New York Times Columnist Thomas Friedman took the economic horizon by storm with his book ‘The World is Flat,’ in 2005.
His claim that the world has ceased to be a multi-dimensional tool and that change was inevitable and coming fast has gathered momentum.
Events since the dawn of the new Millennium including bombing of the World Trade Centre in New York and the Pentagon in Washington, attack on Iraq, rise of Al Qaeda and other terrorist groups have taken their toll.
If nations have to stay ahead, they should embrace the ever-changing landscape of globalisation and the economic impact that follows.
It was interesting to read the impact of globalisation and how scores of Generation X were taking up the American way of life, thus creating a single global market with no boundaries to limit growth.
However, the financial crash of 2006-2007 brought this dream of perpetual growth engine crashing down and every country scampered to hold on to its own economic resources and growth.
So what has changed? Did the unifying cultural revolution suddenly stop? Are there lessons to be learnt?
The world woke up to the reality that culturally we are a diverse set of people and that there is far more to learn and understand than what we claim to know when we talk of business. The importance of culture and cultural exchanges in fostering better economic growth and increasing the bonding between two countries have been topics of research for the past many years.
Culture, history and way of life often form the underlying economic stability of any nation and when you understand the meaning of these cultural significances, it would be easier to translate them into economic impact.
Scottish moral philosopher Adam Smith viewed his ‘Theory of Moral Sentiments’ as an integral part of the ‘Wealth of Nations’ but revolutionary socialist (of erstwhile Prussia) Karl Marx had the opposite view! German Sociologist and political economist Karl Emil Maximilian Max Weber claimed that religion was important to establishments of markets, but Hungarian-American economic historian Karl Polanyi amended it, stating that religion and culture are factors in moderation. He believed that inclusion of non-economic factors was important and vital for growth.
Why is it that some countries or cultures thrive in adverse circumstances, while others fail to do so? An example of this is the growth of Chinese in Philippines, Indonesia or even as far as Mauritius. The same is true of Indians in Europe or America or Jews in Russia (post the fall of Berlin Wall), Brussels or US!
Financial success of these groups can also lead to violent retaliation as seen in island nations of Fiji, Mauritius or Zimbabwe.
Take the recent example of the Islamic State of Iraq and Syria (ISIS) which has wiped out culturally significant ruins of Bamiyan (Afghanistan), Syria, continues to threaten that it would spread terrorist attacks.
An interesting observation was made by California University Economics Professor Gregory Clark in his recent work, ‘Farewell to Alms,’ citing the example of Industrial Revolution (1760 to 1820) and its impact on Britain and India.
Post the Magna Carta and the cultural revolutions in the European Continent, the advent of Industrial Revolution had its biggest impact on Britain as it was able to extract the best out of the situation through its steam engines, powered looms and empowered the middle class people to further solidify their base.
But the same revolution did not have an equally telling impact in India, where the power looms were introduced in place of handlooms. The cost of production was a third of the cost in Manchester; yet the cost was escalating in India to foster growth and maximise output. It threw more labour towards manufacturing, negating the cost savings and making them unviable in the long run.
Understanding the need for global change is important; of equal significance is transfer of value, trust, morality and cultural significance of actions to achieve business growth.
Relations built on deeper understanding of the ‘Why’ of a culture bring the nations closer and foster better economic growth despite the misgivings about political impact. In the end, it is all about ‘What’ you bring to the table than ‘How’ you bring it.
I hope that New Zealand will ensure that this long neglected aspect of Culture is given its due importance in realising the potential of growth with an economic giant such as India.
Prashant Belwalkar is President, Migrant Heritage Charitable Trust Inc based in Auckland. A technocrat, his interests include Technology, Business, Performing Arts and Sports. His 27-year career has taken him to a number of national and international companies in India and New Zealand apart from the Department of Internal Affairs of the New Zealand government and New Zealand Trade & Enterprise. The above is an edited version of his article that appeared in ‘ITA Courier,’ a magazine of the Auckland based India Trade Alliance, reproduced with their permission.