India is Asia’s latest economic success story. However, it is not growing by marketing cheap labor or raw materials, but through brain power and talent. Jurriaan Kamp, who had lived in India, for years describes a miracle. “If this is globalization, then I’m all for it.”
I recently witnessed a broadcast of India’s Oscar presentations. I knew there were perhaps more films made each year in Bollywood, as Mumbai, formerly Bombay, is known in the film industry, than in Hollywood. After living in India for four years, between 1985 and 1990, I also thought I knew that those films rarely had much to offer Western viewers. At the film awards, I expected to see women in saris performing classical holy dances. Aesthetic. Beautiful. Slow. And endlessly far away.
But to my surprise, I found myself swept up in a breathtaking show. Not only was the music fast and rhythmic, but somehow the inevitable saris had blended with Western fashion. That same combination of East and West seemed to characterize the entire event. The inspiration from MTV was detectable, but the presentation was less crude, with resplendent dancing in which coolness managed to merge with soft femininity. If this is globalization, I thought, then I’m all for it.
I now know that Indian television, once the home of a single state-run channel that produced monotonous, inept news programs, broadcasts sophisticated entertainment not only during the annual film awards but as part of its daily programming. This change is one more sign that India has changed radically. For decades after it achieved independence in 1947, this ancient nation declined to join in with the rest of the world. Instead, hidden behind high tariff barriers, it worked towards an ideal of self-sufficiency. Such a goal suited – and still suits – this country’s proud nature, but along with a closed economy came a torrent of poor quality.
Indians drank Campa Cola – its color the only aspect reminiscent of the real thing. They drove cars designed in the 1950s and lacking any more recent innovations. Even in New Delhi, making a phone call usually meant screaming to be heard over the static. It was a miracle if you managed to open Indian beer cans, which were made from some sort of crude iron. Nowhere did Indian industry reflect the superb craft of the Taj Mahal, one of the wonders of the world. And Indians spoke with self-mockery of the “Hindu growth” rate of their national income, which increased by an average of 10% annually – barely enough to keep pace with the country’s population growth.
By 2002, when I once again spent a few weeks in India, it had given in to globalization and opened its borders to the world. Excluding the poverty, the nation had changed so much I barely recognized it. Modern cars fill the streets of the metropolises Delhi and Mumbai, and shops sell well-known international brands. But behind those familiar labels is a unique twist: India makes nearly every product sold there. The country doesn’t import, it manufactures. Instead of working alone, it has teamed up with international companies, but the majority of shares in most of these joint ventures are in Indian hands. It seems that this country has managed to take part in the globalization process on its own terms.
That development is drawing attention. On December 8, 2003, Business Week’s cover read, “The Rise of India and What It Means for the Global Economy.” On the same date, the cover story of the progressive Indian newsweekly Outlook asked, “How does the world see the India ‘brand’?”
Two visions from widely different perspectives on the same phenomenon: India’s sudden breakthrough on the world economic stage. With a tone of admiration, the American business magazine concludes that India, where annual growth now exceeds 8% (the global average is 3%), is the first developing nation to have an economy based on brain power, not on the raw muscle of factory labor or on natural resources. India, where one out of every five Fortune 500 companies has a research and development center, is turning into a software nation. “We can hardly imagine investing in a company without asking what its plans are vis-à-vis India,” one venture capitalist told Business Week.
But Indian software engineers aren’t the only ones basking in the country’s limelight. More and more Americans booking airline tickets or hotel rooms on 1-800 numbers find themselves connected to someone in India. The reason these service jobs go there is that, thanks to colonialism, India has millions of well-educated people who speak perfect English, a situation that has outlasted British rule in part because English is the only language in which all Indians can communicate with one another. Included among these English speakers are more than 250,000 new engineering graduates every year whose $10,000 starting salaries are about one-eighth the amount paid to their American counterparts. As a result, 5% of America’s software engineers and nearly 7% of its electrical engineers are out of work. According to Business Week, this is a trauma to which U.S. business will have to adapt. Doing so won’t be easy: America’s industrial sector, which is feeling the pinch of cheap competition from China for numerous manufactured goods, accounts for less than 15% of U.S. gross domestic product (GDP) and just over 10% of its jobs, but India’s strength lies in the services sector, which represents 60% of U.S. GDP and two-thirds of all jobs.
Outlook takes a different approach to the question of how to define India today. The fiercely anti-globalist author Arundhati Roy says that any answer must include brackets: a growing modern nation (with occasional bride burning), a secular country (with a popular mandate for a militant Hindu politician), a warm tropical land (with snow in the north) and an online culture (with one of the lowest personal computer penetrations in the world). In short, India is a kaleidoscope, offering different views from different perspectives, and we must not lose sight of the complex, multilayered society underlying its recent economic success story.
India’s spiritual heritage still plays a major role in shaping the India brand. “It’s not clear why we always had the highest ratio of gurus per thousand humans,” Outlook says. “Either we are so good that a good portion of us occasionally mutate under the sprawling tree, or we are so bad, we need so many messengers to rescue us.” Nonetheless, over the past ten years India has transformed itself from a misty salvation merchant to a relevant player in the material world. There are only three countries in the world where supercomputers are built and only five that launch communication satellites. India does both.
And yet, India has a long way to go. With a 17% share of the world’s population, it contributes only 1% to global trade. By contrast, over the past year, the level of growth in imports and exports from arch-rival China was double the total value of Indian trade. And despite India’s much-applauded progress towards becoming a computer nation, less than one million Indians find work at software companies – a drop in the ocean in a country with nearly 500 million workers. Here, too, there is a marked contrast with China, where millions of farmers have found work in factories. India’s software growth is worth more but offers many fewer jobs. Nevertheless, India’s abundant labor potential also represents a future strength for the country, now forecast to be the only nation in the world where the population will continue to grow over the next 50 years. Such growth in the pool of young workers formed the basis for previous Asian economic successes.
Outlook outlines the shadow side of the recent Indian achievement. India accounts for only 2% of global software revenues, and the 200 million people who have shared in the recent economic prosperity represent only 20% of the total population. The income of the other 80%, who are rural farmers, has stagnated for 15 years, and the country has made only modest progress in reducing child mortality, poverty and illiteracy.
But perhaps the most important benefit of recent economic development is increased self-awareness, as reflected in the incumbent government’s campaign slogan for upcoming parliamentary elections, “The India That Wins.” This nation is proud that today it not only assembles and serves but manufactures and owns. Proud that a minimum of one in every 10 articles of clothing sold at Wal-Mart comes from India and that Europeans now drive cars manufactured in India. Proud of its citizens who are industrial pioneers at home and that Indians abroad are considered smart and talented rather than as representatives of a country of bizarre gurus and abject poverty.
That self-awareness will not directly affect conditions in the slums of Calcutta. But such self-confidence translates into an increasingly entrepreneurial spirit – and therein lies the distinguishing feature of India’s recent encounter with globalization. As illustrated on Indian television every day, this nation knows how to maintain and develop its own values and not degenerate into a supplier or manufacturer for Western wealth. India will become an important economic partner, Business Week forecasts. And as this occurs, the creative strength of India’s entrepreneurs will ultimately stamp out the country’s poverty.
Facelift
No more silly questions about elephants. ‘How smart you Indians are!’
Sometime in the mid-1990s, India’s image got a facelift, liposuction and a few deft tummy tucks. The new, svelte India then went for the silicon implants—in that valley in America. Scores of Indian computer brainiacs, venture capitalists and entrepreneurs turned California into their personal backyard. Second-generation ‘ABCD’s were coming of age too, storming Wall Street and scaling new heights on Capitol Hill. As members of the young power elite, they confidently walked the halls of the US Congress. Stereotypes were being shattered, the exotic was giving way to the eager, the cows to comps.
The difference a decade makes. The once-typical American comment, “You speak such good English”, and silly questions about elephants are today fewer. The comment is more likely to be about “How smart you Indians are.” This, plus the mainstreaming of yoga by gurus and tricksters, of bindi by Madonna, of Indipop by hip hop artistes, of sari-inspired dresses on Oscar night.
In Britain, NRIs can hardly believe what is happening. ‘Made in India’ is not just respectable but before anyone knew it, sought after. Says a London-based Indian executive with a French bank. “What has made a difference is that people know now what we are capable of. Earlier they thought India is the land where their curry came from.” India has been Britain’s market too long, now it is becoming India’s market. It is discovering what the Indian in India can do. Take away British jobs, for instance, in their thousands. Take contracts British firms think should be theirs. Take positions in multinational firms at previously unthinkable levels.
Consider some facts: the father of the Pentium chip is Vinod Dham, who started with $8; Vinod Khosla is one of the world’s most powerful venture capitalist; Sabeer Bhatia created Hotmail and Rangaswamy Srinivasan discovered lasik surgery. These heart-warming facts get better, going down the chain of any major US organisation. The 1.6 million Indian Americans form a mere 0.6 percent of the population but are the fastest growing and wealthiest minority. Bill Gates acknowledged that 20 per cent of engineers at Microsoft are Indians. Nearly 12 per cent of all US doctors are of Indian origin. Estimated annual income of Indians in Silicon Valley: $60 billion.
SEEMA SIROHI and SANJAY SURI
Taken with permission from Outlook (December 8, 2003), the weekly newsmagazine of India. For information on subscriptions: Outlook, AB-10, S.J. Enclave, New Delhi 110 029, India, outlook@outlookindia.com, www.outlookindia.com.
