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Building experiences for economic activity

Prabhudev Konana

The Amish in the U.S. have showcased their way of life as a product to create wealth. India too has numerous such opportunities to increase economic activity.

TO ESCAPE religious persecution, the Amish people belonging to the Anabaptist Christian denomination fled many parts of Europe and moved to the United States between the 17th and 19th centuries. There are now about 200,000 Amish in the U.S. They shun modernity — including electricity and automobiles — and live in communities dependent on agriculture and handmade products. They still use horse-drawn buggies. Ironically, people in large parts of India are forced to live in similar conditions, albeit without the access to basic needs the Amish community has. How is this related to the title of this article?

Each year millions of people visit Amish communities to experience their lifestyle and wonder how their simple living is juxtaposed with modernity. Here is a paradox: Amish communities may dislike the attention from the outside world but like the economic impact of tourism on their communities. In 2003, Pennsylvania's Lancaster County, where the Amish community is a major attraction, reported more than $4 billion in tourism-related expenditure, 45,919 jobs, and a tax revenue of more than $250 million! Numerous museums explaining the Amish way of living, stores that sell Amish memorabilia, handmade products and furniture, and businesses offering buggy-rides are thriving. Here is the entrepreneurial mindset that exploits the Amish's way of living as a product to create wealth that benefits the local population.

India has numerous such opportunities to increase economic activity, create jobs, and improve living conditions; for example, in farming, the silk and garment industry, among artisan communities, and in traditional sectors such as textiles and jute. This is the way to connect the financially well off population to the masses and benefit from their spending. The key here is to create an experience that will be attractive to visitors.

When I led two groups of MBA students to India from the McCombs School of Business, we visited the Mysore Silk Factory, the Centre for Sericulture Research, and a community that makes handicrafts in Mysore. Despite the buzz surrounding the magnificent Taj Mahal and fabulous campuses of Infosys and Wipro, a large number of our students were thrilled to visit non-traditional places. They were excited to learn how silk worms grow, how silk is extracted from cocoons, and how weaving is done with splendid patterns and colours. A couple of curious students made a special trip to a village to see sericulture. Several students bought silk sarees even though they had little idea how to use them. Some thought of using sarees as draperies because of the colourful patterns! If this is how they perceive possible use of the products, so be it. These visits enable producers to understand potential new uses and markets for silk material. The bottom line is to spark interest among consumers to make them purchase goods that have significant factory-farmer economic linkages.

Karnataka takes pride in Mysore Silk and wants to protect this industry under Geographical Indication (GI) registration. This is important to support thousands of weavers, silk farmers, and factories. However, many of the silk factories may not last long. The machines are obsolete and working conditions are pathetic. The factories lack resources to modernise and the government has few resources to allocate. Unions resist privatisation without recognising the economic reality of failing factories and low-quality products in a competitive global economy.

However, there are simple strategies for a turnaround. It is possible, very much like the Amish example, to create an excitement around silk factories that can touch the emotions of the people and increase traffic to see their products. If lakhs of people visit the Mysore Palace, the Brindavan Gardens or the Dasara festival, why not attract part of that crowd to see how silk sarees are made? Why not create a place for children to feel and touch silk worms, and create an environment to experiment? Of course, we can find numerous reasons to shoot down such initiatives like worm infection or loss of intellectual property; but there are compelling economic reasons to find ways to mitigate the risks. Many factories around the world encourage visitors so that people become emotionally tied to their products.

However, our experience in the showroom outside the silk factory was less-than-satisfactory. Some employees cared little whether we bought anything or not. Worse, checkout experience was something to forget with different persons to pack, bill, collect payment, and verify when all that activity can be done by one person. A factory showroom should be the final touch to the experience for consumers who not only buy products but probably become brand ambassadors. I found a union leader more excited to see the visitors in the factory than some of the managers; he even pleaded with us to buy products in the showroom (he was furious with the showroom employees when I reported bad service).

Changing mindsets

Why can such a mindset not be expanded throughout the factory and particularly within management? Why not think of making the factory a tourist attraction to increase traffic to the showroom? Can there be a better marketing programme than this? Why not reward employees who think differently to create demand for products with more than a meaningless salary increment that treats all employees the same? Of course, the union leaders should also recognise that quality, productivity, and profitability are necessary things to keep the factory running and not just lifetime job guarantees.

We visited a neighbourhood in Mysore with a large number of artisans. It was fascinating to observe how artisans meticulously carve out intricate designs by hand, and create fascinating inlays. Needless to say, several of us bought these outstanding handicrafts directly from the artisans. We need to design ways to increase traffic to artisan communities. How about creating an experience around "artisans-at-work," and for tourists to experiment making these products? If tourists are astounded at remarkable handicrafts at Kaveri Emporium in Bangalore, why not attract them to the places where they make them? Such places provide more options for tourists and encourage spending beyond at a few star hotels and luxury stores.

The experiences around communities have socially redeemable value. Children become aware of the talent in their own communities and, hopefully, this sparks interest and ideas to exploit it for economic gain for all. In the U.S., despite significant security risks, the National Aeronautical and Space Administration (NASA) attracts millions of visitors to its facilities. They have redesigned the workplace so visitors can observe mission control, astronaut training, and shuttle launching live. Visitors are a source of revenue, but NASA is a source of knowledge, and an inspiration for creating that next remarkable astronaut and sparking interest in science and technology. The Ford Museum takes one through technological progression in its long history. Numerous museums around the world encourage active participation and learning by touching and feeling. Infosys, for example, has created a small museum of its own short history that can fascinate business leaders around the world.

Of course, we shouldn't take this to an extreme like showing Dhobi Ghat in Mumbai. Several students and I felt guilty when a tourist guide called Dhobi Ghat a "spectacle." We chastised him for equating horrendous living conditions with a spectacle. Thus, whatever we do, we should do with sensitivity and with the objective that economic invasion of a living community is only for the benefit of that community.

The only hope for improving people's lives is to create and encourage economic activity that employs or impacts the ordinary person. We need a natural economic system to distribute wealth. For this we must encourage rich folks (and foreign tourists) to spend in areas that touch the masses. The government can encourage spending by businesses through incentives such as additional tax benefits on expenses in rural communities, or purchases of traditional handicraft goods that directly impact low-income artisans.

While we contemplate increasing economic activities, we need to be less critical of rich people who spend their legitimate wealth on lavish shopping, parties, weddings, resorts, five-star hotels or eating out. It is actually good that they spend since it is not realistic to assume that they would otherwise give it away for social good. It is also likely that some of the "unaccounted" money is also spent. We would rather have money circulate in the economic system! Just imagine elaborate marriage halls and flower arrangements; they employ hundreds of people and create so much demand for products and services that touch the ordinary person. With increasing wealth and foreign visitors, there will be demand for entertainment and leisure and the time is right to promote spending for social good.

Many criticise India's economic growth as benefiting only the top of the economic pyramid and as increasing the gap between rich and poor. It is unclear if there is any economic development in the short run that narrows this gap. Our focus should not be on whether the rich are getting richer but on whether the bottom of the economic pyramid is becoming economically better off and getting opportunities to succeed. In a small way for this to happen, we may want the rich to spend, and spend on the things that touch the masses by creating experiences around traditional communities and factories.

(The author is a Distinguished Teaching Professor at the University of Texas at Austin and can be contacted at pkonana@mail.utexas.edu.)

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