[SM: Business Week’s Cover Story on India’s Infrastructure troubles, in my opinion, are being addressed seriously by the government and public-private collaborative efforts. We will cover this in more detail later. Dominique’s piece raises some other questions that are not being addressed as aggressively by India.]
I just came back from a trip to China and am scheduled to go back in a couple of months, once if not twice. I spent four weeks in India every year in the last 2 years and expect to continue at that pace. On the flight back from Shanghai, I was thinking about the factors that will influence this neck-to-neck race towards world economic dominance.
Where I see similarities is that both countries do a good job mapping and executing on big infrastructure milestones, such as huge ports, airports and airlines, cellular networks, etc.
Where I see the biggest difference is the way China tackles strategically its core challenges:
* Raw materials: China filled up a role gap left by the West in Africa and has become very active in the development of Africa to secure a stable raw material supply including oil.
* Education: In the long run, the quality of education is THE key factor for economic development and growth. The Chinese government has reviewed its needs in schooling and universities, figured out that they could not build the classical teaching infrastructure fast enough, and has decided to build the largest online education capability on earth. India has a first class education system for a select section of gifted children, but it doesn’t scale. China could leapfrog every single country and scale a world class on-line education capability in a few years.
* Electricity: India has massive projects to expand its electricity grid, including nuclear energy plants. On the other hand, electrical power is unreliable today in India and causes significant disruptions. It is amost considered as normal there. In contrast, China seems to have a stable electrical grid.
* Water: One can hardly drink tap water in India while China is looking at seawater desalinization on an economic and very large scale to support its drinkable water needs. [See one of my favorite young companies in this field, Energy Recovery, that works closely with China.]
* Pollution: In addition, I see China very involved in other green technologies. I would not be surprised if China came out with a killer solar-powered car in the next 5 years. In contrast, I see Tata, in India, focused on designing and producing a $2,000 gas powered car. Can you imagine what tens or hundreds of millions of those will produce in terms of CO2 emission?
Culture, organization and value system are what will determine the winner in this race towards a stable, sustainable and non-self-polluting economic titan.
China reminds me a little of Germany in the 20th century and in the Industrial Revolution: very organized, very focused and determined, facing trade-offs head-on and being gutsy on a large scale to leapfrog everybody. Chinese engineers are very good at reverse engineering the best hardware and reproducing it at lower cost. For the future, China also reminds me of Singapore with its very systematic and well thought through world class technology development, education and environment protection.
India reminds me of Italy in the 15th century, with its creativity, individualism, talent, spirituality, respect of its cultural heritage … and systemic chaos. It is not by accident that India produces herds of very talented software developers as it takes a fairly unstructured thinking to excel in this field. I was not surprised to see a dozen of biotech start ups, founded by Indians, leveraging the most diverse genomic pool in the world. I predict that, beyond software, India will become a world power in biotech over time.
At the end of the day, China and India will probably follow their DNA and develop themselves very differently, in a complementary manner. Two great countries. Two great histories. Two great cultures.
The remaining question: how will the US and Europe maintain their privileged economic positions in this race?