The Indian Economy Blog

August 1, 2007

Entrepreneurship : How India Scores Over China

Filed under: Basic Questions,Business,China,Economic History,Human Capital — Pragmatic @ 9:59 pm

INSEAD Affiliate Professor Patrick Turner surmises that the speed of entrepreneurship development in China is likely to erase the lead that India currently enjoys in entrepreneurship over its northern neighbour. In his view, the entrepreneurship bandwagon in both the countries has been fueled by a combination of a number of overseas residents returning to the homeland and local residents eager for opportunity based ventures. However, he puts forth two major reasons for India’s current edge over China in entrepreneurship development.

  • A legacy of entrepreneurship and availability of enough role model entrepreneurs in family, society and country to emulate and follow – unlike China, where the communist government did their best to kill the entrepreneurial spirit in the 50s, 60s and the 70s.
  • Presence of entrepreneurship-oriented bodies such as the TiE network (The Indus Entrepreneurs) or Wadhwani Foundation – unlike China, where nothing even remotely like this exists.

Turner forecasts the rapid rise of entrepreneurship in China by citing the success of entrepreneur Jack Ma, which portends

…that China is already starting to produce its own iconic role models. It will then be just a short step to creating entrepreneurship support organisations, possibly financed by successful entrepreneurs of the new generation.

It seems a tad too simplistic to arrive at the conclusion. Turner’s own observation about parental and social role models in India betrays his fallacious reasoning.

It’s a matter of entrepreneurship appearing to you in those you see around you as a perfectly normal and widely practiced way of pursuing a career.

The prevalent social structure underpins the incubation and growth of entrepreneurship in a country. It is possible and eminently laudable to generate a large number of regular jobs in manufacturing or service sector by providing specific skills and training to a vast multitude, by creating world class infrastructure and by attracting big ticket investment. Deng Xiaoping and his successors might have undone Mao’s myriad economic misadventures in one generation but the entrepreneurship bug will take a few more generations to spread in China, that too only if a fertile breeding ground is available – of a freer, democratic, vibrant and even somewhat chaotic society.

Link

41 Comments »

  1. Interesting. The notion that democracy helps entrepreneurship is brought up often. See this discussion from Shantanu Bhagwat’s blog: http://global-themes.com/china-india-3d-advantage/

    Comment by Shefaly — August 1, 2007 @ 10:21 pm

  2. Quite an interesting post. India is definitely taking huge leaps in entrepreneurship. You can see the change in the perspectives of lots if IITians and IIMites. Most of them do go for corporate jobs but aspire to have their own firms later in life. Even if 1% of them manage it, it will be a big success.
    The Indian mentality supports entrepreneurship, the mentality to break free from the struggle by doing something amazing. China, well I don’t know :)

    Comment by Shubham — August 2, 2007 @ 5:18 am

  3. Pragmatic makes a very good point about social structure. There is one more thing, that I would like to point. Innovation and entrepreneurship have an expectation of future economic rents – and such accrual can only be ensured by the presence of property rights, and courts to arbitrate disputes arising in such contexts. Absent these two, or their efficiency, innovation and entrepreneurship are bound to suffer.

    Comment by Girish — August 2, 2007 @ 8:25 am

  4. Well, I would not feel giddish about how good we are compared to China in Enterpreneurship. If you look at how successful chinese enterpreneurs are in US, Hongkong, Singapore, Taiwan etc… You would say we are far behind. Once next generation of chinese grows up, you will have totally different enterpreneurship era.

    On the contrary, I think we need to worry about our future in Enterpreneurship. Someone mentioned even if 1% of IIT & IIM’s become enterpreneur it would change lot of things. I beg to differ. That 1% hasn’t done much in last 40 years for the masses. Ambani & Mittals did not go to IIT or IIMs. The enterpreneurial skills don’t come by cracking JEE or CATs. In fact, I go to other extreme that IITs & IIMs make dull boys/gals who work well in corporations, but majority lack risk taking required for enterpreneurship. Bear in mind, I have many friends from this institutions and I myself have gone thru one of those premier institution in India. I don’t think India is exception. I did a quick analysis on Fortune 500 company data in US, and not many CEO’s came from Harvard, MIT, Stanford or Wharton. That does change when you look at VP’s and Board of Directors, where graduates from those institution do shine.

    I feel lot of enterpreneurial skills are learned in early years of life. Things like have a lemonade stand when your are 10 year old and making money of by selling 50 cent glass lemon water teaches you a lot. I think we need to teach our young kids to be risk taking and promote small adventures from childhood. Instead at present we force them into taking tuitions and memorizing text books so they get good scores in CBSE, SSC exams etc…

    Comment by Shailesh — August 2, 2007 @ 8:03 pm

  5. Shailesh:

    I agree. Entrepreneurship in India never came up because of the IITs or the IIMs. The biggest entrepreneurs in India have been from small towns and nondescript cities, be it an Ambani or a Mittal. The famed Marwaris also didn’t learn it at any B-school. Their immediate family and society was their learning school. This is Turner’s observation as well and I think the prevalence of role models in the family and immediate society holds the key.

    China doesn’t have this advantage and it would be nothing short of a miracle if they can produce enough entrepreneurs in one generation to surpass India. More than anything else, it is about social change. Can China do that fast enough? That’s the moot point.

    Comment by Pragmatic — August 2, 2007 @ 8:23 pm

  6. While Chinese might lack a bit of entrepreneurial skills, those who decide to go for it have a lot of advantages than those in India. The ecosystem is much more strong as China has cultivated a vast labor pool and a massive industrial complex. A lot of Chinese universties have made it to world class and the nation as a whole is awash with liquid capital. And they have good roads to connect towns and cranes to build skyscrapers :P. India is a way off in fundamental things that even with millions of entrepreneurs our potentials might never fully be unleashed.

    And with a system of government that we have, the educated and informed dont vote or voice opinion in the society, while the illiterate masses elect governments. Rulers come by throwing free power and clothing at the masses, while reformers get kicked out (remember 2004). Thus, we still continue with a lot of business un-friendly practices while screwing the power sector, oil refining and other crucial infrastructural complexes with subsidies. While China might be communist, they have vastly more business friendly laws than we have and I beg to question whether Indian version of democracy anywhere kindles entrepreneurial spirit. Oh! but, we still grow inspite of the government.

    Comment by Balaji Viswanathan — August 3, 2007 @ 12:34 am

  7. Balaji: Though I agree with conditions you pointed out, I don’t think they are impediment to Enterpreneurship.

    In India we have good enterpreneur inspite of all these problems. You have folks who become enterpreneur out of necessity (like rural poor coming to city and setting up paan shop) or from desire (like Ambani who left foreign country to achieve his dream). This is true among many communities. I am from such an community, where actually if you say you are doing job, you are looked down upon. It’s a pride to have your own business. If you want to promote enterpreneurship, you must promote and celebrate such successes. The rewards for doing something daring should be high enough.

    One aspect, I think that can help is things like reducing Piracy, because at present, if someone comes up with new idea, nothing stops from getting being copied. Strict enforcement of patent laws can help. For small businesses, it would be helpful if we had vocational courses that help folks start small business. Many small business folks don’t even know about financing to grow the business. In US there are small business administration offices that help many start a business.

    Comment by Shailesh — August 3, 2007 @ 12:58 am

  8. China has imported enterpreneurs for quite some time now. Right from the time they started freeing the economy, people from Hong Kong, Taiwan, Thailand and other East asian countries have moved to China and been welcomed there. Also people from the Western countries have moved to China to set up units.

    It is not necessary to have a role model from one’s own country. The above role models are quite suficient to kickstart the enterpreneurship story in China.

    Comment by rishi — August 3, 2007 @ 2:26 am

  9. To run a successful business in india you have to be a crook (there may be few exceptions in IT due to its linkages w/ sahibs abroad)

    Comment by andiron — August 3, 2007 @ 6:21 am

  10. i would also urge that in india, free chinese(mandarin) education is started as soon as possible (at least start w/ public school..second coming of macaulay??). With likely chinese hegemony from 2025 or so, knowing english alone will not help.
    This sound preposterous today, but talking of a vibrant indian IT industry too would have sounded absurd in early 90s.

    Comment by andiron — August 3, 2007 @ 6:27 am

  11. Andiron

    I just love your comments. How about collating them all into a note book — am sure it\’ll be a bigger hit than the collected sayings of Chairman Mao!

    Comment by skeptical desi — August 3, 2007 @ 7:42 am

  12. It’s puzzling that posters on this board still believe misleading comparisons from Professor Patrick Turner and others. The development gap is so vast between China and India at this time that we better stop the discussions on the subjects that who is a better entrepreneuer. Anyone who has visited both India and China will tell you that there is no comparison between the two, particularly on getting things done.

    According to Howard H. Stevenson of Harvard University, “Entrepreneuship is an approach to management that we define as follows: the pursuit of opportunity without regard to resources currently controlled”. To qualify being a entrepreneuer, the essential quality is to stop make excuses and do the best job you can for setting the conditions right for attracting investment and then making things happen.

    A true entrepreneuer will never claim that he or she is better than other entrepreneuers, instead, he or she will constantly find what areas he or she has to learn or to improve in order to be successful. In the real world, there is no sympathy to those who have self-claimed superority, rather the smart money like FDI will find ways to the hands that can get things done efficiently and quickly.

    Comment by thecupgr — August 5, 2007 @ 2:59 am

  13. Those who see the huge infrastructure in China don’t see the invisible political iron finger on the switch that can put light out of many investors in one quick flip. All your money and effort is gone with it.

    India is far better any day. Stop carping and get enterprising.

    Comment by Lovindia — August 5, 2007 @ 9:26 am

  14. For people who see huge infrastructure in China, they probably also see other things that are different. This has been the case for thousands of India students who are currently enrolled in Chinese universities. These are brave Indians (please call them entrepreneurs) who have decided to look beyond infrastructures as well as a tiring debate of which country is better on entrepreneurship.

    According to various sources, the total number of India students in Chinese universities is at least close to 10,000. Most of these students, according to publications in Chinese newspapers and websites, all go through initial shock of China’s modernization because of India media’s overall negativity when they report China.

    This trend is striking because even very remote Ningxia Medical College can attract a large number of these students:

    http://www.nxnet.net/newspaper/2006-11/14/content_997990.htm (Chinese)

    In China, Ningxia province is one of the poorest provinces and its universities are among lowest ranking in China’s higher education.

    Please also check out following paper on this subject by rediff:

    http://www.rediff.com/news/2004/oct/18spec1.htm

    Excerpt of the paper: After the United States, Britain and Australia, Indian students are now heading towards China for higher education….Like in foreign investment, China has outpaced India in capturing the international education market. Education experts who visited China say the Communist nation has become the most sought after study-abroad destination. “India is just missing the international education bus. China has invested so much in higher education over the years that that the country is producing many more quality students than India. No wonder then that Indians too want to study in China,” says S Gopinath, an education expert who regularly guides Indian students on getting admission to various Chinese colleges. Asian Education Consultancy, a top consulting company in southern India, says medical education in China is of a higher quality and lower cost compared to India.

    One can expect that these India students, now in great numbers, will one day go back to India and help build bridges between India and China.

    Comment by thecupgr — August 5, 2007 @ 10:41 am

  15. Uh oh!

    Deja vu all over again…

    All, let\’s stay clear of cheap pot shots re India v China. Please

    Comment by tPrashant — August 5, 2007 @ 7:39 pm

  16. Easier said than done Prashant when the only articles about China in the Indian press are either how India will overtake China in 5, 10, 20 years or India is better than China in X, Y, or Z. One doesn’t find much divergence amongst India’s English literate bourgeois elite.

    There is a cheap shot, and there is speaking truth to power. The former can easily be rebutted by complex truth the latter not so readily.

    Comment by Jing — August 6, 2007 @ 7:29 am

  17. Hi Pragmatic,

    I think the post on enterprenuership above is quite low on content, with no real analysis of the issue on hand. I understand that the sort of open ended post would promote a wide variety of comments in the forum , but from a blog of IE stature, the readers do expect a bit more of elaborate analysis when it comes to issues like this.

    On a lighter note the chinese government may make enterprenuership mandatory for all ctizens and may come up with some mechinsms to ensure that all of its citizens become enterprenuerial by year 2015, or earlier.And then they would fudge national statistics to prove that they have indeed become enterprenurial :)

    Comment by Renjith — August 6, 2007 @ 9:59 am

  18. \”Easier said than done Prashant when the only articles about China in the Indian press are either how India will overtake China in 5, 10, 20 years or India is better than China in X, Y, or Z. One doesn’t find much divergence amongst India’s English literate bourgeois elite\” — Jing on August 6, 2007

    Based on my reading, I\’d agree with you that the Indian media and chatterati are obsessed w/ the India v China issue — often w/o hard facts.

    That doesn\’t necessarily mean we have to let the same occur on IEB. Of course, part of the reason started IEB was because the Indian media\’s coverage of economic issues (themes and quality of writing) was (largely) mediocre.

    As an aside: I\’ve got a post coming up about entrepreneurship in India, based on my personal experience w/ three different start-ups over a 20 yr time span. I promise to stay away from the India v China meme [grin]

    Comment by Prashant — August 6, 2007 @ 1:35 pm

  19. Renjith:

    The above post was never meant to be an in depth study of the subject. It was more an analysis and reflection on ground covered in Professor Turner’s article. The aim was to point out the fallacy in Turner’s own argument and certainly not to garner out of context comments on India vs China debate. I look forward to Prashant’s article on entrepreneurship for a fresh perspective on the subject.

    I can’t resist but point out that even you couldn’t desist from taking a swipe against the Chinese, albeit on a lighter note. That’s the emotion this issue generates.(;

    Comment by Pragmatic — August 6, 2007 @ 7:21 pm

  20. I travelled China a month ago. I know before hand through our media that we are a decade back wrt infrastructure. After my visit, I changed a bit more. Not just in infrastcruture, but also in talent pool, creating employment opportuities. In every tier-2 city, we can see large number of industrial parks spreading over hundreds of acres (In india, land acquisition is still major problem without controversies) and a vast talent pool supplied by universities to get absorbed in these diverse industries. To add, not jsut in manufacturing but any field you can think of. In India, we have 30% attrition rate, and min 15% wage hike, just because our universities cannot supply enough people to suit the industry needs.

    Coming to enterprenuership, Chinese do have definite advantages when we think govt support,infrastructure and talent pool, local market. However, enterprenuership is not just these four, expoliting existing problems around us and converting into opportunities. In the latter, both Indians and Chinese are same !!

    Comment by Rajsekhar — August 7, 2007 @ 9:17 am

  21. What India needs to reflect (to look at or research further)on entreprenuership is its macro-level entreprenuership (or called as national entreprenuership or government entreprenuership). Taken Howard H. Stevenson of Harvard University as the reference point, he defines “Entrepreneuship is an approach to management that we define as follows: the pursuit of opportunity without regard to resources currently controlled”. In the case of India, the question to ask is what resources India currently has in control. This is paramount because knowing the strength and weakness for what you have in control will determine how or where to act. If demacracy, free press, and personal freedom are biggest resources for India, then at national level, there should be a grand strategy to maximize these advantages for business growth. If this grand strategy is to be applied in building infrastructure, the measures have to be taken to counter the potential interruptions (or indecisions) when elections lead to the government change. The role for national entreprenuership here is to find innovative procedures (or laws) for maintaining infrastructure construction regradless if party A or party B is in office (For example, an independant office should be set up for making long term planning and execution of infrastructure projects).

    One important aspect of national entreprenuership is to understand the differences between politics and business. Political aspects are often easy to understand (like free press, freedom, etc), but the business aspect can often be confused with political aspects. Two political parties can debate politics, but they shoul not delay decisions on building infrastructure. They must find common ground and solutions to the infrastructure, otherwise, how one nation can fully rely on individual entreprenuers to build roads, power plants, ports, etc?

    The case can be made that India has strong individual entreprenuership. But at this time, India ergently needs national entreprenuership.

    Comment by thecupgr — August 9, 2007 @ 9:05 am

  22. A data point as the manager of a large research team for a major computer company that is spread across both India and China. I find that the Chinese tend to not question their superiors decisions as much as the Indians do (many Indians think that they know better than you). There are of course, pluses and minuses with both approaches — the Indian team is not as productive as their Chinese counterparts — on the other hand they are definitely more innovative and not afraid to challenge the status quo.

    My sense is that there will always be a (large?) base cultural quotient to what constitutes entrepreneurship which will be hard to capture using any model. You can use statistics to measure the current differences between China and India in entrepreneurship — but future evolution of this phenomenon cannot be easily predicted. Can China transform itself from its current role as a manufacturing power house to driving new innovation (in technology, economy etc) like the US? It may be possible — but I dont see it as a natural out growth of the current Chinese situation.

    Comment by Steppenwolf — August 13, 2007 @ 6:56 am

  23. Well success has different interpretations. For me India breaking out of the shackles and becoming a free economy is success, that we are the fastest growing economies in the World is success, that we have become an important factor in the IT revolution is success, that some of the richest people are Indians is success. I strongly believe that India grows younger at 60. http://askwiki.blogspot.com/2007/08/india-grows-younger-at-sixty.html

    Comment by Rishil — August 13, 2007 @ 9:05 pm

  24. It’s been a couple of years since I’ve been to India, but I was in China this summer for almost a month. Born and raised in India, exposed to Indian media, I too was shocked observing mass constructions/renovations in Shanghai and Beijing, their current skyline, transportation, and future plans. I had never thought that China was this advanced (atleast the parts I had been too), but I’m sure not all of China is like that. There is an obvious reason for China being ahead…thats simply because they started their industrialization 25 years before India. Yet, I was definitely amazed at the developments and coordination for future planning in China – I wonder if planning on a large scale even occurs in India. I thought back to my home in India, where they are now planning on ripping down the building to make a high tower, to create more living space. However, all the nearby buildings are doing the same thing – on their own. I wished there was some better kind of city planning authority.

    One thing is for sure, however, the general population in India is definitely more aware of the world culture than the general Chinese public. I’m no expert, but I constantly wonder how these pros/cons of each countries will be affecting them in the near future.

    Comment by unbiased — August 15, 2007 @ 1:53 am

  25. For serious readers, please check out following paper on detailed analysis of China’s entrepreneurship and its private sectors:

    The entrepreneurship and institutions:
    a perspective to interpret China’s economic growth in
    its transformation

    http://www.aeaweb.org/annual_mtg_papers/2006/0108_1015_0203.pdf

    Comment by thecupgr — August 15, 2007 @ 5:45 am

  26. Simplistically speaking, Indians must visit China to compare the differences. Indian contractors should see the road building, high-rise building construction, work flow, etc.
    India has a long way to go. In India the daily progress is eroded by population growth,
    corruption, babugiri etc. I think it is 60-years since independence and the Indian civil service system must modernize or perish.

    When the babu’s go abroad for begging to invest in India (e.g., recent trip of Maha Chief
    Minister), the investors really see through the cracks between the eyes and the mouth of these sleek individuals. The investors have a different reception to the individuals from
    China, Thailand, or Vietnam who barely speak English. What is wrong in India? Still, 700 million people do not get enough to get by! Shame!!!

    Comment by Jasdeep — August 20, 2007 @ 3:09 am

  27. Till the day we change our definition of success we are going to struggle to create tons of entrepreneurs. I don’t know about the rest of India but I come from Chennai and as a Tamil Iyer I can tell you, that we are brought up being absolutely convinced that the greatest thing in life is to go to engineering school and then work in an Infosys or a Ashok leyland and then go on to an IIM or go abroad for your M.S.

    Comment by liveforever — August 21, 2007 @ 2:08 pm

  28. Chinese lack entrepreneurial skills? Check out HongKong, Taiwan, Singapore and most southeast asian countries where chineses dominate their economy. Ordinary chinese succeed in different parts of the world. And most of them are not college grad or MS, unlike most indian who moved to US and England. please stop comparing india to china, those two countries have nothing in common but their population.
    Indians are more creative, where is the innovations? For a country that most of its elites are working on IT field, india have shown little or nothing in innovations.
    Indians have better command of english and therefore will develop faster, Compare this: Japan (most of japanese speak not a word of english) and Philippines (100% english speaking country), which of the above two countries developed faster in the last 60 years?
    Indians demographic dividend over the next fifty year? India population is actually younger than China now. So, where is the dividends? a few hundred millions young, uneducated, unemployed indians sure look interesting, especially after we considered how good a job india had done on basic education for its poor.
    I am not a india basher, but can indians stop bragging about how much freer/smarter/more creative they are compare to the chinese while most of the facts pointed to the contrary. This is pure mental Masturbation.

    Comment by Eric — August 25, 2007 @ 1:15 am

  29. Here we go again. As a desi, here\’s my take: this obession with China reflects an inferiority complex. Please, let\’s get over it — both, in real life and in the comments section of this blog post. Any signs of this degenerating into one of those (my country is so better than your country) and I\’m going to close comments.

    For the record, I mostly agree with Eric.

    Comment by Prashant — August 25, 2007 @ 4:59 am

  30. Entrepreneurship is different everywhere. It depends on political clime, circumstances, vibrant atmosphere, policy. The entrepreneur has to feel independent and free. The Indian perspective of entrepreneurship is visible in her new grassroots. Read more at http://publicrelationsindia.blogspot.com/2007/09/india-and-its-new-grassroots.html

    Comment by Mouli — September 17, 2007 @ 10:44 am

  31. Dear All,
    I have read the article and comments offered all of you. Rather than India-bashing, China-bashing, govt-bashing and self-bashing, why doesn’t anyone of you do something about it. In whatever capacity you are working in, why not inspire,encourage, guide, support, advocate entrepreneurship in and around wherever you are? Isn’t that a more constructive way of dealing with the issue? Even if one does some good for some entrepreneur, or help somone start a venture, hw will have contributed his mite to the nation.
    I am proposing to do that, and more.
    Thanks and all the best.
    – Kathale

    Comment by Kathale — September 27, 2007 @ 1:13 pm

  32. India vs. China, who is most innovative, was addressed in the Wall Street Journal “Low Costs, Plentiful Talent Make China a Global Magnet for R&D,” .
    Interesting, considering that India too has both – low costs and plentiful talent. This bears thinking about – where are we lagging? And why? China certainly sems to be maintaining the price advantage, whereas India, like a commentor has said on this post, is moving up the price band, as it moves up the “food chain” of outsourcing. In which case, is there no value being perceived for the additional cost?

    Comment by lakshmi .v. — September 27, 2007 @ 5:30 pm

  33. I agree with Eric. Most Indians on this forum cannot come to terms with the fact that India as a nation is lagging behind. Be it, basic infrastructure or education, India has a long way to go.

    So, what if the China is not democratic. India’s democracy rides on the ignorant poor. Do you think, Mayawati could get democratically elected anywhere in the world.

    India’s democracy is an eyewash. Fooling the poor and use of religious/caste vote banks is the strategy here. These so called people’s representative does not care for the people at all.
    Why do we have roads in such a bad shape. Why do we have illegal construction all over.

    In China, the ruling party may be corrupt but they get things done. They interfere in everything but they have made china into a world class super power.
    They are yeilding to people’s demands. Visit Shanghai and you will know.
    About entrepreneurship, just wait for a while. The chinese in the mainland had been living in a state of suppression for a long time and it takes time to come out of it. As said earlier in the posts above, the chinese have proved it in other places like Taiwan, Hongkong, Singapore, Malaysia and the US.

    Stop living in a Fool’s Paradise.

    Comment by Ammadio — October 5, 2007 @ 1:17 pm

  34. The spirit of enterpreneurship is much more alive and kicking in China, than it is in India. As someone who has worked on a project in China since 2005, I have visited the major cities (Shanghai,et al) as well as some smaller cities. I have found many more people in China who are eager to start their own businesses, as compared to India. They understand that a job is only a temporary phase to get some food and shelter. Many run small businesses on the side. Some alternate between business and jobs (failure in a business lands them in a job, where they again lick their wounds and start thinking about how to start a new business). I have frankly not seen this in India. Many Indians dream of the following sequence (good college degree in engineering, an MBA, then a job with an MNC, foreign postings, some nest egg, switch some more jobs and so on). Hardly one comes across anybody who would like to start a venture AFTER having the degree/MBA & the first job. The venture may be started by people who failed to get into an MBA course or an Engineering college.
    Regarding infrastructure, yes, the Chinese infrastructure i their lowest tier city is FAR better than in India’s commercial capital. Do not challenge me on this. Visit any C grade city in China for yourself, the roads, airport, train, buses and taxis will be much better than in Mumbai any day. However what the Chinese are lacking is the “soft” infrastructure like Banking laws, IP rights, attorneys and attorney firms, doctors (yes there are very few GPs in practice in China, if you fall ill you cannot just visit a GP’s clinic you have to go to the hospital), stockmarket broking houses, etc, etc. They are now concentrating on building this up in cities like Shanghai. Hong Kong already has this soft infrastructure in place.
    Now what is admirable about Indian enterpreneurs is that they still continue to build good companies and products IN SPITE of the pitiful physical nfrastructure.

    Comment by Dissenter — October 7, 2007 @ 11:52 am

  35. 100% agree with you after I visited China half year ago.

    Comment by Vijay — October 8, 2007 @ 12:39 pm

  36. I think the post title leads most to take an India v China stance. The real question is entrepreneurship and what makes for good entrepreneurs? Simply put good entrepreneurship is the ability to spot opportunities and act on them to create successful organizations.

    In China the government has actively worked to seemingly remove obstacles to these opportunities. There seems to be no real cost of money in China at the moment. In terms of pure money play Chinese entrepreneurs have a tremendous advantage at this time.

    The IT and BPO industry in India enjoy the same kind of patronage as manufacturers do in China. If infrastructure and industry are lacking in India its because the government did precious little to encourage it. This is changing but still the cost of money and high taxation give China the advantage right now.

    I would state that Indians have the better abilities to identify opportunities. The Chinese however have a better chance of succeeding at creating money out of it. In terms of creating successful organizations the advantages would swing back to India.

    Comment by Nikhil Nayak — October 9, 2007 @ 1:17 am

  37. “I would state that Indians have the better abilities to identify opportunities. The Chinese however have a better chance of succeeding at creating money out of it. In terms of creating successful organizations the advantages would swing back to India.”
    Just want to know how you come up with this statement, any statistics or reports to support it?

    Comment by Eric — October 11, 2007 @ 4:08 am

  38. Eric, the time will come for india elite to reassess China’s soft infrastructure strength. The communications are so shallow at this point that there are very little mutual understanding and respect between two peoples for making objective evaluations.

    There is an obvious disparity between China’s development level and western media’s persistent negativity for describing China. As such, most people in the west (including India) have difficulties in understanding why China has progressed so fast (for example, numbers must be cooked or fabricated or whole thing will collapse soon or only Shanghai and Beijing are developed, etc).

    However, this trend is changing. More people, after visiting China, have become more objective. Particularly, foreigners who have recently visited China’s poor regions (Northwest from Lanzhou along silk road to DunHuang, Southwest around Chongqing areas) have been expressing their disbelief for world-class infrastructures and soft social development. The point here is that they have to go to see by themselves. If they go, they should go to see China’s Northwest and Southwest because China’s coastal areas are already developed.

    The opening ceremony of 2007 Shanghai special olympics gave a lot of hints for China’s cultural and social strengths. The most striking one is the Chinese cultural’s openness: willing to hire foreigners to direct the ceremony and willing to move on from the past.

    Comment by thecupgr — October 11, 2007 @ 6:01 am

  39. Recently a group of Karnataka govt MLAs & MLCs visited China and hav opined that India cant be like china. One of the reasons they qoute is the single political party system which has brought about such changes in the ecomomy.
    The visit apart. If we look into the things closely, the political will power is most important of all – be it infrastructure or anything for that matter. If we just look at the controversy abt the 123 agreement with America or the SEZ spree in our country turning almost into real estate business, its very much evident.
    Its good that we are starting SEZs in our country. But i feel that one or two SEZ at a time has to be implemented. Based on its success or failure, things can be decided upon.
    There wouldn’t be enough foodgrains with the govt, if it continues to acquire even fertile lands for SEZ. Again we will have to depend o imports with high prices, which would result to imbalance in the balance sheet. The govt cant think about the welfare of the nation on proper lines. It lacks the foresight….it lacks the vision for the country. The govt seems to be indulging in the party politics rather than getting a consensus for the important developmental projects.

    Comment by Channu — October 12, 2007 @ 12:05 am

  40. I know it is completely off the topic but I couldn’t resist commenting on what Ammadio said about mayawati: “India’s democracy rides on the ignorant poor. Do you think, Mayawati could get democratically elected anywhere in the world.”

    Well, Maya doesn’t trust media and media doesn’t like her. Media never gives a clear picture of why people vote for her. Talk to those who voted for her this time and they will tell you:
    a) Her party is less corrupt than SP.
    b) better law and order
    c) Work gets done under her rule. Not headline grabbing stuff like SEZs but work on small things like paved roads, less irregular electric supply, safe drinking water, drainage/sanitation etc etc.
    d) She is the only real alternative to SP.
    Voters are not fools. Everyone votes based on his/her interests.
    Caste politics? That cannot explain why brahmins voted for BSP instead of BJP.

    Comment by 0ldm0nk — October 14, 2007 @ 9:04 pm

  41. Comparing India and China on every criteria possible is now a thriving cottage industry. As I argue in my book, India’s Open-Economy Policy, India-China comparisons in most cases are overblown, in many cases without sound basis, and at times even suggest the wrong policies.

    For example, Indian analysts often lament about its inward FDI being lower than China’s. But there is neither economic nor business reason to expect a parity between the two. A country’s ideal FDI rate is determined by its resource absorbability, risk, and potential rate of return, not the rate of another sovereign entity. And most foreign investors would hedge their bets by spreading assets in both countries, not in one at the cost of another.

    Similarly, the very first line of this post is problematic: “the speed of entrepreneurship development in China is likely to erase the lead that India currently enjoys in entrepreneurship over its northern neighbour.” Entrepreneurship development is not a competitive sport, nor is it a zero-sum game between countries. There is no natural “lead” nor “loss” between India and China–these misinterpretations of socio-economic phenomena are constructed and driven by an unquestioned need to compare everything as a competition.

    Jalal Alamgir
    http://localandglobal.wordpress.com/

    Comment by Jalal Alamgir — September 23, 2008 @ 8:50 am

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