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How to revive Western Economy? January 19, 2009

Posted by Bipin Agarwal in Global Economy, Politics and economy, Quality of Living, Real Estate Development in Global Economy, Real Estate Development in India, Recession.
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Global  economy has a role to play in reviving the economy of countries, but is to change to being a mix of global and local. I call it Glocalization. This is the new mantra for making the western economy vibrant. There are several ways it can be done. I will talk about some of them below. If you have other ideas, let me know.

Business Model

Business model that has been built in the west based on central control, scale the business some how, consolidate, etc. does not work. CitiBank, BOA, RBS, Countrywide, fortis, just some example.  Creating long term business will require some kind of local ownership not just marketing such as HSBC (your local bank). Some sort of franchise model for the front end. Back end efficiency can be consolidated same way as stock exchange does it.  It will create local jobs, loyalty, community involvement, etc. Small to Medium business should dominate the business activity. What if Starbuck had a local owner for each of the store, there will be as many business owners, no union, local connection, brand value, etc.

Manufacturing

There has to be local manufacturing. Bottom sixty percent of the population survives on low tech manufacturing and providing services to the other forty percent. Without low tech local manufacturing, it will be tough. Could it lead to increasing the cost of some of goods manufactured locally, yes, but there is no reason for common person to leverage low cost of labor from some other part of the world to have artificial better life like we have been having in Western world.  Western countries have a life time opportunity to keep the next generation of technology local, create local jobs, and eliminate the trade deficit.

Education

We are fortunate that we create lot of intellectual capital because of higher education, then we turn around and send the export the technology for using the cheap labor, makes no long term sense. One area when US can take leadership is green energy (solar). All the electric vehicle should be created here for local consumption.

Immigration

USA is doing a poor job of managing its immigration policy. Lot of people from all over the world come here for higher eduction, we need to make every effort to keep them here. If  anything we should encourage people from all over the world come here to get educated and make every effort to keep them here.  This is the biggest growth area and biggest competitive advantage for USA in  21st century.

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

http://twentyminutelifestyle.wordpress.com/about

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Comments»

1. Ashwin Bhavikatti - January 20, 2009

Bipin

I have reading the blog articles you have written, and needless to say, It gives a very interesting viewpoint about the global business and economy. I have always been very interested in learning further and newer concepts, and this is good for me personally.


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