Tuesday, May 13, 2014
President Daniel Papp, Provost Ken Harmon, Deans of respective colleges, and honored guests, thank you for inviting me to deliver the commencement speech for the Class of 2014. I am both honored and humbled at the same time.
My congratulations to the graduates, their families, friends and significant others. It is the best investment you have made because the unemployment rate among college graduates is 4.5% as compared to 14% among high school graduates. And the average salary for college graduates is $58,000, as compared to $34,000 for high school graduates. And this does not include opportunities for entrepreneurs!
I came to the United States as a foreign graduate student in 1961 at the University of Pittsburgh and joined the faculty of Columbia University in New York in 1963. In those days, my colleagues did not know how to pronounce Indian names. So I was given a nickname Jag, as in Jaguar. Ever since that association, I have been dreaming of owning a Jaguar with a license plate of “Jag’s Jag.” And that dream became a reality 15 years ago when I turned 60.
I am now seventy five years old. Do I look seventy five? Of course not. That is because in marketing, the first thing you teach is that it is all about packaging! That Grecian formula “16” goes a long way!
Back to my Jaguar story. I have two grown up children, both married. And they surprised me on my 60th birthday! I do not count my birthdays. I still remember going out to the driveway on a Saturday morning to collect my local newspaper, and as I turned around, I saw this beautiful Jaguar, top of the line (XJ Model), even the color I like, parked in the driveway with a handwritten note “Happy 60th Birthday” and a handmade license plate “Jag’s Jag.”
Unfortunately, it was a rental car! Yes, I am still looking for my Jaguar and now that Jaguar brand is owned by an Indian multinational (Tata Motors), I am hoping they will give me a Jaguar as a gift!
I do this introduction so that you get used to my accent.
In fact, my accent was far worse when I started teaching nearly 50 years ago. In order to be understood, I would go to the blackboard and write the words and phrases hoping the students would understand. Then one day, a student raised his hand and said, “Sir, your handwriting also has an accent!”
You are really fortunate to inherit a future with more opportunities than ever before. And these opportunities are created by three trends. These trends are generating not only traditional jobs but also creating opportunities for entrepreneurs.
The first is changing demographics. I will talk about the three demographics; aging of the population; working women households and increasing ethnic population.
For the first time in our history, we have five adult generations living at the same time. This is because we are simply living longer. The fastest growing segment is centenarians: those who live to hundred or more years. Today, there are more than quarter of a million and growing. And have you noticed? They all want to drive! And no, they will not be in Florida alone. They will be in every neighborhood.
As we grow older, we worry about our health and wealth. As a consequence, healthcare industry is growing faster than the economy. It was 8.5% of GDP in 1980; it grew to 12% in 1990; it became 15% of the GDP in 2000; and it will likely grow to 20 percent of the American economy. It has already crossed $2 trillion dollars.
At the same time, 10,000 people are retiring every day and this trend is expected to continue for the next twenty years. This means we will have 3.65 million jobs from existing industries each year for the next twenty years. About one third will require college education and preferably a degree. That means there will be replacement demand for more than 12 million jobs each year and will result in a shortage of talent.
A second and even more powerful demographic change is working women households. 75% of all women with children at home are now working, and majority of them are working fulltime. As more and more women work outside the family, it is creating new commercial opportunities. For example, the biggest outsourcing is not just corporations outsourcing their IT and HR functions, but ordinary families outsourcing cooking, cleaning and child care.
Today, consumers are eating out more often and what they eat at home are mostly ready to serve foods or snacks. Out of three meals a day, we are now eating out one & a half meals per day and the meals we consume at home are fully prepared and ready to eat. Home delivery of prepared foods is here. My estimate is that the outsourcing of home services will exceed $20,000 per household and given the number of households, it will exceed $2 trillion dollars per year in the near future. And this is highly unorganized and cottage industry. It will eventually be branded and marketed just like cereals, detergents and appliances.
And when the spouse is working fulltime, what happens to time? There is both a time shortage and time shift. Monday through Friday between 8am and 5pm, who is at home? The answer is nobody. Even the dog is gone!
Who cleans the house? While maid services are growing, many families can’t afford them. So who cleans the house? The answer is nobody. In fact, in my house, I often invite guests, not only for just company, but so that the house gets cleaned! We sort out the magazines, dust the shelves and hide things in closets to make the house presentable!
It is interesting to note that anything we give up as a daily necessity or activity, it always comes back as a hobby! For example, hunting, fishing, gardening, baking bread and now cooking. Have you seen the popularity of the Food Channel? Will house cleaning come back as a hobby? What do you think?
A third demographic trend creating great opportunities is the increasing ethnic diversity. By 2030, the United States will become a non-white majority. California, the largest state, is already a non-white majority, and will soon be followed by Texas and Florida. Therefore, what was sold and consumed in ethnic specialty markets is becoming main stream.
It is interesting to note that the most popular convenient food in England today is the Indian curry. It has replaced fish and chips. Similarly, salsa is replacing ketchup and tortilla chips are replacing potato chips.
In short, we are truly becoming a multicultural society. Not only understanding, but embracing this diversity in the market place, as well as the work place will become increasingly necessary.
I still remember my own experiences of being immersed in the American culture as a foreign graduate student.
My business school had a dress code: dark suit, white shirt and dark tie. I had no white shirts. Therefore, I went to the local department store in Pittsburgh (I think it was Kaufman’s) and asked to see the white shirts in my size. After selecting the shirt, I asked the salesman, “How much?” He answered, “$5.00.” My instinctive reaction was, “How about $2.50?” That is how I used to haggle in India for every purchase. I still remember the stunned look on the salesman’s face. I thought he was trying to bargain hard. So I said, “Listen, my friend has meter parked his car on the street and we really don’t have much time. Final offer $3.00; take it or leave it.” Of course, I learned that prices in America are fixed and the salesman has no discretion in negotiating the price!
A second major trend is globalization. This is generating lots of opportunities. The biggest growth lies with large emerging markets, such as China and India. For example, a recent study by Boston Consulting Group (BCG) has forecasted that China and India will become a $10 Trillion dollar consumer market by the year 2020, as measured by what is referred to as Purchasing Power Parity (PPP). A Chinese consumer born in 2009 will consume 38 times more than a Chinese consumer born in 1960. Similarly, an Indian consumer born in 2009 will consume 13 times more than an Indian consumer born in 1960.
Therefore, future growth of American companies and our economy will be directly tied to these emerging markets and while it is China and India today, it will be Africa tomorrow.
At the same time, multinationals from emerging markets are becoming global competitors. For example, InBev (a Brazilian company based in Belgium) is the largest beer company in the world, followed by SAB from South Africa. So is the case with Lenovo from China and Tata Tea from India.
This means you may be working for an American company in a foreign country. Or, you may be working for a foreign company in the U.S.! Either way, you have to have a strong understanding and develop interest in international markets, cultures and politics. You have to have a global mindset.
The final trend is technology and especially the internet. Just as railways, automobiles, telephone and television transformed our lives, so will the internet. In fact, it will transform our lives to a level we have not yet imagined!
Just think that there was no Google, Facebook, Skype or LinkedIn until the beginning of this millennium (year 2000).
And, have you heard the story of WhatsApp? A company with only 50 employees, but 400 million subscribers in now offered $19 Billion by Facebook! There has never been a better time for entrepreneurship. In fact, the internet is really the first technology that has democratized techno-entrepreneurship. Any one can be an entrepreneur, whether you are Bill Gates, Steve Jobs or Mark Zuckerberg! We have produced more than one million millionaires in the last twenty years alone; and quite a few billionaires!
So what is my advice to you? First, make sure you engage in social media as much with your grandparents (and great grandparents) as with your friends! Remember, they have the money!
Second, make sure you make friends with strangers. You never know any one of them may be the next Mark Zuckerberg, Sheryl Sandberg or Jack Ma (Alibaba Founder in China).
Third, just as the Army slogan says, “be all that you can be,” go ahead, and do the bungee jump! This is the golden time to be an entrepreneur.
Fourth, at the same time, make sure you continue to keep your bedroom in your parent’s house. You will need it in between career and life transitions.
Finally, and more seriously, commit yourself to give back to the society. As your family, friends and society at large have nurtured and invested in you to enable your college education, it is now your responsibility to give back in any way you can.
There is nothing more meaningful or powerful than human potential. For example, if you take a grain of wheat and make it into a loaf of bread, the value-add is about 3 times. Similarly, if you take a rough diamond and polish it to get its brilliance out, the value add is about 10 times. However, if you take a human being, the value add is infinite!
I can say this with conviction because I am one of them. I was born in 1938 in Burma to an Indian merchant family. When Japan took over Burma in the late 1940s, we became refugees and returned to my native state of Gujarat in India.
I would have been a shop keeper with less than a high school education and probably earning about $2500 per year, and I would have been happy, because I did not know my own potential. Through a series of dislocations, I got out of my comfort zone, learnt English and decided to be an educator.
My family (especially my older sisters) and my teachers nurtured me and like good diamond cutters, they gave me the values, discipline, courage and purpose for me to be the first in my family to get a college degree, and eventually become an educator.
I know every one of you can help others who are less fortunate. If you make a conscious effort to nurture them, they will also realize their potential. I find giving back while you are alive is more fun than after you’ve died! Material wealth without meaning is meaningless. The most meaningful purpose in life is to make ordinary people extraordinary.
Thank you and as they say in Star Wars, may the Force be with you! Again, congratulations for achieving a major milestone in your life’s meaningful journey!