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Alumnus speaks on U.S., India Relationship

Emily McConville | Thursday, November 14, 2013

Notre Dame alumnus Tim Roemer spoke Wednesday about the advances in technology that have transformed interaction and communication between the United States and India.

Roemer, a Notre Dame alumnus, former U.S. Congressman [D-IN-3] and former Ambassador to India, spoke on the nature and importance of the United States’ interactions with India. The lecture, titled “Twitter, Buffett, and Darwin: India and the United States Relationship,” was the second installment of the Distinguished Lecture Series, co-sponsored by the Liu Institute for Asia and Asian Studies and the Kellogg Institute for International Studies.

As India’s economy develops and its middle class grows and becomes more and more successful, Roemer said the country is becoming one of the biggest markets in the region for innovative technology. India also is home to a large number of English speakers and maintains a good relationship with the U.S, Roemer said.

The region as a whole has an emerging middle class that is bigger than the entire U.S. population, he said.

To illustrate the opportunities technology provides to that middle class, Roemer showed a photograph of a woman wearing traditional dress, carrying a metal pot on her head and talking on a cell phone, which he said would have cost $15. The woman, Roemer said, along with a hundred others, was transporting dirt from a construction site.

“She is a small-business owner,” Roemer said. “She’s on this phone while she’s working at this job, and she is calling, as a small-business owner who grows flowers – she on that phone is hiring two new people because she just got a text from Twitter that the price of flowers has gone down, and she can afford two new employees. … That phone is life-changing for that woman, as a business owner.”

Roemer said the elevation of millions of people from poverty to the middle class has impacted hugely both business and trade. If India’s economy continues to grow – which, he said, is not guaranteed – multinational firms are going to shift their focus to Asian markets.

“If you are an international business and you want to succeed in the next 30 or 40 years, are you going to keep selling in the U.S. and EU and depend on 50, 60, 70 percent of your sales there, or are you going to expand into those markets right there?” Roemer said. “That’s this middle-class migration that is absolutely essential for the U.S. to get a hold of, to understand, and to entice our manufacturing companies to create jobs here . . . there is a real incentive, given these trends, to do more and more manufacturing in the U.S. and export these products into these new middle-class markets so you can see the resurgence of American products in the U.S.”

Roemer said that the development maintenance of a good relationship between the U.S. and India, especially India’s rising middle class, is crucial.

He said the past three U.S. presidents have cooperated closely with India regarding national security as well as trade. The governments of both nations recently have “supported generally a health U.S.-India relationship,” he said.

Despite problems like border disputes with Pakistan, inflation, and rising food prices, trade between the two countries is increasing, Roemer said.

Roemer outlined three models for companies to emulate in order to take advantage of this relationship.

First, he said the “Warren Buffett Model,” is best exemplified by General Electric [GE]. GE CEO Jeffery Immelt often holds board meetings in India to expose members to the country, culture, and market, he said.

“Immelt has been very, very smart about teaching his company and getting some of his best leadership to go to some of these places,” Roemer said. “If you want to run the company and you haven’t had one of those tough assignments, … if you have run the company, and you’ve been president of India, of Nigeria, of Indonesia, you really are going to see where the future of GE is.”

Second, Roemer said the “Winston Churchill Model,” is best exemplified by Starbucks. CEO Howard Schultz tried to enter India in 2005 but was not successful, he said. In 2010, however, Starbucks returned. But, the company made several fundamental changes, such as partnering with Indian companies and using domestic products. 

“He figured it out, and that is the Churchill Model – try it, don’t ever give up, come back again and again,” Roemer said. “That’s Churchill’s great commencement speech – never ever, ever, ever, ever give up. Schultz did not, and I think he’s onto the right thing now, and I think he’s going to succeed in India.

Third, the “Darwin Model,” is an “evolutionary model” best exemplified by IKEA, he said. When it entered the Chinese market, Roemer said Ikea changed almost everything about how it presented its products, from its value proposition to its promotions to where it manufactured its products.

“You have a completely different model for almost every value network and category from Europe to China. IKEA is just going into India now, and it will be a hybrid of these two approaches,” Roemer said. “It will change again.”

The U.S.-India relationship is positive now, Roemer said. This relationship will remain important because India is civically engaged, religiously diverse, and respects the rule of law, he said.

“That potential influence in the entire region as India grows in confidence, as India grows in influence, as India grows in articulating its foreign policy and working with other countries is absolutely and potentially profound in the future,” Roemer said. “I’m betting that future presidents are going to see this, see the economic and religious and political advantage and continue to make this one of the most important relationships in the world.”

Contact Emily McConville at emcconv1@nd.edu.