The Global President

Globalization…In Rio they party on the beaches. Obama, Japan: the namesake town celebrates with song and dance. In Sydney jubilant crowds roam the streets. The first global president has been elected. He combines black and white, Christian and Muslim, the US and Africa and Asia.

Globalization is the result of an increasingly connected world. None of the major issues facing us today, from a financial meltdown to global warming, can be solved by a single nation. No company can bring its products to the market without components obtained abroad. Markets are intertwined, operate 24 hours a day and are highly dynamic. A ripple in one place can become a tsunami in another.

The last months proved again that there is no such thing as a local market. At first Europe thought they could escape the impact of the bottom falling out of the financial markets. Shortly afterwards governments around Europe had to bail out one bank after another. Who would expect that a little island on the edge of the world, called Iceland, would get so affected by frozen markets!!! So get used to it: your world has become bigger, more complex and more interconnected than ever. And this will only accelerate…..

The Bush Doctrine has crashed and burned and the Obama Doctrine of engagement and collaboration has risen out of its ashes, reactivating the American Dream and establishing the USA again as an open place where talent from the whole world can come together, study, innovate and build companies. When my Indian business partner Jerry Rao and I started our company, MphasiS, 50% of the new companies in Silicon Valley were started by people who were born outside the US. After 9/11 it has become harder for foreign talent to study and work in the US. This led to a reverse brain drain back to India and China where the opportunities suddenly looked brighter. With an Obama administration it is expected that the US will again become engaging and innovative by investing in the next generation of ITC, healthcare, biotechnology and green energy innovation.

In 2006 and 2007, 124 countries grew their economies at over 4 percent a year, while countries like Holland grew barely 2%. China and India have dramatically changed the global landscape. China has moved in a mere 20 years from a backwater to a manufacturing powerhouse. You have seen the Olympics. This is only a glimpse of things to come. A country of 1.3B, growing consistently at 10% a year. This is mindboggling. Even India, a country many people still consider to be an oddly curious, overpopulated place full of beggars, snake charmers and gurus, is charging ahead at 8% CAGR. Its companies and managers are among the best in the world. India and China educate the majority of scientists and engineers in the world. There is a sense of self confidence and ambition. The largest infrastructure projects are in these countries. For instance, mobile networks are more sophisticated than those in the West. A cell phone call from Cochin is clearer than one from Connecticut.

In the mean time we are trying to cling on to what we have. We hope that innovation will still come from the western world. Don’t hold your breath; if you’re not educating the people to carry out the R&D you’re not going to innovate. Globalization means new players (BRIC: Brazil, Russia, India, China) on both the economic and geopolitical fronts. Those who have the economic power will have the political power. The US will be busy the coming years to get out of the hole dug by the highly incompetent Bush administration. To quote Fareed Zakaria: we are entering the post American era. Hopefully the USA will find its bearings again under Obama's leadership.