Continuing my sense of disgruntled rebellion from the previous post on the lifecycle of development of markets from developing to industrialized, as posited by Alonzo Martinez and Ronald Haddock, here is their description again to provide some context before I begin my rambling rant.
As a country evolves from developing nation to industrialized nation,
the population’s basic needs pass through four distinct stages. In developing countries, most of the population is preoccupied with basic survival — obtaining adequate food, shelter, and clothing. (Much of sub-Saharan Africa is in this stage right now.) As a middle class emerges, people seek greater quality in their food, housing, and
clothing. (This is currently happening, for example, in much of China and India.) Once a transitioning market’s population can afford relatively high quality, they begin to seek convenience; they buy time-saving appliances and processed foods, and they may move closer to work. (This stage is emerging today in Eastern Europe and Latin America.) Finally, as the market graduates into the realm of developed nations, the population wants customization; with needs for survival, quality, and convenience now met, people will spend a premium (as many do in North America, Japan, and western Europe) to satisfy individual tastes and desires.
Allow me to point to a fascinating speech given on 26th January 2003, by Shri APJ Abdul Kalam, The President of India titled "Vision for becoming a developed nation". One thing that caught my attention in Shri Kalam’s introductory paragraph,
The evolution of human society has followed the path from agricultural society to industrial, information and to the present-day knowledge society. In agricultural and industrial societies, humans and machines dominated warfare. In the information and knowledge society, intellectual capacity would dominate. Intellectual domination is represented by ideologies, principles and faiths.
I have made bold his first sentence, so that one can compare the stages of evolution of human society with that of our esteemed management consultants given above. Leapfrogging his way beyond industrialization, President Kalam posits that societies continue to evolve, first into information based ones and then finally knowledge societies, such as in the present day. And his vision for India’s path towards becoming a developed nation is founded on principles of value such as education, empowerment, access to information and a peaceful tolerant civic society.
I cannot help but compare that to the high point of development shown in the graph above, where the pinnacle of achievement is the ability to choose customized products to satisfy wants rather than needs. Am I advocating austerity and poverty? No, I’m trying to point out that markets are not nations, and while global corporate giants would like to develop their new markets through the pathway to customized consumption shown, that may not be the best answer to the development of the country, its citizens and its society. Countries are countries, populated with real human beings, with their own culture and language and cuisine. Markets, on the other hand, are demographics and quarterly figures. It feels as though it is a chicken and egg story here.
Should a nation develop itself first? Be able to proudly provide potable water, sufficient food, adequate shelter and employment for all citizens who shelter under its protective umbrella, as President Kalam dreams for India in 2020?
Or should the markets be developed, to provide choice, convenience and consumer goods, to those who can afford? How does one support the other? How do they integrate? Should development of each side of the equation – the market and the nation – be balanced in order to moderate their relative equal growth? Or left unchecked, for short term gains and profits, let one outstrip the other, leaving tens of millions behind?
Or alternately, can one be grown to provide the profits that could then be invested in developing the nation, or at least a percentage thereof? Call it the Corporate Social Opportunity Tax, one that says, that if you reap profits from the benefits of doing business within the supportive environment of this country, here is the balancing tax you must pay back in order to support the simultaneous development of that country. Not just its markets.
And its a win win scenario, or could be, in the longer term. Why? Because as you invest back into development – be it education, infrastructure or planning – your ROI, your return on your investment, will only be an increase in the numbers of the population who could then afford your product or service, thus growing your market indirectly rather than directly by putting that money into more advertising billboards or commercials aired on primetime cable.
What do you think?
[Update] After I wrote this, I came across Mandar’s post today on his blog, Ink Sprawl, where he points to this news article that is worth taking a look at and almost lovingly asks "Has our Prime Minister lost it?" – Dr Manmohan Singh’s brand equity is rock solid amongst the majority of Indians according to a recent poll somewhere, maybe India Today.