Since Thomas Friedman penned his oft-quoted tome “The World Is Flat,” more and more heads are bobbing in agreement that the fate of United States economics lies in actions far broader than what goes on between its own borders. When it comes to the success of the United States economy, Dorothy said it best: “We aren’t in Kansas anymore…”
In recognition and deference to this mindset, Wake Forest University’s Babcock School of Management offers, and in some cases requires, an international study trip for a cultural, economic and socio-political immersion in the global landscape. In May of this year, one such trip, lead by Babcock’s dean, Dr. Ajay Patel, took 14 students on the MBA track to India, a rising superstar on the world stage.
The business school offers several international study trips to such places as China, Japan, Latin America and Central Europe. But when Patel came on board as dean in April of 2004, the absence of India, an emerging economic powerhouse and destination for much American business and IT outsourcing, was glaring.
Patel was raised in Kolkata (formerly Calcutta) India and, after graduating from St. Joseph’s College in Bangalore, he came to the United States to pursue business and an MBA degree. Since that time, he has served as a professor, assistant dean and interim dean, has done heavyweight consulting for major corporations, has been a prolific researcher and has received every award possible from the Babcock School, including winning its Educator of the Year award seven times.
Put simply, Dr. Patel knows his stuff. And everybody knows he knows his stuff. So adding the trip to India didn’t take a lot of convincing. After all, with a population of 1.3 billion and growing, what has been coined as the “world’s largest free market democracy” is a pretty happening place. And, despite the latest swooning over IT and call center outsourcing, India was also the recipient of approximately $8 billion dollars in U.S. exports, doubling its export figures from 2002.
The Other Side of the Rupee
Charlotte Croswell, head of NASDAQ International, said in a 2005 speech in New Delhi, “Companies from economies like India are on the investment radar of investors worldwide chasing new growth opportunities. In terms of market capitalization, India now stands at about $510 billion.”
While there is a lot of understandable resentment out there in terms of people who have lost or stand to lose jobs due to outsourcing of, say, manufacturing or IT services, the news isn’t all bad. First, by formulating a cooperative arrangement with emerging economies like India’s, U.S. businesses can better identify its strengths and opportunities and leverage its entrepreneurial mindset and creativity. Plus, as India grows, so does its ability to purchase, and as a result there is a rising middle class in India ripe for plucking.
Comments Dean Patel, “Forty-five to 48 percent of India’s population is under 20 years old. That is a huge labor force coming down the road. We are talking about 550 million people creating a powerful consumer market, as well as an enormous base of human talent.” In other words, there is more than one side to any story and what Patel hoped to do was present the most complete version for his students to digest.
“Overall, what we wanted to be able to do with this trip was get a sense of the role of India’s transitional economy in terms of how it shapes global competition; witness the socio- political dilemmas of a large and diverse culture; and begin to understand the cultural, economic, political and legal constraints of a developing market. We wanted to be able to see the broader picture, the opportunities as well as the challenges,” says Patel.
These objectives considered, it was challenging to formulate a trip package that would give maximum impact for 12 days on the ground. Patel outlined an agenda that would include a look into large corporations, medium-sized businesses and family-owned operations.
The first component of the trip was to Mumbai (formerly Bombay), which is the financial capital of India. Patel compares Mumbai most closely to New York. Mumbai hosts the Bombay Stock Exchange, the Reserve Bank of India and multinational consulting powerhouse the Tata Group. Student Andy Patel (no relation to Ajay Patel) describes this section of the journey as “very metropolitan, and very service oriented. There are high rises everywhere. It is here that we saw a real emergence of the new upper middle class.”
Another student, Ryan Atienza, characterizes the old Bombay as having “incredibly interesting demographics. You can see the filthy rich and the dirt poor, walking down avenues of some of the most expensive real estate in the world.” But Atienza, too, testifies to discerning a shift in these extremes, “You can definitely see that the boom economy is altering the classes.”
After Mumbai, the students encountered Delhi, India’s political center and home of Apollo Hospital. A prime example of medical tourism, Apollo is a case study in one of the country’s fastest growing industries. The wards and operating rooms of this hospital have been filled with patients seeking to avoid the waiting lists and sub-par equipment and facilities of countries with government subsidized health care programs such as Great Britain and Canada. However, recently, more and more Americans are packing their suitcases and heading to India for treatment, parallel to that they receive in the United States, for pennies on the dollar.
Offers student and healthcare-IT consultant Andy Patel: “Organizations like Apollo offer a real wake-up call. A $1,500 hospital stay in the United States might cost $50-75 at Apollo. Yet they offer real-time, high-quality care with state–of-the-art equipment.”
Concurs Ryan Atienza, who sells surgical ophthalmology equipment for BD Medical, “A cataract surgery at Apollo costs between $20-30. To get that same operation in the United States will cost the patient $2,000-3,000.”
Since both Patel and Atienza have significant experience in the medical industry, they have their own questions about just how hospitals can offer such a huge cost savings, provide a high standard of care and stay in business. Comments Atienza, “It is certainly not by cutting corners, I can tell you that up front. The doctors are highly educated and the equipment is top-of-the line.”
Says Andy Patel, “I was very impressed with their operations processes. They were very efficient in terms of delivery and supply. They house patients with similar conditions in the same area of the hospital, and their specialists are centralized, rather than having admitting rights to several different sites.”
He continues, “And it seems pretty logical to me that, as yet, they don’t have as many cooks in the kitchen when it comes to administration. Services are billed from provider to patient, rather than being routed through several different organizations like commercial health care structures. Finally, India is not a litigious environment, relatively speaking. Without having to deal with medical malpractice lawsuits and insurance – that takes away a major cost.”
Ajay Patel suggests that in India the doctors are willing to get paid a little less and the facilities cost less, but agrees heartily that absence of legal and insurance issues is certainly an important part of their successful formula. So far.
Patel concedes that it is very early in the game to stop keeping score. Apollo and hospitals like it are actively promoting their benefits, and as demand increases, so will costs. As more litigious tourists visit, one might assume that there will be come trickle down effects there as well. “This is a conundrum that a lot of developing economies see in many different ways – avoiding the same pitfalls that made you the better alternative to begin with,” says Patel.
Having the Will, Finding a Way
Both Atienza and Andy Patel claimed that their visit to Saathi, a nonprofit organization formulated to help runaways and orphans who find themselves in the streets of Mumbai, offered the greatest impact. Many of Saathi’s beneficiaries are kids seeking fame and fortune, or just a way out of where they came from. Not unlike the seedier transit stations in the United States, the Mumbai train stations are fraught with unsavory characters such as drug dealers and pimps looking to exploit wayward kids.
“The kids were between the ages of eight and18 years old,” shares Andy Patel. “They were shy, but seemed in pretty good spirits. It was enlightening to see how hard these kids had it, and to see them talking about cricket and getting an education.”
Atienza says he is grateful that Wake included this stop on his visit. “I went over with an understanding that I would be seeing the shiny buildings and multinational corporations in Mumbai, but the truth is 60-65 percent of the population lives in poverty. Wake did a great job of taking us into the culture, rather than having us sitting on the sidelines thinking we knew what was going on.”
Ajay Patel says that on the bus returning from a site visit a student was flabbergasted at young children circling the grad students and hawking small wares. “In essence, these are 10- and 11-year-old entrepreneurs. They have a hunger for a better life and the will to do what it takes to get it. It was great to hear that grad student say, ‘People shouldn’t have to wait to get this lesson in graduate school – we should be taking high school kids here so they can really get it.’”
There are 20-25 different languages in India, so most educated people speak English as a second language. And there is a notable emphasis on education. Says Andy Patel, “One of my takeaways was that as a whole, India is very socially conscious. Private industry funds a lot of educational needs, and industry provides rural expertise to develop more rural areas.”
These factors, combined with the hunger for growth, a growing sense of national pride, and a marketplace that is reportedly well regulated, are colluding to produce some considerable talent.
If we want to compete with that talent, says Ajay Patel, “We need to focus on improving our K-12 educational system and bring a spirit of cooperation to the global marketplace. There is also a lot of room for collaboration in terms of small and family-owned businesses between the two countries.”
“It’s unfortunately true that some industries are leaving the United States for good. But there are also a lot of opportunities in the global marketplace if you are looking for them. By taking trips like these, we open the door to cooperation and inspiration,” summarizes Patel.
Ajay Patel says that with American enterprise and intellectual property strengths, the fields are very fertile on the global horizon for new and productive ventures. The question remains: Will we choose to reap from them?