04 May 12 Why politics deserves greater mindshare of CI in India

Politics affects business in very real ways, and this is becoming increasingly apparent in India.

In recent weeks, corporations have been screaming hoarse about the impact of poor governance on business. In India governance is related inextricably to politics. Some headlines in the last week alone…

• Telenor writes off Rs 3,500 crore India assets …saying “the uncertainty has increased significantly”
• Honeywell Warns India Is Scaring Away Foreign Investors
• India’s Steel Dreams Are Dying – “I feel sad. I feel a bit concerned,” Arcelor chairman Lakshmi Mittal said about the stalled projects
• Ruchir Sharma’s new book gives India a 50:50 chance to emerge as a breakout nation

It is the job of competitive intelligence professionals to scrutinize all aspects of the business environment. If politics is a significant part of the environment, then that needs to feature in the analysis too. While CI has many tools and frameworks for analyzing the market, competition, industry forces, etc., tools for analyzing the political landscape are relatively weak.

Many of us (and I too plead guilty) find it easier to simply skip the “politics” section of the newspaper, than track the seemingly unending stream of murky scandals, name-calling, mud-slinging, corruption, and just plain incompetence of the politicians and bureaucrats.

The IT software industry in India grew “despite the government”, as many put it. This, in part, has led to the segregation of politics and business into separate compartments in our minds. “India will continue to grow regardless of which party forms the government” was heard before every election in the last decade or more, perpetrating this divorce of business from politics.

Typically competitive intelligence studies for evaluating a market entry in India delve on the market, competition, trends, and regulation, but dedicate only a short sections to “government & political stability”. The fact is that policy and regulation is very closely related to politics and government. If CI wants to be truly “actionable”, it needs to incorporate politics and its impact on government policy and regulation more directly, particularly in the current scenario.

The government (and hence politics) has very direct bearing on many of the industries that are expected to drive growth in India, going forward. This is certainly true for infrastructure and affiliated industries.  Further, many technologies are changing rapidly, calling for faster revisions of regulations and policies. There are very few industries (if any at all) that are insulated from government and politics.

Competitive intelligence analysts in India therefore need to better incorporate politics into their analysis frameworks. I have yet to see a robust framework for this. Do you have one? If so, please do share it…