Saturday, December 11, 2004
THOMAS L. FRIEDMANPublished: March 21, 2004
ARTICLE TOOLS
My favorite building in Bangalore, India's Silicon Valley, is a corporate complex called the "Golden Enclave." In some ways, the whole tech sector in Bangalore could be called India's "Golden Enclave" — disconnected from the country's bad governance, as companies create their own walled enclaves, with their own electricity, bus service, telecommunications and security, and disconnected from the countryside, where many Indians still live in abject poverty.
As long as these two liabilities of inept governance and endemic poverty are not addressed, India can't really take off and become a big-time technology competitor of the United States. The information revolution, though, has given India, for the first time, some real resources and tools to address its chronic ailments. Will it seize this opportunity? This is India's "to be or not to be" question.
Says Vivek Paul, president of the cutting-edge Indian software giant Wipro: "In some sense, all that this globalization of information technology and [outsourcing] has done is to give India pin money to reform itself." If India "blows it," well, the opportunities may still be out there, "but India won't be a beneficiary in the long run," he said. "The beneficiaries will be those who are most flexible and able to organize themselves around the opportunities." Mr. Paul said he believed India would seize this moment.
But it will require some radical changes in politics: While India has the hardware of democracy — free elections — it still lacks a lot of the software — decent, responsive, transparent local government. While China has none of the hardware of democracy, in the form of free elections, its institutions have been better at building infrastructure and services for China's people and foreign investors.
When I was in Bangalore recently, my hotel room was across the hall from that of a visiting executive of a major U.S. multinational, which operates in India and China, and we used to chat. One day, in a whisper, he said to me that if he compared what China and India had done by way of building infrastructure in the last decade, India lost badly. Bangalore may be India's Silicon Valley, but its airport (finally being replaced) is like a seedy bus station with airplanes.
Few people in India with energy and smarts would think of going into politics. People don't expect or demand much from their representatives and therefore they are not interested in paying them much in taxes, so most local governments are starved of both revenues and talent.
Krishna Prasad, an editor for Outlook magazine and one of the brightest young journalists I met in India, said to me that criminalization and corruption, caste and communal differences have infected Indian politics to such a degree that it attracts all "the wrong kind of people." So India has a virtuous cycle working in economics and a vicious cycle working in politics. "Each time the government tries to put its foot in the door in IT [information technology]," he said, "the IT guys say: `Please stay away. We did this without you. We don't need you now to mess things up.' "
That attitude is not healthy, because you can't have a successful IT industry when every company has to build its own infrastructure. America's greatest competitive advantages are the flexibility of its economy and the quality of its infrastructure, rule of law and regulatory institutions. Knowledge workers are mobile and they like to live in nice, stable places. My hope is that the knowledge workers now spearheading India's economic revolution will feel compelled to spearhead a political revolution.
There are signs. Consider Ramesh Ramanathan, an Indian-born former Citibank executive, who returned to India to lead an N.G.O., Janaagraha, dedicated to improving local governance.
India's independence revolution in 1947 began in urban India and its political reform revolution is also going to begin in urban India — "this time fueled by the forces of globalization," he said to me in his Bangalore office, surrounded by young volunteers. "Globalization is creating the affluent urban Indian who is going to demand more from government and is not going to be content with islands of affluence. [Because] it will be impossible for them to fully take advantage of the opportunities globalization is giving them without airports and roads and sidewalks . . . acceptable in any city in the world. And the only way they are going to get that delivered is if they get engaged in government. We have [in India] a motto: `Elect and forget.' And what we need is to `elect and engage.' "
ARTICLE TOOLS
My favorite building in Bangalore, India's Silicon Valley, is a corporate complex called the "Golden Enclave." In some ways, the whole tech sector in Bangalore could be called India's "Golden Enclave" — disconnected from the country's bad governance, as companies create their own walled enclaves, with their own electricity, bus service, telecommunications and security, and disconnected from the countryside, where many Indians still live in abject poverty.
As long as these two liabilities of inept governance and endemic poverty are not addressed, India can't really take off and become a big-time technology competitor of the United States. The information revolution, though, has given India, for the first time, some real resources and tools to address its chronic ailments. Will it seize this opportunity? This is India's "to be or not to be" question.
Says Vivek Paul, president of the cutting-edge Indian software giant Wipro: "In some sense, all that this globalization of information technology and [outsourcing] has done is to give India pin money to reform itself." If India "blows it," well, the opportunities may still be out there, "but India won't be a beneficiary in the long run," he said. "The beneficiaries will be those who are most flexible and able to organize themselves around the opportunities." Mr. Paul said he believed India would seize this moment.
But it will require some radical changes in politics: While India has the hardware of democracy — free elections — it still lacks a lot of the software — decent, responsive, transparent local government. While China has none of the hardware of democracy, in the form of free elections, its institutions have been better at building infrastructure and services for China's people and foreign investors.
When I was in Bangalore recently, my hotel room was across the hall from that of a visiting executive of a major U.S. multinational, which operates in India and China, and we used to chat. One day, in a whisper, he said to me that if he compared what China and India had done by way of building infrastructure in the last decade, India lost badly. Bangalore may be India's Silicon Valley, but its airport (finally being replaced) is like a seedy bus station with airplanes.
Few people in India with energy and smarts would think of going into politics. People don't expect or demand much from their representatives and therefore they are not interested in paying them much in taxes, so most local governments are starved of both revenues and talent.
Krishna Prasad, an editor for Outlook magazine and one of the brightest young journalists I met in India, said to me that criminalization and corruption, caste and communal differences have infected Indian politics to such a degree that it attracts all "the wrong kind of people." So India has a virtuous cycle working in economics and a vicious cycle working in politics. "Each time the government tries to put its foot in the door in IT [information technology]," he said, "the IT guys say: `Please stay away. We did this without you. We don't need you now to mess things up.' "
That attitude is not healthy, because you can't have a successful IT industry when every company has to build its own infrastructure. America's greatest competitive advantages are the flexibility of its economy and the quality of its infrastructure, rule of law and regulatory institutions. Knowledge workers are mobile and they like to live in nice, stable places. My hope is that the knowledge workers now spearheading India's economic revolution will feel compelled to spearhead a political revolution.
There are signs. Consider Ramesh Ramanathan, an Indian-born former Citibank executive, who returned to India to lead an N.G.O., Janaagraha, dedicated to improving local governance.
India's independence revolution in 1947 began in urban India and its political reform revolution is also going to begin in urban India — "this time fueled by the forces of globalization," he said to me in his Bangalore office, surrounded by young volunteers. "Globalization is creating the affluent urban Indian who is going to demand more from government and is not going to be content with islands of affluence. [Because] it will be impossible for them to fully take advantage of the opportunities globalization is giving them without airports and roads and sidewalks . . . acceptable in any city in the world. And the only way they are going to get that delivered is if they get engaged in government. We have [in India] a motto: `Elect and forget.' And what we need is to `elect and engage.' "
