The world’s economic balance is tilting towards the east- namely the Chinese speaking world and India along with Korea, and Singapore. The Chinese have a trillion plus USD in their reserves and are the factory line of the world, in the past three decades 300 million Chinese have been lifted out of poverty and the Gulf based sovereign wealth funds are lapping up assets in the west as the economic free market structure crumbles under housing and consumer debt. Greece defaulted on its debt repayment plans and the Eurozone shivered, Spain and Ireland are next on their way to the financial clinic to check in to the ICU. Bail outs since 2009 have been the order of the day. America is bail out central. GE and the biggest american brands have received government funds to survive. Its the socialization of the losses and privatization of the profits. It seems an irony that these are the same people who call for limited government intervention and the free market in boom times. America stopped manufacturing since the 1970’s by outsourcing it first to Korea and Singapore in 1970’s, the Asian Tigers in 1980’s and finally bangalore’d their strength; the service sector to India, South Africa, Philippines and Eastern Europe in the past two decades. Apple is the benchmark of American Innovation, but it only design’s its products in Cupertino and its manufacturing its done by the Taiwanese major Foxconn in its industrial estates in China, employing millions and not thousands like in America as Apple does; that too very highly skilled talent from Berkeley, not the high school diploma out of the public school system in Brooklyn. American graduates teach English in schools from Sharjah to Shanghai as there are no jobs in US itself. An average American college graduate has a starting debt of 24k when he begins his first payable full time post. American Political Commentator Fareed Zakaria has called for an overhaul of the innovation ecosystem to create jobs in his series on CNN.
In short, economic growth without job creation is meaningless with the demographic bomb exploding in Africa, Middle East and South Asia. Social implications of a society are huge with three skipped meals acting as a trigger for a revolution as the vegetable seller in Tunis that ignited the Arab spring. In India, Maoists have capitalized on this sentiment of dis-entitlement where the tribal and the Subsistence farmer have no option to give away fertile agricultural land at throw away prices to loan sharks or to corporate land grabbers for the real estate scam called the SEZ or an economic free zone. Free zones in the Middle East are created on arid desert land like the Ras Al Khaimah Free Zone or the Salalah Free Zone in Southern Oman where land is not for agriculture. India has 100,000 farmer suicides and is a net importer of food. Our so called demographic dividend as Nandan Nilekani calls in his lucidly written book ‘Imagining India’ can be only materialized if education is reformed to make it inclusive as half the engineers in India are not employment ready and companies have to re-train them before work. Manufacturing is stuck in the matrix of antiquated labor laws and land acquisition. Agriculture needs the most reform to make it viable career option once gain.
Services by nature will cater to the very educated cadre of the work force, apart from Singapore or the Scandinavian nations, but larger countries would have to be be manufacturing nations by creating home grown Samsung or Haer to satiate the social need for work and livelihoods, to avert another Jasmine Revolution or a Singur.