What Have The Germans Ever Done For Us?
Raj Persaud Consultant Psychiatrist
As we teeter on the edge of the financial abyss – pulled over the edge by those friendly relaxed places where we love to vacation; the Greeks, the Spanish and the Italians – we are now forced to desperately reach for a lifeline from… the Germans. It was the hated Germans who always got the best deck chairs first, so now at last, we can see a link between being first on the beach, and an economy delivering.
No one had a nice word to say about the Germans for the last, say, seventy years or so. How things have changed. Now we need them, we cuddle up to them; when was the last time you saw a World War II film on TV? This Christmas, ‘The Great Escape’ might, for the first time, not make an appearance.
We need the Germans because their economy is the strongest and largest in Europe and therefore, uniquely, has the capacity to save the whole continent. If they bailed out of the Eurozone; would the last person to leave please switch off the lights?
Does the dramatic attitude change to the ‘old enemy’ hold any lessons for Asians in the UK? It seems an odd comparison, but, in fact the Eastern part of the UK economy is probably more dynamic compared to the rest. But the Asian success story has also attracted simmering envy. Part of the psychological dynamic is that people who come over here with nothing, and build a business empire despite facing endemic discrimination, force the rest of us to ask difficult questions about what we’re doing with our own lives.
The Asian sector will not only weather the recession better than the rest of the system – it’s possible that the UK PLC now desperately needs the drive and entrepreneurial spirit of its Asians and other immigrant entrepreneurs, more than ever before. After all, here in the UK we don’t lead the world in mining coal or building cars any more… until Tata came along and saved Jaguar? As we are busy dismantling the Financial Services sector – because of Banker Bashing – the last endeavor we were any good at – what is the UK Economy left with?
All across the world, it doesn’t matter which country you examine, academic research finds its immigrants from three countries that come top over and over again on entrepreneurial success – China, India and Korea. In the US, the latest estimates are that some 70% of all new products and 80% of all new jobs each year stem from the small business/entrepreneurial sector. In 2002, ethnic minorities owned approximately 18% of the 23 million US small businesses firms. Asian Americans comprised 12.4% of all
minorities, but owned 26.9% of all US minority firms. Indians found 15% of all Silicon Valley start-ups.
Self Employment rates have declined over time in most advanced economies across the world, including the USA, yet the one major exception is the UK, which has experienced growth from 7.7% in 1956 to 11.5% in 2002. This might be something to do with the unique Asian immigration that applied to the UK during this period.
Social scientists Ken Clark from the University of Manchester and Stephen Drinkwater from the University of Surrey report, after inspecting the latest UK census data that for men, self-employment rates are 17% for indigenous Whites, 13% for Black males from the Caribbean or Africa, but for Indians the rate is 21%, Pakistanis 27%, Bangladeshis 19% and Chinese 28%. Some cultural factor is therefore theorised by academics to explain the entrepreneurial spirit and success of some ethnic minorities, compared to others.
David Blanchflower from Dartmouth College in the USA, an eminent economist who specializes in entrepreneurship, reports data that suggests being your own boss is generally a popular option, no matter what race you are, but few appear to have the gumption to make the leap. In the UK 45% of all employees would prefer to be self-employed, the figure rises to 71% in the more entrepreneurial USA. In fact deep down, most want to be more Asian!
Masud Chand and Majid Ghorbani from the Wichita State University, Kansas and School of Business, Renmin University of China have just published data in International Business Review which finds that the overseas Indians are now one of the largest immigrant communities in the world, with 30 million Indians living abroad generating an annual income of US$160 billion, which is equal to 35% of India’s GDP.
This is, in numbers, second only to the overseas Chinese community, which
has been estimated to be 40 million with a combined annual income of over US$600 billion. Through family, kin and dialect ties, contend Chand and Ghorbani, the overseas Chinese have created a virtual ‘nation without borders’, generating wealth only marginally less than that of mainland China.
If it’s the emerging economies of China and India which are going to save the global economy, what a windfall it would be to boast some of that economic powerhouse magic inside your own borders?
In 2003, Goldman Sachs predicted that by 2035, India will be the third largest economy of the world, behind US and China. If the growth of Asians outside of the sub-continent continues to grow as fast if not faster, then the presence of this kind of immigrant in your economy, is the equivalent of discovering oil or gold.
The Americans already realize this, which is why you increasingly find Indians as CEO’s of large US homegrown firms; companies as American as Apple Pie such as Pepsi (Indira Nooyi), Adobe (Shantanu Narayen) and Citigroup (Vikram Pandit).
If the Europeans think they need Germany then in fact – in the longer term – they’re wrong. What they need is a slice of Chinese and Indian magic, and it’s the UK that’s in the best place to give them that.
Dr Raj Persaud is a Consultant Psychiatrist in Private Practice at 10 Harley St and will be chairing an event at Kala Sangham, Bradford, on Friday October 21st to celebrate of the Indian publication of The Moonstone Legacy by Diana de Gunzburg and Tony Wild with live music, South Asian dance and Q & A. Details at www.kalasangham.org