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In the post-war world, Japan, South Korea, and Hong Kong emerged as the first of the so-called "Asian Tiger" markets that, through manufacturing and global trade, transformed the Pacific Rim into an economic force to rival the Americas and the European Community.
"Old Asia," as one expert called it during a plenary discussion titled "Opportunities and Challenges for the next generation of Asian Companies," remains the safe haven for foreign investment following the regional economic crisis, from which the once seemingly invincible Japan, among many other countries, is still attempting to recover.
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| If you're willing to do a start-up business in India or China, it will certainly give you the rewards as long as you are willing to take the risks. | |
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| —S. Ramadorai, of Tata Consultancy Services |
However, waiting in the wings like understudies to a star performer, according to conference panelists, are the two countries that make up New Asia. With a combined population base that comprises more than a third of the planet's, China and India, they suggested, may surpass Old Asia to become the 800-pound gorillas of a new Far East economy.
But which country will emerge first, China or India? And will the victor get ahead through old-economy manufacturing, or new-economy business styles?
According to a consensus of the panelists, who represented U.S.- and Asia-based consulting, banking, finance, and Internet firms, much depends upon a business—and investment-friendly regulatory environment. Much also depends, they said, on improved literacy among the rural populations of India and China.
India steps up
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The ability to find an opportunity, and exploit it, is at the basis of India's economic future, she said, adding that old technology companies using the techniques of new technology firms will become more competitive, and more receptive to customer needs.
China and Beyond
Daniel Mao, chief operating officer of SINA.com, an Internet company that serves Chinese communities worldwide, suggested that "convergence and consolidation" will be the buzzwords in the new century, driving a union between the old and new. As an illustration, Mao noted the evolution of the term "IC." Once shorthand in Silicon Valley for "integrated circuits" — or chips — it evolved to mean "Internet and communication" in the '90s, and "India and China" in the new century, Mao said.
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"The 'good news/bad news' is that the turbulence is not over for Asia," commented Mark Daniell, managing director of Bain & Company SE Asia Inc. Indeed, since the so-called Asian Flu plunged the Far East into recession, many investors are returning to Japan and Korea, and ignoring the "sexier" new growth economies.
On the "China or India?" question, Daniell said he believes both would have a similar impact on the region's economy, though China would prevail, with India bringing up the rear.
Why would China be first? Although no one panelist suggested a specific cause-effect reason, much of the focus lingered on the topic of literacy: According to statistics from the U.S. State Department, India's literacy rate is only 54 percent, compared with 82 percent in China.
Onward
Such social and economic drawbacks, according to S. Ramadorai, CEO of Tata Consultancy Services in India, a software and services company, prevent dissemination of the Internet in his country. However, national initiatives, he said, aim to install Internet service in all schools and hospitals by 2003, and to allow near-universal access to India's residents by 2008.
"We should ask ourselves what can we do together, how we can create value together, and [how we can] disseminate that in the shortest amount of time," Ramadorai said at HBS. "That is what the Internet is enabling, that is what convergence is enabling, that is what connectivity is enabling."
Ramadorai predicted that India's growth in the new economy sector would be "phenomenal" compared with China's, based in large measure on what he perceives to be Indians' ability to adapt easily to an English language-based mode of communication.
Mao, meanwhile, told the HBS audience that he envisioned China's future as building upon current trade linkages with India, the United States, Taiwan, and Hong Kong. By nurturing the cultural seeds of expatriate Chinese, including those in North America, Mao predicted a growth of management know-how that could be put to work on the Mainland.
ICICI's Gupte was equally encouraging of entrepreneurship in India. However, she did not sugarcoat her view that India is a labyrinth of competing bureaucracies and regulatory schemes, as well as home to an entrenched underground of bribery and corruption. The information technology sector is surprisingly free of such corruption, she noted, due to that sector's competitiveness and the apparent inability of politicians to conceive of ways to make money from software developers, code writers, and debuggers.
"If you're willing to do a start-up business in India or China, it will certainly give you the rewards as long as you are willing to take the risks," said Ramadorai. "At the end of the day, there are plenty of problems to be solved, and that is what challenge is all about."
Daniell, who has analyzed the Southeast Asian market for 17 of his 20 years at Bain, was prepared to take Ramadorai's advice one step further by suggesting a world of no limits and vast horizons.
"There is opportunity everywhere—in small, difficult economies and in large, scalable economies. There are opportunities in cyberspaces that cross borders and ignore the old boundaries of business," he said.
"Go where you want to go, do what you want to do," Daniell told the HBS audience. "You will find opportunities in lots of different places in lots of different ways. And in doing something unique, you will find something that is much more satisfying."
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