Nandan Nilekani, co-founder and co-chairman of IT major Infosys Technologies, offered a peek into his forthcoming book, Imagining India, which he said attempts to address a gap in understanding India, while delivering the kick-off Global Leader Lecture at Johns Hopkins University’s School of Advanced International Studies in Washington DC.
Nilekani, who is quoted extensively in New York Times‘ Pulitzer Prize winning journalist Thomas L Friedman’s best-selling book The World is Flat, said that people were often perplexed by India because “of its contradictions — a country which has stark differences, stark disparities. I decided to look at it from a point of view of ideas,” in explaining India’s explosive growth.
He said that six things had “changed in the mindset of India, which is really responsible for the growth that you see today in India — the dynamism, the vitality, the energy.”
1. Gigantic human capital
Nilekani, who became one of the youngest entrepreneurs to join 20 global leaders on the prestigious World Economic Forum Foundation board and was listed as one of the 100 most influential people in the world by Time Magazine in 2006, said that the number one change in the mindset of India was with regard to population.”
“Earlier, population was looked at as a burden and a lot of things that happened in the 1960s and 1970s — like family planning and sterilization and the Emergency and so forth — were all related to the belief that population was getting out of control and that it was actually a problem to have a large population.”
“Today, the language has changed dramatically, and we no longer talk about population as a burden. We think of it as human capital. And, this has become even more critical because India is going to be the only young country in an aging world and that really makes a huge difference,” he said.
He recalled that China’s adoption of the ‘one child policy’ in the 1970s, which was very successfully implemented, has had consequences and led to rapid aging “and therefore China in fact will be aging more rapidly and really hitting its peak numbers in the next 5 to 10 years.”
Nilekani said India, on the other hand, in the next 20 to 30 years would “have the largest pool of young people in the world even as the rest of the world is aging.”
He described this as “a demographic dividend” that could contribute immensely to the economy “not only because they can contribute internally to the domestic economy, but they can also contribute to the global economy as when they go and work outside or they can contribute through outsourcing as is being done in our industry.”
“Thus, human capital has become the core and the essence of what is happening in India and is at the root of India’s resurgence today,” he said.
2. Entrepreneurship gains acceptance
Nilekani said another significant change in mindset was regarding entrepreneurs who are no longer viewed with suspicion but as icons of economic growth.
He noted that since 1991, “when there has been a huge expansion of enterprise, there is a far bigger role for the private sector and for industry, and today, India has the largest pool of entrepreneurial talent outside the United States.”
“Entrepreneurship in India is blossoming and Indian entrepreneurs are not afraid of liberalization anymore. They are very confident and globally competitive and they are not only investing abroad, they are buying companies abroad.”
3. The power of English
Nilekani said “English is also no longer viewed as an imperial language that has to be jettisoned but as a language of aspiration that has to be really cultivated.”
He argued that “all the political angst about English” in the past has disappeared largely “because of the growth in the economy, because of the growth in outsourcing, because of the growth in jobs, and today English is seen as a language of aspirations.”
“More and more people, whether they are in villages or small towns, are realizing that if they really want to participate in the global economy, and they really want to bring more income to their lives, they have to learn English,” he said. “And, the political system has accepted this because more and more states — which had stopped teaching English — are now going back to teaching English from class one.”
4. Change in democracy
Nilekani also argued that the notion of democracy had also undergone a major transformation from the time of India’s independence. “In the 1950s and 1960s, it was really a top-down idea. It was an idea of the leaders who had a certain vision of the kind of country they wanted to create, and it was given or gifted to all the people who may not have necessarily understood the value and import of what was happening.”
Today, he said, “it has gone to become a bottom-up democracy where everybody understands their democratic rights — not just in the sense of parliamentary democracy or contesting elections. You see people taking charge and doing things in India without waiting for the state to do the job. For example, NGOs (non-governmental organizations). Today, India, is the most thriving place in the world for NGOs.”
“Another example,” he pointed out, “is the empowerment at the village level — the village panchayats — more then a million women who are there in these panchayats.”
5. The technology revolution
Talking of technology, another development that had catapulted India and helped it leap-frog several decades, Nilekani said, “What people don’t realize is it has played as much a role in India’s internal development as it has in terms of the $50 billion in IT (information technology exports).”
“For example, India’s entire national election was held on electoral voting machines. You are talking about a million voting machines all over the country and the entire national elections of 2004 across the length and breadth of the country were done digitally using electronic voting machines — there was no paper.”
Nilekani said “this is a classic case of how you use technology to leap-frog and go from a very antiquated system to a very modern system.”
He also cited the example of the stock-market and said that in the 1990s, “India had among the most antiquated stock-markets in the world. It took months to settle transactions, there was a lot of fraud, lots of duplicate work, a lot of embezzlement and so forth. Today, thanks to technology, India has the most modern stock markets in the world and they are completely electronic.”
Nilekani said a veritable no-brainer vis-�-vis the technology revolution that had propelled India was the mobile phone. “It has become accessible to everybody. It is touching and feeling every individual and we are seeing more and more applications, which have a huge impact and the good thing about these applications is that they cause a quantum leap in productivity — it goes up by a huge amount and much of this is what has fuelled the economic growth.”
6. Globalization embraced
Finally, he said India had adopted a progressive view of globalization although acknowledging that “even though there is still a lot of criticism of and opposition to globalization, fundamentally the confidence that India has gained has made our world view on globalization far more positive.”
“Our companies have become globally competitive and are willing to go out and global factors are really playing in India’s favour today. More and more people are beginning to become far more comfortable with globalization and they are realizing the benefits of an open economy, they are realizing the benefits of having their workers and their people all over the world, and they are realizing the benefits of Indian companies exporting capital abroad.”
During the interaction that followed, Nilekani was challenged on several fronts, including on his demographic dividend argument, with one questioner asking: What is the assurance that the youth will receive good education that would prevent them from becoming “unemployed troublemakers in the next 10 to 15 years.”
Nilekani acknowledged that “while you have all these advantages of a demographic dividend, unless you do the right thing, a demographic dividend can become a demographic disaster… if you don’t have education and jobs for all these young people, you are actually creating a very combustible social environment.”
He reiterated that “just having these advantages is not enough. There is a lot of work ahead in really reforming and improving the quality of education — both primary and secondary.”
Nilekani said that having just a few Indian Institutes of Technology or Indian Institutes of Management is no panacea. “You need to have hundreds of them, like they have in China. You need to create an environment where more jobs get created. So all that work is still yet to be done. So, by no means am I saying that you can declare victory at this point.”