08-11-2006, 05:25 AM
China is a non-event`
Prasad Sangameshwaran / Mumbai July 25, 2006
http://www.business-standard.com/general/s...p?&autono=99205
John Naisbitt
Heâs considered one of the worldâs greatest futurists. In 1982, John Naisbitt wrote Megatrends, which spent two years on The New York Times bestsellers list and was translated into 57 languages. Itâs still in print, as are Naisbittâs other bestsellers Reinventing the Corporation and Global Paradox.
The 77-year-old Naisbitt is a high school dropout who went on to study at Harvard and Cornell and at last count possessed 15 honorary doctorates. This is the man who accurately predicted several game-changing global trends long before world economies were thinking beyond the âFirst Worldâ â from the emergence of Asia as a world power, increasing globalisation and decentralisation, the sweeping spread of networking and the move from industrial to information societies.
But Naisbitt doesnât consider his prognostications the stuff of crystal ball gazing. âMuch of the future is hidden in the present. I always look at events from the point of view of the present,â he says.
In India to address the IBM Forum in Mumbai and Delhi, the former IBM employee who has also worked as a special appointee in the John F Kennedy administration and as special assistant to US President Lyndon Johnson spoke with Business Standard about his initiation as a futurist â he subscribed to over 100 newspapers to get behavioural insights of people across the US since he believes that newspapers are âthe first draft of historyâ (his recommendations: Financial Times, The Wall Street Journal, The Economist and The New York Times ). Excerpts:
Most businesses are constantly grappling with change. What is your view on todays changing business scenario?
Most things remain constant even when we see lots of change. People say the only thing constant in business is change. That is absolutely ridiculous. Most things do not change. But that does not make news. The only news that gets reported is change. If business develops a mindset only around change, itâs not going to be helpful.
Then shouldnât companies be present in businesses that experience little or no change?
Thatâs certainly a very solid strategy. One of the best businesses in the world is this (pulling a pencil out of his pocket). This has not changed despite many forms of writing instruments.
Procter & Gamble makes things that people will use forever. Nobody wants to be in the business of fads. Fads, by definition, go away.
Is the future bright for businesses across the world?
Well, I think so. The world is not only the Middle East, fortunately. At any given time, it seems that the world is going to pieces. But the fact of the matter is that the number of conflicts and their intensity have been going down for some time. Most of my adult life was in the Cold War.
We could have blown ourselves up any Tuesday morning and so many of us have forgotten how scary it was to realise that we could have had a nuclear war, mutual annihilation and all that. In that regard, things have already got brighter.
The other uplifting thing is the globalisation process. What is more interesting for me is that the individual is so important in this process. When we read about big companies, the fastest-growing segments of the global economy are the individual global entrepreneurs.
They have their own product or service idea and they sell it to the world using DHL or FedEx as their distribution systems. Itâs extraordinary how individuals can change the world.
I think itâs a very hopeful world, despite conflicts. The whole influence of the geopolitical system is receding as the global economic system gains priority.
Whatâs continuing to happen is that economic considerations are overwhelming political considerations. That process will not slow down. Part of that process will also calm down areas in the world where there are conflicts.
When things are bright, are there also any shades of grey for business?
For business there are only shades of grey. Itâs not a smooth ride. But thatâs a part of the adventure. Otherwise, it would be boring. One of the things I say is, âbe an opportunity seeker and not a problem solverâ.
Opportunity seekers are the ones who will change the world. They look for openings and possibilities. Problem-solvers necessarily deal with yesterday.
But canât problems become opportunities? For instance, the Indian IT opportunity boom was built on the back of the Y2K bug.
That was an opportunity. There was a crunch in manpower to fix the Y2K problem. Opportunity seekers find a way to do that. There was change. The 21st century was rushing towards us and it was almost there. The US, primarily, needed a lot of help. Indian entrepreneurs rushed in and this led to a great strategic position of moving forward to the most dynamic business sector in the world.
Oil companies are talking about a serious shift to alternate energy. Is the future in alternative energy?
Alternative energy is necessary. One of the mindsets that I quote in my forthcoming book Mind Set is, âthings we expect to happen, always happen more slowlyâ. Thatâs particularly true of technology.
Oil is going to last for a long time. We should have started earlier to search for alternative energy. The price of oil will come down, dramatically. This is Economics 101, demand and supply. As the price of oil touches $70-80, new producers will emerge and new finds will be announced. Pretty soon, the supply will be enough to drive the price down.
You had forecast that the Y2K âdisasterâ would be a non-event. What are the non-events that people are worried about at present?
I think, China. Two things about China are generating a lot of hype. One hype is that China is going to take over the world. Last December, China recast its GDP to almost $2 trillion. But the US GDP is moving up to $13 trillion and the US is not going to stop growing. In those terms, it will take 30-40 years for China to even catch up. Even in terms of standard of living, itâs quite another matter. So itâs a big hype that China is going to get you.
The other issue is the fear that China is going to break up (decentralise). The interesting news is, it is already breaking up. China is the most decentralising country in the world. Itâs an old Chinese idea that the periphery is the centre. Thatâs true of China now.
Even second-tier cities in China can get foreign investment directly. Beijing pretends to rule and the provinces pretend to be ruled. But that does not stop them from building airports and competing for FDI. Of course, Beijing is letting them do that and thatâs a great thing.
You have spoken about companies being in the centre of economic activity....
Investments are shifting from nation states to economic domains. The question is not whether China will beat India. The question is whether a Chinese company in that sector will beat an Indian company from the same sector.
The competition is between people and companies. Countries donât create economies. Entrepreneurs create economies. The governmentâs role is to create a nourishing environment for its companies, just like itâs a companyâs role to create a nourishing environment for its employees. Then, entrepreneurs will see openings and the opportunity seekers will create employment opportunities.
Business models are undergoing a change. What is the business model of the future?
All kinds of roles will work as an organic function of what companies are doing. Business models grow out of the circumstances in which they are functioning. The P&G model (marketing) is very interesting.
What it does is to draw on talent. In a way, pharma companies are also evolving. As their pipelines for new drugs are drying up, they acquire tiny innovative companies, because their in-house R&D teams are not producing enough innovation for this kind of growth. So it serves as a new model. You go where the talent is.
There have been comparisons between computer makers and automobile manufacturers. While computers have undergone a sea change in a short time, automobiles have relatively been low on innovation. What are your views?
In the beginning of the 20th century automobiles were a big thing. There were 2,700 automobile companies in the US. After a long shakeout, 99 per cent of them did not survive. At present, the US has only four companies. Just two of them are American companies. And even those two are in big trouble. I got a quote from Bill Ford for my book that says, âWe are going to really listen to customersâ. Imagine! Listening to customers after all these years. But thatâs a significant quote.
You have said that the future is embedded in the present. Then how did most companies, particularly those in consumer electronics (such as analogue camera manufacturers), fail to see the future, despite being ahead of the pack in their own domain?
Most of the present is going to be the past. Only some part will be the future. Thatâs the trick. To see which things are seeds of the future and what belongs to the past. Technology is special. It moves quicker and the judgements are much harsher. If you have a new technology it can wipe out the old, practically overnight.
The future is something that is with us now, but not seen. The trick is to see trends before the rest and anticipate their becoming more important.
Prasad Sangameshwaran / Mumbai July 25, 2006
http://www.business-standard.com/general/s...p?&autono=99205
John Naisbitt
Heâs considered one of the worldâs greatest futurists. In 1982, John Naisbitt wrote Megatrends, which spent two years on The New York Times bestsellers list and was translated into 57 languages. Itâs still in print, as are Naisbittâs other bestsellers Reinventing the Corporation and Global Paradox.
The 77-year-old Naisbitt is a high school dropout who went on to study at Harvard and Cornell and at last count possessed 15 honorary doctorates. This is the man who accurately predicted several game-changing global trends long before world economies were thinking beyond the âFirst Worldâ â from the emergence of Asia as a world power, increasing globalisation and decentralisation, the sweeping spread of networking and the move from industrial to information societies.
But Naisbitt doesnât consider his prognostications the stuff of crystal ball gazing. âMuch of the future is hidden in the present. I always look at events from the point of view of the present,â he says.
In India to address the IBM Forum in Mumbai and Delhi, the former IBM employee who has also worked as a special appointee in the John F Kennedy administration and as special assistant to US President Lyndon Johnson spoke with Business Standard about his initiation as a futurist â he subscribed to over 100 newspapers to get behavioural insights of people across the US since he believes that newspapers are âthe first draft of historyâ (his recommendations: Financial Times, The Wall Street Journal, The Economist and The New York Times ). Excerpts:
Most businesses are constantly grappling with change. What is your view on todays changing business scenario?
Most things remain constant even when we see lots of change. People say the only thing constant in business is change. That is absolutely ridiculous. Most things do not change. But that does not make news. The only news that gets reported is change. If business develops a mindset only around change, itâs not going to be helpful.
Then shouldnât companies be present in businesses that experience little or no change?
Thatâs certainly a very solid strategy. One of the best businesses in the world is this (pulling a pencil out of his pocket). This has not changed despite many forms of writing instruments.
Procter & Gamble makes things that people will use forever. Nobody wants to be in the business of fads. Fads, by definition, go away.
Is the future bright for businesses across the world?
Well, I think so. The world is not only the Middle East, fortunately. At any given time, it seems that the world is going to pieces. But the fact of the matter is that the number of conflicts and their intensity have been going down for some time. Most of my adult life was in the Cold War.
We could have blown ourselves up any Tuesday morning and so many of us have forgotten how scary it was to realise that we could have had a nuclear war, mutual annihilation and all that. In that regard, things have already got brighter.
The other uplifting thing is the globalisation process. What is more interesting for me is that the individual is so important in this process. When we read about big companies, the fastest-growing segments of the global economy are the individual global entrepreneurs.
They have their own product or service idea and they sell it to the world using DHL or FedEx as their distribution systems. Itâs extraordinary how individuals can change the world.
I think itâs a very hopeful world, despite conflicts. The whole influence of the geopolitical system is receding as the global economic system gains priority.
Whatâs continuing to happen is that economic considerations are overwhelming political considerations. That process will not slow down. Part of that process will also calm down areas in the world where there are conflicts.
When things are bright, are there also any shades of grey for business?
For business there are only shades of grey. Itâs not a smooth ride. But thatâs a part of the adventure. Otherwise, it would be boring. One of the things I say is, âbe an opportunity seeker and not a problem solverâ.
Opportunity seekers are the ones who will change the world. They look for openings and possibilities. Problem-solvers necessarily deal with yesterday.
But canât problems become opportunities? For instance, the Indian IT opportunity boom was built on the back of the Y2K bug.
That was an opportunity. There was a crunch in manpower to fix the Y2K problem. Opportunity seekers find a way to do that. There was change. The 21st century was rushing towards us and it was almost there. The US, primarily, needed a lot of help. Indian entrepreneurs rushed in and this led to a great strategic position of moving forward to the most dynamic business sector in the world.
Oil companies are talking about a serious shift to alternate energy. Is the future in alternative energy?
Alternative energy is necessary. One of the mindsets that I quote in my forthcoming book Mind Set is, âthings we expect to happen, always happen more slowlyâ. Thatâs particularly true of technology.
Oil is going to last for a long time. We should have started earlier to search for alternative energy. The price of oil will come down, dramatically. This is Economics 101, demand and supply. As the price of oil touches $70-80, new producers will emerge and new finds will be announced. Pretty soon, the supply will be enough to drive the price down.
You had forecast that the Y2K âdisasterâ would be a non-event. What are the non-events that people are worried about at present?
I think, China. Two things about China are generating a lot of hype. One hype is that China is going to take over the world. Last December, China recast its GDP to almost $2 trillion. But the US GDP is moving up to $13 trillion and the US is not going to stop growing. In those terms, it will take 30-40 years for China to even catch up. Even in terms of standard of living, itâs quite another matter. So itâs a big hype that China is going to get you.
The other issue is the fear that China is going to break up (decentralise). The interesting news is, it is already breaking up. China is the most decentralising country in the world. Itâs an old Chinese idea that the periphery is the centre. Thatâs true of China now.
Even second-tier cities in China can get foreign investment directly. Beijing pretends to rule and the provinces pretend to be ruled. But that does not stop them from building airports and competing for FDI. Of course, Beijing is letting them do that and thatâs a great thing.
You have spoken about companies being in the centre of economic activity....
Investments are shifting from nation states to economic domains. The question is not whether China will beat India. The question is whether a Chinese company in that sector will beat an Indian company from the same sector.
The competition is between people and companies. Countries donât create economies. Entrepreneurs create economies. The governmentâs role is to create a nourishing environment for its companies, just like itâs a companyâs role to create a nourishing environment for its employees. Then, entrepreneurs will see openings and the opportunity seekers will create employment opportunities.
Business models are undergoing a change. What is the business model of the future?
All kinds of roles will work as an organic function of what companies are doing. Business models grow out of the circumstances in which they are functioning. The P&G model (marketing) is very interesting.
What it does is to draw on talent. In a way, pharma companies are also evolving. As their pipelines for new drugs are drying up, they acquire tiny innovative companies, because their in-house R&D teams are not producing enough innovation for this kind of growth. So it serves as a new model. You go where the talent is.
There have been comparisons between computer makers and automobile manufacturers. While computers have undergone a sea change in a short time, automobiles have relatively been low on innovation. What are your views?
In the beginning of the 20th century automobiles were a big thing. There were 2,700 automobile companies in the US. After a long shakeout, 99 per cent of them did not survive. At present, the US has only four companies. Just two of them are American companies. And even those two are in big trouble. I got a quote from Bill Ford for my book that says, âWe are going to really listen to customersâ. Imagine! Listening to customers after all these years. But thatâs a significant quote.
You have said that the future is embedded in the present. Then how did most companies, particularly those in consumer electronics (such as analogue camera manufacturers), fail to see the future, despite being ahead of the pack in their own domain?
Most of the present is going to be the past. Only some part will be the future. Thatâs the trick. To see which things are seeds of the future and what belongs to the past. Technology is special. It moves quicker and the judgements are much harsher. If you have a new technology it can wipe out the old, practically overnight.
The future is something that is with us now, but not seen. The trick is to see trends before the rest and anticipate their becoming more important.