The Indian family business model is key to the nation’s growth, according to noted economist and corporate advisor S Gurumurthy. Instead of aping Western models, businessmen should understand the culture that drives our economy, he said.
Addressing Confluence 2012, organised by Metis Family Office Services Pvt Ltd here on Friday, Gurumurthy stressed the need for intellectual re-engineering of Indian businessmen so that they can understand the depth of their civilization.
He said the current global crisis is the result of the collapse of the family system in the West. “This resulted in a lower bank balance and more borrowing, resulting in more consumption and more debt,” he said.
“India’s economy grew not due to foreign investment but due to family businesses,” he said, and rued the fact that India management graduates are unaware of it. Instead, they consider family businesses as inferior, he said.
Hitting out at political economist Max Weber and social scientist Karl Marx, he said they made comments about India without visiting the country and we believed them. “It is intellectual slavery. When our minds get clogged we can’t do business with pride,” Gurumurthy added.
Culture builds a nation and erosion of it destroys a nation, he said, adding that India has to internalise its cultural power. In India, it is estimated that 95 per cent of registered firms are family businesses. Just 13 per cent of the family businesses survive till the third generation and only four per cent go beyond the third generation.
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