30 July 2012 Think New Think Change The Speech Delivered by Mr.R.Kannan at SIES School of Management On the Occasion of Induction of New Batch of MMS StudentsProf.Sengupta, Prof. Radhakrishnan , Prof. Bose , Dear faculty members and youngfriends, Good Morning to all of you. I would like to thank Dr.Sengupta for theinvitation extended to me to be part of this programme today in welcoming the newbatch of students to this prestigious programme on Management in SIES school ofManagement.The environment we live today is very dynamic and ever changing. We are living in aworld of constant change. There is a great level of uncertainty and volatility in allwalks of life. The challenge for mangers of the Economy and the Businesses is tonavigate these changes and develop a stable economy and business operations.The viable Economic models and Viable business models of today will becomeunviable in future. The systems which were viable in the past are no more viable inthe changed circumstances. The economic models of development and businessmodels are undergoing significant changes. We are living in a complex world , manynew issues crop up every day for which there are no immediate solutions orremedies.Economy. The effects of recent global crisis has made it necessary for new thinkingin managing the present day world. There are many debates around the world onhow to overcome the crisis in so called developed countries and bring back theeconomic growth. The solutions are still eluding and no robust model for restoringthe global economic stability has been found so far. In all these years thinking wasthat the global growth has to be supported by growth in the so called developedeconomies like US, Europe and Japan. The growth in the developed countries hadlost the momentum and the incremental growth in the global economy is mainlycontributed by countries like China, India, Brazil and Russia. The future prospects ofgrowth lies in less developed countries like Vietnam, Colombia, Indonesia, Turkeyand Africa. Considering this fact, there is a need for change in Economic systems.The developed countries should be willing to share the future leadership with theemerging countries today. By encouraging the countries with potential for growth, theoverall economic growth of the world could be restored.Financial Architecture. To sustain the growth levels in the economies thedeveloped countries kept very low interest rates. This has enabled the governments,corporates and individuals to borrow at affordable rates. But after a stage, theborrowing by them became unsustainable since they accumulated debt beyond thelevels which could be supported by income streams. The accumulation of debtbecame a big burden which has resulted in the crises which are being witnessedtoday. The crises in earlier periods were not widespread in the world and therestoring the stability was easier. But at this point in history, the crisis has affectedmost of the countries in the world and there is no immediate solution in sight torestore the growth. The adoption of classical economic theories will not solve theproblems. We have to think differently and implement the necessary changes in theGlobal financial architecture. The solutions to the present day problems lie beyondthe concepts covered in the economic theories available so far. There is a bigchange required in how countries are managed and enterprises are financed. We arein an evolutionary stage to address these problems.
Politics. The traditional thinking and old models favour a large majority single partydemocratic rule to run a stable economy. In the recent past ,we had witnesseddifferent political systems delivering excellent results of performance. India with asystem of democracy and with coalition rule was able to achieve an economic growthwhich had reached its peak. But it could not be sustained due to global crisis andinternal crisis. China was able to develop a robust economic system with thecommunist party ruling. We witnessed good performances from some of the Arabcountries like Saudi Arabia. Then we witnessed the revolutions in some of the Arabcountries in the world. But one good development in politics today is that thepoliticians understand the power of good corporate sector and before the global crisismany of the countries in Africa were planning to create stock exchanges. Thepoliticians today are well educated and they are able to appreciate the contribution ofcorporate sector to the economic development. This appreciation is leading toemergence of new concepts like Public Private Partnership and opening many moresectors of the economy for private sector and FDI. Today bilateral relations are builton the foundation of commerce. Earlier the relations were based on security andpolitical aspects. The need for good governance has been felt even amongstpoliticians. Despite lot of improvement in political system, there is still a need for newways of managing politics and change in the governance models.Society. There is a big transformation in the society. The rural areas are becomingsemi urban , semi urban areas are becoming urban . There is a wide scarcity ofmunicipal services in urban areas. There is a movement away from joint familysystem to nuclear family system. Many in the family go to work and there are manymulti income families. Jobs at entry level assure very high salaries. The towns havepeople from various states and cultural backgrounds. The purchasing power ofpeople is going up. There is a constant upward movement of people from lowerincome segment to higher income segments. More young people are waiting to jointhe ranks of the employed. Each country has its own issues. The average age ofJapanese is very high and individuals in Japan, they have large savings. They do notwant to spend the money. In USA, the savings of individuals are negligible , but theyhave huge borrowings and they want to spend. But they do not have the wherewithalto raise the resources to support the spending. India will have the largest number ofpeople who will be very young in the working population but to make them productivea large scale vocational training is required to make them productive. In countries likeJapan, crisis affected European countries and USA, there is an immediate need forchange in societal systems. The challenge today in US and Europe is to reduce theunemployment level and reduction of household debt. Lot of new ideas are requiredto implement the required changes.Technology. The effect of technology in the last fifty years in our lives is profoundand long lasting. Most of the changes we had witnessed in all these years in allspheres of life were catalysed by the changes in Technology. The latest to engageour attention is the communication technology which has become part and parcel ofour life. In five years, we will witness a sea change in use of technology in our lives.There is a convergence of Technology, Media and Telecom which has impacted ourlives the most. There is a widespread use of technology by government, corporatesand individuals and it is difficult to think about our lives without use of technology.The change in technology has resulted in change in business models of variousindustries. The emergence of new communication technologies, bio technology andnano technology will redefine the way businesses are operated today. It has becomenecessary for companies to adopt the latest technologies to achieve a competitiveadvantage in their area of operations. The emergence of Digital media and socialmedia are changing the paradigms of marketing.
Environment. The issue which engages most of the attention of Politicians andcorporates is the preservation of environmental balance. When developed countriesembarked on the journey of industrial development , the world had a good ecologicalbalance and they were able to develop and run polluting industries. The effect ofhigher industrialisation had its toll on our environment. Now there is an organisedmovement across the world to preserve the environment. The new rules onemissions are acting as a constraint on countries like India where we are yet torealise the full potential of manufacturing. If we allow more industries , it is likely toincrease the pollution levels and affect the ecological balance. If we do not developindustries, then we will lag behind in industrial and manufacturing development. Dueto many environmental concerns the development of core industries like Coal, Powerand mining are affected. There is a need to find immediate solutions so that thetarget set by government to achieve 25% of GDP from manufacturing could be met.New ideas are required to address these issues and management of these coresectors and environment requires lot of changes.Legal. India has one of the well defined legal systems in the world. The number ofcases pending today in courts is very large and if average disposal of number ofcases is taken into account, it would take twenty five years to clear these cases. Thegovernment has set a stretch target to dispose off many of these cases within fiveyears. New ideas were discussed including , reduction of holidays for courts, workingin double shifts, creating special purpose courts, etc. Many cases pending in Indiancourts are trivial and these could be disposed off very fast. In the recent past, wewitnessed some judgements on commercial matters which have made some of theprofitable sectors in India unprofitable. In the last few years , few of the mostprofitable sectors have become unattractive today due to certain judgements. Fewjudgements resulted in discouraging the Foreign Direct Investment into India. Sincethe world has become more complex today, there is a need to develop simple andeffective legal system to resolve cases in an expeditious manner. In commercialissues, there is also a need to take a techno-commercial-legal approach to solvingthe issues.There are many challenges as discussed and the present day challenges requirenew ideas , new thinking to address these issues. The change is required in manyspheres of the economy. Many a times introducing change is difficult and painful.Only by creation of innovative ideas the issues before hand could be addressedeffectively. New thinking requires innovation and innovation has to be created as aculture and many organisations realised this need and in some of the developedcountries , the departments are named as innovation departments and there is aposition of a Chief Innovation Officer.Education institutions have a major role to play in fostering innovation and developingthe attitudes for new thinking. Education holds the key to improving lives andreforming society. Education is a social process, and the most important process indetermining the future of our country. The educational institutes should foster theculture of how to think. People must learn how to think well to achieve their dreamsand to reach their potential.Dear Students, while doing this course, you should develop your skills in thinking. Iread recently that "the battle for control and leadership of the world has always beenwaged most effectively at the idea level. An idea, whether right or wrong, that
captures the minds of a nations youth will soon work its way into every area ofsociety, especially in our multimedia age. Ideas determine consequences."Your objective of doing this course should be to become great learners and greatthinkers. Whatever new ideas come to your mind during an issue being discussed inthe class room , please share your ideas in the class room. The starting point ofdeveloping your thinking skills is your class room. You can discuss the new ideaswith your Professors, Class mates and friends.The country requires agents of change in all spheres. By developing the ability tothink new, all of you can contribute to the development of a Viable economic systemat the country level and development of viable business models at the business level.While doing that, you can create an opportunity for yourself for self development.Dear Students, I have a great pleasure in wising you all , all the best for a productivetime in SIES and encouraging you to learn more, think more and act to bring therequired changes to the benefit of every one in the society.Thank you.