by Vince Lau
Walk through the revolving doors into a hardware store, unmistakenably American, forcing a nod to the forced smile of disgruntled employees whose “How may I help you?”s slur uncomfortably close to “What is the Mets score?” Stroll to the back of the store, holding the house key that you need duplicated, and sigh as the high school dropout asks his boss unnecessary questions. Forty minutes later, you walk out, fuming with rage for paying so much money for two dissimilar keys. The next day, you drive half an hour to a new hardware store, recently opened by a friend’s friend, Asian. The place is shabby, under heavy renovation. The man takes your key, chatting momentarily about political strategies and already, you are impressed. You can hardly believe it when he continues the conversation, ten minutes later, handing you two identical keys, and charges you half the price. While walking back to your car, overly satisfied, you are boggled with questions. First, how is a brilliant Indian man like that working at a shabby hardware store? Second, how is a place like the first hardware store still in business?
China and India are the top two shabby hardware stores, the “emerging markets,” reenacting the same story as Japan and Korea at their postwar era. Unlike the old story of miracle turned madness, economists are forecasting growth lasting over twenty years with no sign of collapse. We all know the facts. Both countries expect a growth of young researchers by 35% in 2008, while U.S. researchers will decrease 11%. 90% of the world’s toys are exported from China. India contains some of the most progressive and challenging tech universities, accepting students that have MIT and Princeton as backups. These two rising economies will shake hands to trade over 20 billion US dollars this year, quadrupling numbers in 2002. Surprising as the facts may be, they are not new. “China/India is the next big thing” caveats have been inculcated in our heads by professors, business colleagues, and even those clueless in business. But is this more hype than action? Growth rates and export percentages may dazzle and shine, but for a permanent sparkle of national power, other factors must be considered: Education, Innovation, Governmental Structure, Wealth Spread, and Collaboration (China/India).
As mentioned earlier, universities in India are more selective and coveted than even the most prestigious American universities. Education is not taken for granted there, for all the people that make it to university have gone through strenuous pre-college education, not only in terms of heavy curriculum, but also in dilapidated classrooms. For the same thirty student classrooms that we call crowded here, some Indian elementary schools pack in a hundred, like ones in the Bombay slum city Dharavi. The education problem is exacerbated with a strictly traditional and incomprehensive curriculum. Just within the last five years have China and India realized that their old schooling methods cannot compete in this new business world.
Due to the rigid education structure, China and India have long been counted on to produce very book-smart, but rarely any innovative individuals. These assumptions are changing. Even in the most remote places of China, such as Shantou University, American teachers are being drafted by Chinese billionaires to entirely reform the education system, implementing common schooling tools unheard of in China such as credits and electives. New York Times Magazine recently published an insightful article that follows the Chinese attempt to emulate Western education because they worry that “too many students have become the sort of stressed-out, test-acing drone who fails to acquire the skills — creativity, flexibility, initiative, leadership — said to be necessary in the global marketplace.”
While the solution seems easy enough—reform the education system—China and India encounter more roadblocks than America would under a similar circumstance. The prime obstruction lies in the governments of both nations, traditional and corrupt. China’s growth is very intimidating indeed, but it should be perceived as more of an opportunity than a threat. Its government restrictions will keep China from achieving full economic potential, but the increasing development will raise the “China price” that has only been possible due to China’s underdevelopment. India sits in the same boat, controlled by a deceptive government, which has mostly turned a blind eye to the ever-widening wealth gap. Nearly eight percent of the world’s poor live in India’s most populous state, Uttar Pradesh. Without dramatic government modification, the wealth spread will nullify growth rates in China and India. These two nations, with vast resources and tremendous potential, will remain simply the outsourcing agents of America if they continue to accept provincial governing.
I return to my original questions. Why are China and India, with so much talent, still far from cashing in on that potential? It is a rebuilding process, removing blocks of oppressive tradition and laying new foundation for individuality and creativity. These shabby hardware stores are “emerging markets,” and as long as they recognize the need for reformation as opposed to expansion, “emerging” will be a word of the past. As for the question regarding the future of ungrateful big chain hardware stores, I refer to Donald Straszheim’s response to a Businessweek question similar to mine. He responds insightfully about Americans, “Individuals need to build their human capital -- knowledge, education, work skills, and habits. Find companies to work for that are innovative, with managements that look to the future and attempt to posistion themselves for the future, and operate in an efficient and cost-effective manner.” I hope the entire nation heard that.