I had the distinct and humbling pleasure of hearing Mr. Kumar, Chairman of Tata Coffee and Vice Chairman of Tata Teas and Hotels, Tata Sons Ltd., share his thoughts on next gen capitalism. Tata is first and foremost a global, diversified holding company and probably best known to us in the Americas as the new owner of luxury auto brand Jaguar. Mr. Tata spoke to his belief that the current economic collapse will and should lead to a new form of ‘capitalism’ built around several key themes:
1. Affordability – as the key engine of innovation not cultural fit. The most fundamental issue facing the developing and - increasingly as of late - developed world economies is one of income level vs. price of goods. This year, the company is launching the Tata Nano a $2,000 car – yes $2000 not a typo - which makes me wonder what plans Detroit has lying in wait to resuscitate itself!
2. Ethics – “we must take that which is wrong and change it.” The avarice and greed that has tipped the worlds economies into their current state of chaos require a “moral compass in imperialist times.” Mr. Kumar made a compelling case for the fundamental need to balance growth with ethics in the creation a new capital order. Two-thirds of Tata group foundation profits are donated to building interests that benefit the people and commerce of India…and I had to think very hard how many North American companies might pursue a fraction of that balance.
The concept of ‘capitalist balance’ is a compelling thought. It does fly in the face of the notion of ‘free market economy’ as CNBC pundits would describe it, but I’m curious to hear your thoughts on the issue.
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