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Shift in landscape of global economy

DALIAN: The World Economic Forum (WEF), a gathering of the movers and shakers of international business, is the place where the hottest global economic trends are spotted and forecast.

The trend that emerges most clearly from the WEF’s latest summit is the perceived shift in the landscape of the global economy, from West to East and from the well-established behemoths of the corporate world to a new breed of young but ambitious upcoming companies.

On Thursday, the WEF’s inaugural annual meeting of its ‘New Champions’ platform kicked off, located tellingly in the north-eastern Chinese city of Dalian. The choice of both the city and country for the hosting of this meeting underlines the growing movement in the centre of global economic gravity eastwards, to China in particular and Asia in general.

With its sea-side feel and manicured lawns, Dalian is a stark contrast to the snow of Davos in January – the venue of the WEF’s flagship annual event.

Nonetheless, it is in Dalian that the “summer Davos” is taking place, a city that in addition to being a major shipbuilding region also boasts thriving software and technology industries.

It is in this “emerging” city within China that the business leaders and politicians of the world will discuss over the next few days, the pressing economic concerns of the moment, including energy security, environmental degradation, geopolitical risks to business and protectionism. The primary focus of the “Summer Davos,” however, is on a new class of leaders and innovators, the “New Champions,” and how these are re-shaping international business and transforming society.

Unsurprisingly, India has a large 80-member delegation participating at the meet. Four global Indian companies, Infosys, Reliance, HCL and Financial Technologies, are in fact partners to the Dalian summit. In addition, the Government of Gujarat is participating with a 25-member delegation led by Chief Minister Narendra Modi.

In an interview to The Hindu, Mr. Modi said he was at the forum because he was aware that “globalisation was a fact of life today, whether or not you liked it.” He said he had learnt much from China, in particular regard ing the development of Special Economic Zones (SEZs) and was thus determined to make Gujarat the SEZ capital of India.

Mr. Modi added that in his interactions with business leaders during the meeting, the buzz surrounding India was loud and clear. “When it comes to doing business in India, people are no longer asking me whether to do business, but how to do it and where to do it.”

Other members include Deepak Puri of Moser Baer India Ltd, Malvinder Singh of Ranbaxy, B. Rama Raju of Satyam and Sanjiv Bajaj of Bajaj Auto. Many of these companies already have China-based operations.

Others like Bajaj Auto are currently looking at ways to enter the Chinese market. In all cases, the participating companies are attempting to move beyond national borders and transform themselves over time into multinationals of weight or the “new Champions” that the meet is all about.

“The old established companies have the advantage of stability and brand recognition. However, they are often not flexible enough in the fast changing environment of today. New champions are exciting and adaptable. However, they have not yet tasted long-term success,” said Sanjiv Bajaj, Executive Director of Bajaj Auto. “What’s needed is a dialogue between the two and an exchange of ideas to the benefit of both,” he concluded.

Elaborating on the concept of starting a new “Summer Davos” to supplement its already existent Davos meet, Klaus Schwab, Founder and Executive Chairman of WEF said that “China and India are the new global players and partners.” The first day’s meetings were capped by an address by the Chinese premier Wen Ziabao. The premier pointed to China’s achievements over the last years, saying that per capita incomes in the country had quadrupled, while the numbers of those living below the poverty line had reduced.

He added, however, that China continued to face serious challenges stemming from instability of fundamental economic structures, inequalities in growth, inefficient pattern of growth and depletion of resources and environmental degradation.

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