Inclusive Globalisation via Innovation(part-2)

Now, for the first time, we sea a possibility of change, on a scale sufficient to make an impact. Creating this new paradigm of global trade in India, and its lead export sector: IT software and services. This industry helps its customers to improve the quality, cut down time-cycles and reduce costs for their services/products. Increased efficiency is a net gain for the customer, even as the Indian company profits from the deal. Thus, this is truly a win-win situation of mutual benefit. A study by the Mc Kinsey Global Institute in the US quantified this in relation to India doing IT work for US companies. It found that for every dollar of outsourced work, there ' was return of $ 1.46. Of this, 67 Cents was a saving and return to the US, 45-47 cents was potentially gained by the US through re-deployment of workers, and 33 cents went to India. Thus, the overall global economy gained as did both sides-US and India -of the transaction. Moreover, separate studies showed a redeployment of workers, but not net job loss. What better way to create a win-win situation?

Amidst the strident debate on globalisation not enough attention has been paid to this potentially dramatic new development. Both sides are currently caught up with mind-sets and rhetoric of the past. Most globalisers take recourse to the theoretical constructs of the economics of comparative advantage, but are faced with the discordant evidence of the human cost of imperfect globalisation. Anti-globalisation forces find their “neo-colonial West” argument undercut by dying western manufacturing units, even as the economies of China and India power ahead. Clearly, something new and different is happening and it cannot be fitted into or understood through intellectual frameworks of the past.

Of course, much of the total global trade is in traditional items and has well-understood, conventional impact. What is new is the large sca1e, technologically-facilitated trade in knowledge-services. This goes beyond the traditional IT outsourcing of the Y2K type, when millions of lines of computer code were written in India to modify programmes so that the change of year 1999 to 2000 - did not result in mistakes and chaos. Today, this trade also involves R&D being done in India, computer-based architectural design, new drug discovery through in-silica modeling, studying the impact of using a new material for a car part or an aero-engine turbine blade, equity analysis and a whole range of other diverse activities. All these are done in India because they can be delivered sooner, better or cheaper - resulting in gain for the immediate/corporate customer and ultimately for the end-consumer/individual.