By Irfan Ahmed

While most of us, driven by nationalist fervour, celebrated the award of the 1998 Nobel Prize for Economics, to Amartya Sen, few understood thereal reason behind it. Expressed somewhat plainly, the central theme of his work is the repeated assertion that development, in its true sense, means more than mere economic prosperity; it also means progress in education, social security, healthcare, and gender equality. This radical notion of development will be the driving-force behind Indian polity, society, and business in this millennium.

The single-most important purpose of business is profits. This is predicated upon the idea, first evolved in modern Europe, and associated with the Classical Political Economy School, that individuals, as consumers of goods and services, are rational, self-conscious, profit-maximising and, to add a 21st Century touch, educated and well-informed.

A close look at one of the vast virgin markets known to business-rural India-tells a different tale. People in rural India and, indeed, most of urban India, are illiterate, unhealthy, and, therefore, lack desirable resources and consciousness regarding choice of products. These anomalies are major impediments to the success of private enterprise, and to the expansion of the market.

To flourish in this millennium, companies need to fulfil 2 basic requirements: one, build a skilled labour-force. With the State withdrawing almost totally from education and other social services, it is in the interest of companies to create a skilled, literate, and healthy labour-force. Second, if companies are concerned about expanding the market well into the 2020s and 2030s, they have to look beyond the middle class, at the lower economic-classes. For products to reach the vast hinterland, companies have to work on the attitude and consciousness of rural consumers. And this change cannot come about in the midst of rampant illiteracy and all-pervasive ill-health.

Japanese corporations serve as a good example. The social concern that Japanese corporations exhibit is one of the main factors behind Japan's success. In most corporations in the West, the relationship between the firm and employees is essentially economic. In Japanese companies, the relationship is more than just that; companies look after other needs of their employees. Hitachi, for instance, offers housing facilities to all unmarried employees, and nearly half its married workers.

Companies could also imitate Unilever's successful experiment in China, where the company identified an area for establishing a manufacturing facility, and focused on developing not just its operations, but also the entire area. The experiment did not just maximise the company's profits, it won the credibility and loyalty of its customers too.

Similar experiments can be attempted, perhaps with much more success, in India as well. This is because of the premium the Indian value system places on loyalty. Thus, in this millennium, companies will invest not just in manufacturing and selling products and services, but also in socially-relevant areas where profits and the well-being of people go hand-in-hand. In the long run, it will be to the advantage of companies if they help to build a solid base for further growth.

Companies will find their 21st Century customer more environment-conscious than her 20th Century counterpart. A company that is not sensitive to this issue will fail not only to address the legitimate concerns of green consumers, but also to enhance its own market position.

As far as public sector enterprises are concerned, they should not repeat the mistakes they made for most of the 20th Century. With the free play of private companies in the market, a State-enterprise ought to strive to inculcate the competitive spirit in its employees if it wishes to survive.

The main reason for the losses that most state-enterprises and, indeed, most states themselves, registered in the previous century was the inability of the polity to look beyond the electoral tunnel at the country's long-term progress. Consider the case of subsidised electricity. In rural India, electricity is consumed by rich farmers who are in a position to pay for it. However, since they are politically influential, no government, irrespective of the ideology driving it, has ever charged them. Reason: immediate electoral gains. In years to come, political parties must shed such populism.

A major corrective initiative would be a transformation in the existing prestige structure of professionals working in government enterprises. It is evident that the process of metropolisation has set in among bureaucrats, especially those in senior positions. Thus, they aspire to move from tehsil-blocks to district towns, from district towns to state capitals, and from state capitals to metropolitan centres.

The ramifications of this process have been far-reaching: a devaluation in the quality of professionals based in the countryside; an excessive concentration of better minds in the metros; and, above all, an utter neglect of the underdeveloped rural areas where most of the people live. Professionals based in big cities are supposed to be desk-centered and, hence, thinking, while those in the peripheral places are supposed to be field-oriented and, hence, ordinary. Such a divide was at its lowest in colonial times. Many renowned colonial administrators spent a considerable time in the countryside. For them, far from being mutually antithetical, desk and field were complementary. For us they are not, and that is, probably, going to be our greatest inadequacy this millennium.

In the 21st Century, we-society, business, and the polity-must try and bridge this gap. Only this will help the cause of growth or development in the country. As a first step in this direction, both the public and the private sectors must de-metropolitanise all professions. That will be the ideal millennial agenda for India Inc.

Irfan Ahmed is a doctoral student at the Jawaharlal Nehru University

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