But India has one strong and hidden advantage over China. What is that advantage? How could it help India?
The hidden advantage is India's intellectual capital. As I write in the book, while China's strengths are on display, many of India's are less visible. India's educated class is one of the nation's strengths. When China closed its colleges during the Cultural Revolution, India nurtured its universities, educating a generation of doctors, scholars, scientists and
engineers. When China persecuted capitalists, Indian managers gained experience by battling it out in local markets. Indian businesses are usually better run today than China's because of this.
India's invisible human infrastructure is its biggest resource now that India has reconnected to the global economy. If China, which has few English speakers and no consistent rule of law, has raced ahead of India, there is no reason why India, which is democratic with a vast English-speaking population and an established court system and plenty of ties to the West, cannot zoom ahead too.
We have seen a tremendous amount of growth in the high-tech industry in the last ten years. How did this happen despite the license raj?
India's economic reforms -- starting in 1991 -- began to beat back the license raj. The Indian tech industry back then had an advantage: Because the high-tech industry was new, red tape had not had as much time to grow up around it and strangle it. There is still much more bureaucracy than necessary, along with its cousin, corruption. But in some cases, it is a
matter of technology helping Indians adapt. For instance, the telecom sector rules were relaxed in the mid-1980s, but the competition from mobile phones really gave Indians choices.
Now, Indians wouldn't dream of waiting 10 years for a phone line to be installed -- they just buy a mobile phone.
Students at the Indian School of Business, Hyderabad. Photograph courtesy: The Indian School of Business
Also read: Can Indian roads compete with Chinese?
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