C K Prahlad's Analysis

Impact of US recession to last just 2 yrs

    THE recession in the US could open up opportunities in emerging markets such as India which have a huge consumer base to be tapped at the bottom of the pyramid. More work could be outsourced here when the ailing financial sector in the US consolidates, said CK Prahalad, management guru & professor of corporate strategy at the University of Michigan. 

    The real economy in the US has slowed down in the aftermath of the financial crisis triggered by the subprime mortgage mess. Mr Prahalad reckons the impact of recession on business there may last only for about two years. 
    “People have lost trust in organisations due to the crisis. The new administration there is expected to take efforts to restore the trust in about 18-24 months,” he said on the sidelines of a seminar hosted by the Indian School of Business in partnership with IIMs and other business schools and corporations. According to him, the crisis went out of hand as regulators and managers ignored fundamentals. “Researchers may not be able to come out with instant solutions for this kind of a deeper financial problem. But they can point at the opportunities arising out of this crisis,” he said. 
    Entrepreneurship is a proven concept in the country and many corporate houses like ITC and Airtel have come out with business models to explore opportunities at the grassroot level.