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Bravado_Vs_Sucess

PROTECTIONISM VS ENCOURAGING ENTREPRENUERSHIP

Writing her columns for a business daily a senior journalist recently wrote of her experiences of flying to Madrid via Brussels from Chennai in a private airlines. Pointing out that experience in the Brussels-Madrid-Brussels sector on Brussels Airlines “was an eminently forgettable experience”, the senior Journalist went on to add, “The Chennai-Brussels sector on Jet Airways spanking new A330-220 aircraft was a virtual treat. After exchanging notes with other international journalists – from China, Canada, the US and Europe – who had all travelled business class, one was convinced that the Jet experience was indeed special.”

This spectacular rise of the Indian civil aviation industry as a global player intrigued me for contrary to the popular economic wisdom prevalent in India, the civil aviation sector remains as one of the most protected sectors. How could somebody who has not collaborated with a foreign partner, brought in FDI and play a second fiddle to a foreign partner be a success in India and more importantly at the global level, I wondered to Dr. Mehta, the competition specialist. Instantly he played ball.

“Narada, the lessons behind the calibrated opening of the Civil Aviation sector is instructive and remains in my considered view, an appropriate lesson in our process of globalisation. Consequent to the strategic protection offered to the civil aviation industry, it could afford to acquire the necessary technical, financial and managerial capability to partner the very best globally on its own terms while retaining its Indian identity. This in turn helps in building up the brand image of the airlines, industry and of course the country.” “But is not protectionism per se bad? Is it not our experience of the last sixty years enough to prove that the point? I enquired on the assumption that I had Dr. Mehta on the mat. “Protecting or opening an industry is irrelevant Narada,” replied Mehta and added “the fact of the matter is that the domestic civil aviation industry has leveraged the same to emerge as a successful global service provider surpassing even international standards. This is a conclusive proof that conventional economic thinking does not hold water for all industry at all times.” That was uncharacteristically emphatic for an economist, “So do you think that we should go back to the good old days of protectionism?” I enquired tongue in cheek in an attempt to provoke Mehta further. “Narada”, Dr. Mehta replied coolly and without a trace of irritation “Understand that globalisation is the war of entrepreneurs, who are indeed a rare breed. They require nurturing by the State, which needs to be contrasted from the rather popular yet economically disastrous idea of protectionism. It is the profound duty of governments to ensure that the entrepreneurs succeed by its appropriate choice of policy.” I understood what Mehta implied. Yet I requested him to elaborate. Mehta was too glad to do so. He said “It is this success of entrepreneurs that propels the image of the country higher in the comity of nations. America is known by Microsoft and Japan by Sony. If Gates and Akio Morita were eliminated even within their own country by poor policy choices, their companies would never have emerged as serious global players, leaving the respective brand images of their countries poorer.” “Are you suggesting that governments across the globe have put in some system to protect er…. I mean encourage domestic entrepreneurship, nurture it and then open-up the said sector,” I said correcting myself just on time. “Narada, just as there is a thin line separating bravado and courage, governments must learn to distinguish between encouraging domestic entrepreneurship and protectionism.” I asked the next obvious question “Does our governments have this ability?” Mehta smiled, a smile that was pregnant with a billion meanings. Is the rise of the Indian civil aviation industry fashioned by protectionism, calibrated opening, dogged entrepreneurial spirit or by sheer providence? Would any one answer this question?

 

Last modified on Sunday, 07 July 2013 07:36

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