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India’s IIT Elite Could Shape New ‘Asian Capitalism’

SINGAPORE, Apr 10 2012 (IPS) - The rapid currents moving the centre of economic influence towards an emerging global order headquartered in Asia were evident at the PanIIT’s 2012 annual conference of alumni of the highly prestigious Indian Institute of Technology (IIT), which took place in Singapore over the Easter weekend.

The three-day conference hosted a diverse range of top-notch speakers representing global business, academia and the financial sector, expressing their views on developing strategies to navigate the challenging global economic environment and to create sustainable long-term growth.

Except for one Westerner, all the speakers were Asian, mainly Indian, including heads of formidable global businesses, such as Arjun Malhotra, co-founder of Hindustan Computers Limited and chairman of Headstrong USA; Shekhar Mitra, senior vice president of Procter and Gamble USA; R. Gopalakrishnan, director of Tata Sons Limited; and Ho Kwong Ping, executive chairman of Banyan Tree Holdings, Singapore.

Hosting the meeting in Singapore was a first for a group that, since 2002, has convened alternatively in India and the United States. But there are over 1000 IIT graduates who now work in Singapore, many in high profile jobs such as the provost of the new Singapore Management University, Rajendra Kumar Srivastava.

“Most IITians coming here have had significant work experience and they have filled a gap in Singapore’s existing skills,” S.N Venkat, secretary of Strategic Partnerships at the IIT Alumni Association of Singapore, told IPS.

The high regard in which IIT is held in Singapore was reflected in the fact that the country’s former president S.R Nathan is the patron of the alumni association here, and the current president, Tony Tan, was the chief guest at the gala dinner on Saturday night.

In his keynote speech to the conference, S. Iswaran, minister in the Prime Minister’s Office, said the high number of IIT graduates working in Singapore and across Asia “reflects more generally a fundamental shift in the global centre of gravity from the West to the East.”

Iswaran warned that as manpower costs and energy prices rise, and Western currencies weaken, Asia’s advantage as a low-cost manufacturing base will wane.

“Asian economies need to be able to move on to higher value-added economic activities in order to sustain their economic growth. They will have to leverage on design technology and a skilled labour force to create products and services for their own domestic markets, as much as for the rest of the world,” he noted.

This is where Asian institutions like IIT are expected to play a leading role.

A roundtable involving visiting directors of IITs from around India and four local universities discussed possible collaboration efforts, including the long-standing invitation from the Singapore government to set up an IIT campus here.

“As Singapore becomes an educational hub for Asia, especially for Southeast Asia, (our) emphasis is on having institutes of higher learning of global repute to be based here to attract students from the region,” explained Venkat.

Many speakers pointed out that with economic crises in Europe and the U.S. still unresolved, following the western capitalist model blindly is not the right development path for Asia, which should instead develop its own model, utilising traditional practices.

This was a theme reflected in a keynote speech given by Ho Kwong Ping, whose Banyan Tree Holdings has developed a chain of luxury hotels across the world based on Asian tastes and standards.

Still, he warned that Asia’s rise is not predetermined and argued that the continent must produce a basket of intellectual solutions to address Asia’s chronic social inequality.

“China has a deficit of democracy (while) Indian leaders have realised that democracy is not reducing inequality” and both are unable to “move beyond capital reforms,” he noted.

“As Asia continues its dynamic growth we need to delve into our own history and culture for inspiration to develop Asian values of capitalism. One resource could be the webs of mutual obligations which are present in virtually all civilisations of Asia,” argued Ping. “It is possible for Asia to develop this communitarian capitalism, if properly nurtured and developed, as an alternative to the highly individualistic model of American capitalism.”

Ping singled out India’s Tata model of capitalism, which benefits from being “stakeholder driven and not shareholder driven.”

Tata’s Gopalakrishnan told IPS that most Asian businesspeople have been reading books written by Westerners and adopting their ideas only because there are hardly any books written about good practices by Asians.

“The West is…saying we must become conscious capitalists (though) many people in Asia are saying we have always been doing that,” he said.

He said that Tata used its one billion dollar profits to set up a trust to help the poor, “so part of our profits go back to the community.” The Tata group consists of over 100 companies in seven business sectors operating in more than 80 countries around the world.

In the past two decades IIT graduates have been some of the most successful innovators and entrepreneurs in the U.S.’s Silicon Valley. If they turn their attention to the rest of Asia now, experts believe they could make a big difference.

Jignesh Shah, founder chairman and group CEO of Financial Technologies India, a world leader in creating and operating technology-centric financial exchanges, argues that new business models in Asia are opening up.

“It will create huge opportunities for the best brains from Asia like you (graduates of IITs),” he told the conference. “India and China have huge savings rates and if it gets into share markets rather than remaining in banks … Asia will generate the next Goldman Sachs.”

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