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Association of Indians in America Annual Dinner

Emerging leaders and economies

by Jonathan Gramling

Whether it's a discussion about the outsourcing of jobs or growth economies, it seems that most business leaders and economists have their eyes set on Asia, particularly China and India. As a former senior staff economist on the President's Council of Economic Advisors under former Presidents George H.W. Bush and William Clinton, Dr. Michael Knetter, dean of the University of Wisconsin Business School, has had a chance to observe the emergence of these countries into players on the international economic stage. And as an international economist, Knetter isn't intimidated by their emergence; he's excited by the possibilities.

On April 23, Knetter addressed an audience of approximately 75 people gathered for the annual graduation banquet of the Association of Indians in America (AIA) - Madison chapter at the Hilton Garden Hotel, and reflected on the emergence of these economies. "The transformation that is going on in the Indian economy and society as a whole, I think, has been a very exciting development over the last 20 years, certainly in the global economy," Knetter said during his brief remarks. "Maybe people thought a little bit more about China at times, but certainly China and India are the two most significant new entrants in the global economy. India, in particular, offers a lot of dynamism right now and a lot of opportunity for collaboration between the United States and India. We live in a time when interdependence between countries is also very significant. It's a very exciting time."

Knetter looks to students, particularly Indian American students, graduating during the next few years as tomorrow's leaders in maximizing the collaboration opportunities with India. "The future holds a lot of promise and opportunity as India continues to emerge and develop and find its niche in the global economy," Knetter said. "From a business dean perspective and the perspective of an international economist, I think it's a wonderful opportunity for young people today. I think it is only natural that some of the young people from the Indian American community be the leaders of that collaboration and interaction."

The AIA honored seven students who are graduating from high school or college. Perhaps some of these students, as measured by their achievements, could possibly help lead the development of these new levels of collaboration on the international level. The 2005 AIA graduate honorees were the following students:

Ashutosh Gupta, graduating from Memorial High School, is the son of Kumud and Shiv Gupta. Ashutosh is a finalist in the National Merit Scholar Program and also a National AP Scholar. He is a 2004 National Physics Olympiad semifinalist, one of only 200 students in the country. He is a Lincoln Douglas Debate participant and a member of the National Honor Society. Ashutosh was involved in building a robot and participated in the National Robotics tournament sponsored by NASA in 2004 and 2005. He expects to complete more than 65 credit hours of course work towards his undergraduate degree before graduating from high school. He is planning to attend the University of Wisconsin-Madison and pursue further studies in economics and business.

Akshay Jha, graduating from Memorial High School, is the son of Sarita and Somesh Jha. Akshay is a National Merit Scholar Program finalist. He was a runner up in the state tennis tournament and represented Memorial at the tournament. He is entering Carnegie Milan University and is considering economics and math as major areas of study.

Anjulie Palta, graduating from West High School, is the daughter of Mari and Jiwan Palta. Anjulie belonged to the Senior Dance Team of the Madison Performing Arts Dance Studio and has designed art pieces for the West High School Gallery and a sculpture to enhance the environment at West High School. One of her art prints will be displayed in a new building in downtown Madison. Anjulie has done volunteer work at the Humane Society and at Wis. Public Radio and Television. She has also been a peer tutor at West and a teaching assistant for mathematics. Anjulie will attend the University of Minnesota as a pre-architecture student, but is keeping all her options open.

Aashu Patel, graduating in the top 10 percent of her class from Verona Area High School, is the daughter of Asit and Sandhya Patel. Aashu has been involved in DECA, Art Club, Spanish Club, National Honor Society, and the Peer Mentor Program where she tutored her peers in math and science. She has also volunteered at Verona Public Library. In 2004, she helped organize an Intergenerational Prom for Senior Citizens at Oregon High School. She has shared her culture with the local community by performing various dances at the Annual Variety Show held at her high school. During her four years at Verona Area High School, Aashu has managed to receive Highest Honors every semester, while working part-time at Miller and Son's Supermarket and at Walgreen's as a Pharmacy Technician, along with babysitting. She will attend the University of Wisconsin - Madison and study biochemistry or pharmacy.

Sonali Ray is graduating from Memorial High School with High Honors. He has been active with the Memorial Forensics Team and the Golf Team for the past three years. Sonali has volunteered with St. Marys Hospital for four years. He conducted research work with Donna Peters at UW-Madison. Sonali will attend UW-Madison and is considering biomedical engineering as his major.

Richard Bhamb, graduating from Middleton High School, is a National Merit finalist and plans to attend Northwestern University.

Ankur Sharma graduated last semester from UW-Madison with a degree in biomedical engineering. He is enrolling in the Carlton School of Business to pursue a graduate degree in health administration.

In the days following the AIA banquet, The Madison Times conducted an interview with Dean Knetter over the Internet on developments in the regional economy of Asia and the global economy. Before becoming the dean of the UW-Madison Business School in July 2002, Knetter was the associate dean of the MBA program and professor of international economics at Dartmouth College. The following are excerpts from that interview:

TMT: It appears that India and mainland China are playing an ever-increasing role in the regional Asian economy and the international economy as a whole. I read recently that China surpassed Japan in exports to the United States for the first time and many American companies are moving some or all of their manufacturing plants there such as Trek Bicycle, which is currently building a plant near Shanghai, I believe. And a great deal has been written about the outsourcing of jobs to India. Are these two economic players going to be the dominant forces, surpassing countries like Japan and Malaysia, which have, I think, strong economic ties to the United States?

Knetter: India and China are wonderful partners for U.S. engagement precisely because they are at very different stages of development than we are. In China, the U.S. is able to tap into a low-cost workforce that can help assemble products that are often conceived, designed, and marketed from headquarters operations in the U.S. to the global marketplace. Without that access to affordable labor for manual tasks, we could not retain competitiveness.  

India is an attractive partner for slightly different reasons. There is a segment of the population that is well educated and fluent in English, which makes for productive partnerships in many "new economy" businesses. Once again, the markets we can tap with these software and telecom businesses are global and combining our ideas and workers with their capabilities is a potent mix for U.S.-headquartered leaders of the new economy.  

Japan offers neither low-cost labor nor a labor force fluent in English, so the partnership is more limited. We mostly interact through capital markets - we are a home for their investment and they are a net supplier of funds to us. Malaysia is more similar to India or China in its stage of development, but cannot match the scope of China or the basic education level found in India.

TMT: Will China's economy ever become as large as or surpass the U.S. economy?

Knetter: Since their population is four times the U.S. population, it is very likely that the size of the Chinese economy will exceed the size of the U.S. economy fairly soon in the aggregate. I do not foresee China surpassing the U.S. in per capita income for the foreseeable future (and even some of the unforeseeable future!).

TMT: With U.S. investment in China, is the first question irrelevant?

Knetter: To me it is not terribly relevant whose economy is bigger. What is relevant is whether we are achieving good living standards without damaging our environment. One country's growth does not come at the expense of another unless the growing country is causing significant negative externalities for neighbors through pollution, etc. But China becoming more efficient does not make us economically worse off; it makes us better off in many ways. China's development is likely to affect the political balance of power and that may have more significant consequences for world welfare.

Your question intimates another reason why we might not care so much - that we are becoming a global economy and have an ownership stake in each other. I think it still matters how we feel about local conditions, but not as much as it did before we were more open to exchange.

TMT: To what extent will the global economy make national borders or nationalistic considerations obsolete?

Knetter: I do not foresee a time when local conditions will be obsolete.