 

Is China’s Growth flattening?

The best analogy I can think of explaining this major concern is if I was driving at 5^th gear and change gears to 4^th, does it mean I’m slowing down or am I gaining greater control over the car?

Chinese growth all these years has been fuelled by exports. It has seen double digit growth figures for many years now (1980’s onwards). It has transformed the rural architecture into modern bustling cities.  China with its centralized, socialist economy has been able to drive growth and development much faster than any of the industrialized nations during their period of transformation. China today is world’s 2^nd largest economy in less than 40 odd years, from being an ideal basket case.

What does it mean?

• Economic Growth in China has seen fluctuations in GDP growth at regular intervals.
• The Chinese economy tends to contract and then suddenly see rapid growth. It might have something to do with Military strategies of strategic withdrawal and Thrust forward after re-grouping.
• The Chinese economy tends to adapt to changing global economy.

What is China possibly thinking at this point of time?

• The Chinese Middle Class income group, those earning above 12,500$ p.a. is expected to constitute 40% of the total population by 2020. This percentage in absolute terms will exceed the combined population of EU, and be greater than the population of the United States.
• China’s urbanization rate was 47% in 2010 and is expected to be 55% by 2020.
• In 2005 a business enterprise needed to be in 66 cities to reach 80% of the middle class segment. By 2020, the same business enterprise needs to be present in 212 cities to engage 80% of the Middle Class population.
• Looking at these numbers, any Chinese policy maker will be thinking whether China needs to actually sustain growth by Exports? It can change its tactics and promote greater domestic consumption which would immunise itself from situations like GFC, Western interference and sanctions etc.

What does it mean?

1. My take on China is, it is slowing down for a strategic purpose and that is to develop an economy which will be self-reliant and grow as a result of domestic demand and be less reliant on exports.
2. There will be greater investments with in the economy, as more and more urbanization will occur. As a result, more and more people will rise above poverty levels and join the Middle Class segment.
3. China will create its own Europe within its boundaries. It will lead to greater income generation, investments and employment. What it finally plans to achieve is SELF RELIANCE.

How would it affect Chinese economy?

1. China will continue to remain a cost competitive manufacturing economy for years to come. It needs to ensure that people have sustainable employment and job security.
2.   It may not be very keen on making its currency RMB too strong but also too weak to attract American attention. Therefore it will look at developing alternative low cost export destinations in Africa, Middle East and parts of Asia where it has strong economic, diplomatic and military relations.
3.  It may take a much tougher stand on economic and bilateral relations with the United States and some European nations.
4. China will still have a huge population which will be living below poverty lines and therefore this domestic growth, immune from external environment will provide time and resources to lift these under privileged to middle class income groups. In essence, Chinese growth will be there for all to see for next 70-100 years. It is for this reason, it is called the Asian century.

China and China dependent countries:

1. China will re-orient itself to give more business to nations which it sees as allies.
2. It will create its own Resource and Mineral Supply Chain in Africa, Mongolia and CIS by having politically neutral, investments which will be based on policies of Non-Interference and Political and Economic support in International forums.
3. It is most likely to position itself as a ‘POOR MAN’S’ Banker and would develop many of the economies on fringe as its customers. A Low cost economy serving low cost economies- makes perfect sense!

TOP 10 trading partners of China

Trading partners in 2007

Trading partners in 2010

China’s Imports:

In 2010, China’s total imports were 922 Billion U.S. Dollars, down from 1.13 Trillion U.S. Dollars in 2008. The main imports included Electrical components & Machinery, Oil and Mineral fuels, Optical and Medical equipment’s, Metal Ores, Plastics and Organic chemicals. In 2010, the TOP 5 import partners included Japan (13.3%), South Korea (9.9%), USA (7.2%), and Germany (4.9%).

China’s Portfolio of TOP IMPORTS, 2010 (U.S. $ Billion)

Portfolio of Top Imports in 2007

Pattern of Portfolio of Imports in China- 1980- 2007

China’s TOP IMPORT SUPPLIERS

What does the above Table Reflect?

• Iron and Steel demand are on a decline. 2010 change over 2009 figures is -6.1%).
• There has been a massive increase in demand for Vehicles (excluding Rail) and the change over 2009 has been 74.5%. The other massive increases in demand have occurred for Ores, Slag and Ash +54.9%, Mineral fuel and Oil + 52.1%, Copper and articles thereof +55.8%.
• What it means is Chinese economy will still have huge import demands, however, the portfolio of demand will change. It may be more focused towards Heavy Engineering Electrical Machinery and Equipment, Power Generation equipment, Vehicles (Aircrafts, Heavy duty trucks, Cars etc.)
• What the above stats also reflect is slowdown in construction industry indicated by decline of 6.1% in demand for Iron and Steel.
• Countries like Mongolia have replaced countries like Australia as the largest exporters of Coking Coal. China’s imports from Australia in 2011 were 21% of its total Coking Coal imports, down from 37% in the previous year. Mongolia on the other hand increased its exports to China to 43% up from 32% a year ago. The resource market vacuum in China will increasingly be filled by nations in Africa, Mongolia and Asia.

Conclusion:

• China will continue to grow at rates above 8% for this financial year.
• China’s demand for certain portfolio of resources will decrease, and it will be indicative of sector wise slow down (for e.g. slowdown in Construction industry). It however, does not mean that whole of the economy will flatten.
• China will increasingly engage with nations which respect Chinese Civil and Military institutions, People and Culture.

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1. [1] http://www.mckinseyquarterly.com/The_value_of_Chinas_emerging_middle_class_1798
2. [1] http://shanghaiist.com/2012/02/10/report_chinese_middle_class_to_reac.php
3. [1] http://shanghaiist.com/2012/02/10/report_chinese_middle_class_to_reac.php
4. [1] http://shanghaiist.com/2012/02/10/report_chinese_middle_class_to_reac.php
5. [1] http://www.starmass.com/china_review/imports_exports/china_top_trade_partners.htm
6. [1] http://english.mofcom.gov.cn/aarticle/statistic/ie/200901/20090105999698.html
7. [1] http://www.economywatch.com/world_economy/china/export-import.html
8. [1] https://www.uschina.org/statistics/tradetable.html
9. [1] http://www.starmass.com/china_review/imports_exports/imports_by_commodities.htm
10. [1] http://www.starmass.com/china_review/imports_exports/imports_by_commodities.htm
11. [1] https://www.uschina.org/statistics/tradetable.html
12. [1] http://seekingalpha.com/instablog/134986-john-polomny/231698-mongolia-replaces-australia-as-largest-met-coal-exporter-to-china

Freedom to Express on Social Media?

Freedom to Express is a fundamental right we enjoy in democracies such as ours. Our Rights as a citizen to not only practice what we believe in but also express those beliefs to the world define us as citizens of the Free world.

Increasingly Governments in a few open democracies are considering ways to constrain this basic right to express. The question that rises to my mind is why?

There are several instances where people have grossly misused the very purpose of Social Media. Social Media as the term suggests is for building social relationships. It is for fostering friendships, relationships and bonds. While many entities do just that by making friends with people who have long been displaced by vagaries of time and have now found themselves across national boundaries, a few have used Social Media to sensationalize. There is nothing wrong about it as long as it serves a purpose which develops social and cultural objectives, but the problem comes in when people use it for purposes other than that; To spread hateful, xenophobic messages which causes social unrest; to spread messages of intolerance against people who have their own cultural values, beliefs and values; to spread malicious and hurtful words against people such as Homosexuals and lesbians. This is not the purpose of social media to begin with.

I believe that people have a right to live their lives the way they want to. They have a right to engage with people with whom they wish to. They have a right to practice religion and faith they believe in. It is not upto the majority to suggest what others should do or for that matter shouldn’t do.

Many countries like India, Japan are very conservative in their social value systems. These values are embedded in people from the time of their birth. They are made to conform a certain way of life and that is the social fabric of such societies. Social Media such as Facebook are new entrants into such cultural systems which haven’t been readily accepted by such conservative societies as a way of ‘expression’.

In India Government has taken up the issue of “social concern” with the Social Media sites such as Facebook. The Government wants such social media to remove, delete and moderate postings which are culturally insensitive, racist, casteist, xenophobic, sexist. Such Governments do not want Social Media to become outlets for innuendo and hate. Many such Governments expect such social media organizations to act responsibly and act in a way which would reflect ‘sensitivity’ and empathy. There is nothing wrong to expect such civilized behaviour especially when increasingly people are using Social Media outlets to research and form opinions.

I think just like the traditional media outlets, Social Media outlets need to have a constitution of what type of information will be available through them. They need to define in clear terms what it means by Social Media. They need to define, what is acceptable and what is not.

For this there should be:

• A Charter defining the purpose of Social Media.
• A Set of Rules and Regulations which define in absolutely unambiguous terms as to what is acceptable and what is not and most critically, what is liable to be prosecuted e by the Social Media in a Court of Law.
• There should be a process to identify and ban such ‘unsocial’ entities from Social Media sites.

A Good Read:

http://online.wsj.com/article/SB10001424052702304450004577278682215630396.html

The Ancient SILK Route- Is it Re-Emerging?

Extending over 4000 Miles (6,500Kms) the SILK Route connected Afro-Eurasian landmass with East and West Asia. It was a route which resulted in trade and commerce between the Romans, Persians, Indians, Egyptians and the Chinese. The route adopted included Land and the Sea.  The Romans exported  Gold, Silver, Wine, Glassware, while the Chinese exported Tea, Silk, Porcelain, India traded in Spices, Precious stones, Ivory, Religion and Pepper. It is believed that it started around the Han dynasty (206BC- 220 AD). Cultures, Trade and Commerce boomed along the Silk route.

Silk route died a long way back, but it has been carried forward by ‘Civilizations’. Many of the nations which participated in the Silk route exist to this day and they do understand the significance of the Trade and Commerce which existed in those days and how it brought prosperity. China, India, Persia ( Modern Day Iran), Egypt, Mediterranean nations like Libya, Lebanon , and European nations like Italy and France have long established credentials of trade and commerce. The new players in this equation are the United States and Western Europe. United States is viewed by many such Asian nations as a replacement of the Ancient Rome which was powerful militarily and economically.

It is therefore but inevitable that various fragments will merge to form a huge trading block which will expand from Asia- Africa- North America. I therefore believe that U.S. posturing in Asia is finding a place for itself than to be a threat. It is in the interest of the United States that it engages with nations like China, India economically and not militarily.

Asian nations do not have a history of waging wars since the end of World War. Many of the nations in this part of the world are Passive, ‘Soft powers’ who are interested in protecting their Trade interests and in pursuit of this, they do use diplomacy, free trade and market access as the new weapons.

China and India have huge, well trained Armed forces, just as any of the nations in the West. They are disciplined and well equipped to manage any internal and external threats. However, China and India have both used their Armed forces for posturing rather than wars and aggression. India has been one of the largest contributors to the United Nations Peace Keeping Forces and they still man borders between Israel and Syria. They are among the largest contributors in Afghanistan and were actively involved in Egypt’s elections after the fall of President Hosni Mubarak.

In the next decade, I see a trend where there will be greater U.S. participation in Asia. Asia will be the new Europe replacing the financial and business hubs of less significant European nations. Beijing, Kuala Lumpur, Jakarta, Singapore, Mumbai, Bangalore would be the new London, Paris, Geneva, Bonn.

The increased engagement of China with United States is better for the world as a whole. U.S.- China trade creates for other nations to engage in trade in a cohesive manner and therefore it results in prosperity and less of wars. I think the United States has a much more mature understanding of Asia as a destination for Trade and Commerce now than what it had Five years ago.

Top Trading partners of China: In Billion$ 2010

• U.S. is the largest engagement partner of China.
• The other significant partners include Japan, South Korea, Germany, Brazil and India.
• What’s the point? All other nations too are Good friends of the U.S.
• What do I see? I see a pattern which connects U.S. with Asian economies ( Developed economies such as Japan, Korea, Taiwan) and the developing economies such as India and Malaysia)

Highlights of Indo-U.S. Trade:

• The two way trade between India and U.S. is expected to grow to 50 Billion Dollars. U.S. exports to India are up by 17.5% and will surpass 20 Billion Dollars Target mark ( U.S. Dept of Commerce India Mission http://trade.gov/indiamission2011/).

• Advanced Technology including in Aerospace, specialized materials, ICT, Electronics and flexible manufacturing systems have been the backbone of this growth.

• Find more information at http://www.ustr.gov/countries-regions/south-central-asia/india

• India is emerging to be the Third largest Financial investor in the U.S. with investments over 7 billion Dollars growing at 60% annually.

• According to a report released by India-US World Affairs Institute and the University of Maryland in partnership with Federation of Indian Chamber of Commerce and Industry (FICCI), “India is the third-fastest-growing-foreign-investor in the US, with Indians having invested $4.5 billion in the US in 2008 and their investments grew by an estimated 60% in 2009.”( http://www.financialexpress.com/news/indian-investments-to-us-grow-60-cross-7-billion/634244/)

• The joint study has found 372 acquisitions by Indian companies in the US between 2004 and 2009 worth $21 billion. This has created an estimated 40,000 employments in the US.

What it means?

• A rising India is focussing on strong and friendly economies such as U.S., The Netherlands and Singapore to invest.
• India looks at engaging with the U.S. at all levels; The Civilian Nuclear deal between the two nations will grow this trade between the two countries exponentially.
• India and U.S. are partners who are looking at not only economic development but also long term engagement which will bring some warmth to the chill prevailing during the Cold War era.
• As U.S. is creating jobs in India, India too is engaged in creating jobs and prosperity in the U.S. This will not only lead to economic relations but also among People to People- that is the true essence of Trade.

Basics of Economics of Trade in Asia

Soon after WW-2 many of the Asian nations gained their independence as their colonial masters could no longer sustain their Military and Economic presence in this region. Countries such as India became an independent nation in 1947 and a Republic in 1951, Indonesia in 1949 from Holland (though Indonesia declared it in 1945), Vietnam declared its independence in 1945 from France, Malaysia in 1957, from Britain, Asian nations came to confront some very serious Socio- Economic- Political challenges such as Wars, Civil unrest, Illiteracy, Poverty and most critically Empty Treasury.

1950’s to late 80’s were a period of great flux and uncertainty in Asia as not only poverty and lack of development faced these countries But also wars came to their door step. Vietnam War was one of the most notable during this time period which upset the regional economic growth and development for considerable years into the future.

Implications on Post-Independence economies:

• Wars and Civil unrest have severely handicapped the financial resources of many of the nations. They have resulted in Militarization and very high and unrealistic Defence budgets. This has resulted in shaving off money from other essential requirements of the economy such as infrastructure, education, health care, agriculture and manufacturing.

• Political instability, Military coups and Dictatorships: Asian nations have till late been witnessing lack of Political structure in their economies. It has resulted in weakening of public structure and institutions, increased consolidation of power and fragmentation of social fabric. Impact of General Zia-Ul-Haq in Pakistan created Taliban in Afghanistan to fight the Soviets and its impact lasts to this date; Cold War resulted in Vietnam War, and increased polarization of the Asian continent between Democracy and Socialism i.e. USA- USSR- China.

• Poverty, Lack of Capacity and Capability development: Asian economies suffered post-independence not only due to what the colonial powers left them with but also what happened subsequently in these nations. As a result of power consolidation among a few, lack of democracy, Poverty, illiteracy and lack of infrastructure became a stark reality. This led to further complexities in the economy in form of corruption, black money and civil unrest.

Process of Transformation

• Post war economic development in Asia began with Japan. Japan adopted a very systematic path towards economic growth and development. From an Agro economy they went on to adopt Manufacturing and from their migrated to Knowledge based economy. The same route was adopted by South Korea, Taiwan and likes.

• China in 1971, after the visits of Henry Kissinger and Richard Nixon, started with trade and diplomatic relations with the USA. They began by setting up manufacturing bases in coastal areas of Eastern China by offering Tax benefits and tax concessions. As a result, over the years, many of the European economies too migrated their manufacturing facilities to China. What is often unsaid is many of the big manufacturers were Americans they just took away their business from costlier Europe to Cheaper China.  Europeans to stay competitive adopted the same route. What it meant was, China was offering “DEALS” to foreign businesses to set up facilities so that it would result in investments, skills development and employment. American largesse in China probably was the shrewd thinking of Henry Kissinger to find an ally against Vietnam.

• China by virtue of its strict and tough Central, State and Commune level governance could maintain discipline and work culture in their factories. This was an impossible task in democracies such as India where Trade Unions, Political themes played a far greater role than they should have. While China focused on Industrialization, India focused on democratization with its own experiments with Industrialization.  While China had its own benefits in form of rapid growth, India on the other hand was slow with focus on education and building a capacity, still searching for its own Niche.

• While China started its process of economic liberalization, India was still in a state of uncertainty. It was only in 1991, when India was left with just 3 months of Foreign Exchange to pay its bills that a shock hit India’s policy makers who realised it could go no further.  India started to open up as an economy inviting foreign direct investments which was very well received in Japan and Korea but did not create much enthusiasm among countries which mattered- The USA and Europe.  Some of the early Japanese investments were Suzuki which collaborated with State owned enterprise to form Maruti-Suzuki one of the biggest now in India manufacturing small cars. This was followed by other manufacturers like Toyota, Daewoo, and Hyundai. India was gaining a perspective- an Engineering perspective with niche capabilities in Small cars tailor made for Indian roads. India had its own indigenous Car industry. Ambassadors and Fiat were the two cars available in the local market but as Henry Ford once said one can have a car as long as they are Black and in India White. Therefore the investments by the Japanese and the Koreans complemented the existing manufacturers with better technology and innovation.

• Y2K presented another great opportunity for Indian industry- I.T. : The change of I.T. systems dating format from 1999 to year 2000 ( 99>>00) was a major boost for Indian I.T. as companies like Infosys, Wipro , TCS established their brand names across North America and Europe. Indian Industry had finally found its niche and this was going to be the driving force of Knowledge based Indian economy into the future.

•  Japan and U.S are among the largest investors in China and India. It is therefore inevitable that Japan and U.S.A would expand their business interests across the world using China and India as the base. As a result there would be an exponential growth among these 4 economies. India and China also offer very robust domestic economies to Japan and U.S. Japan is technically in a state of deflation and therefore strong overseas domestic economies like India and China help them keep their financial system breathing. U.S. now finds that China and India combined together offer market potential bigger than Europe which for the last few years is seeing a downward trend.

Largest Trading partners of China

China_ Trading partners

Ref: http://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_the_People’s_Republic_of_China, 2009 figures

India’s largest trading partners

Largest Trading partners- India

Ref: http://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_India

Economic shift in the Post-Colonial World

As global economy faces a downward trend with Recession becoming a major challenge in many of the European economies, many nations are looking for investments from emerging economies of Asia.

International Monetary Fund (IMF) ranks the TOP 10 largest economies by Gross Domestic Product (GDP) in Purchasing Power Parity (PPP) terms in the year 2010 and forecasts changes in economic size by 2020.

Key Points:

1. China will displace USA as the largest economy by 2020.
2. India will displace Japan to be the Third largest economy by 2020.
3. Russia will displace Germany to be the Fifth largest economy.
4. TOP 5 Economies by 2020 will be China, USA, India, Japan & Russia.
5. By 2020, 3 of the Top 5 largest economies in the world, China, India and Japan will be in Asia.

By 2020, the share of emerging economies in the Worlds GDP will dramatically change as China (20%) will emerge as the largest individual contributor followed by USA (16%) and India (7%).

Economic implications of this change would be felt across a wide range of industries.

• China (20%) + India (7%) + Japan (5%) will have a World GDP share of 32%, i.e.BY 2020 1/3^rd of the World’s GDP will be in Asia.

 

• If we include USA(16%)  in this equation, then 48% of the World’s GDP will be concentrated in 4 countries- China, USA, India &  Japan

Economic implications of this shift[i]

1. Demand for Consumer Goods will increase: With a huge population base and rising household incomes, demand for consumer goods and services will rise in this region. The total population of BRIC (Brazil, Russia, India and China) economies in 2010 was 2,856 Million compared to 737 Million in the G-7 (USA, UK, France, Germany, Italy, Canada & Japan), Group of Seven DEVELOPED Nations.

2. Luxury Goods will be in demand. For e.g. in China the Disposable Income (above 10,000 US$) will quadruple from 57.1 Million US $(2010) to 222 Million US $ (2020).

3. Foreign Direct investment will flow towards such countries, as they will offer a large, educated and younger population base.

4. Economies like China and India will also emerge as major Foreign Investors. These two countries are already among the top investors in Africa.

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[i] http://blog.euromonitor.com/2010/07/special-report-top-10-largest-economies-in-2020.html