Posts Tagged ‘india’

My favorite class this year was about the rise of China and India as international powers. It was taught by a former World Bank economist who has done much of the work on these two countries’ “knowledge economies.” My term paper examined intellectual property in China and India.

Although many objective observers see stronger intellectual property rights as an amenable, even necessary, policy for China and India, there are significant downsides to increasing IPR protection and enforcement. Strengthened IPR is likely to disproportionately advantage the developed world, decrease the ability of China and India to diffuse productivity-enhancing innovations, prove both insufficient and unnecessary for promoting innovation, and even be counterproductive to the countries’ innovation systems.

Here’s the entire paper. (Also available for download here.)
There Is No Harmony In a Patent Thicket: Towards an Effective IPR Regime in China and India

I just went to a very interesting book talk by Stanley Nollen, a professor at Georgetown, and Neil Gregory of the IFC. Their new book, “New Industries from New Places: the Emergence of Hardware and Software Industries in India and China,” examines the reasons for the rise of different ICT sectors in the two Asian giants.

They began by showing graphs of the exponential rise in software revenues in both China and India since the 1990s, but when broken down into exports and imports, it becomes clear that Indian software is predominently written for exportation while Chinese software is for the domestic market. And although India does not have a similarly developed hardware industry, when that sector is analyzed, Chinese hardware is overwhelmingly exported while what hardware India does make is for domestic consumption.

A number of explanations are typically given for the difference, notably India’s English language proficiency, its higher education system that created a large labor pool of software engineers, and the overbearing regulation that was not extended to Indian software firms. The authors of this book believe that while these are necessary explanations, they are not sufficient. Using a variety of data, including firm-level interviews with 300 Chinese and Indian companies, they think they have flushed out the answer.

Their research suggests that Indian management, not labor, and their pool of larger, better educated professionals were largely responsible. The management can be applauded for seeking quality certifications for Indian software firms and utilizing the diaspora ties. Further, they strategically partnered with far more American software companies than the Chinese did – 60% of surveyed Indian firms had Western partners, compared to only 12% in China. (There was a lot of data thrown into the presentation that focused on the software industry, but I didn’t copy most of it down.) A final reason offered by the authors, more tentatively, was a cultural explanation – Indians tend to be more outspoken and tolerant of ambiguity. Because software creation is a creative enterprise, perhaps they have an inherent comparative advantage.

During the Q&A, Professor Mike Nelson offered some helpful insights from his time with the American IT industry:

• In hardware, you can thrive with 2-3 clients whereas in software, you need many more. Therefore, overcoming the “foreignness” of China is more of a factor than in India where multiple Western clients can be easily courted due to the relative institutional familiarity.
• Timezones shouldn’t be discounted – India is apparently much easier to schedule with than China.
• Given India’s relative governance instability, software (with lower fixed costs) is a more flexible industry – Wipro or Infosys can leave localities more easily than OEMs.

Overall a very interesting talk that adds great data to the debate while debunking commonly held beliefs like the importance of Y2K.

I found out via @whiteafrican that in response to November’s terror attacks in Mumbai, Indian police are starting to walk around the city searching for insecure WiFi connections and require the owner to secure them. This is being done because terrorists used random WiFi hotspots to send emails prior to a couple of recent attacks.

Presumably, this is to make investigating terrorism easier – police won’t have to waste time interviewing unwitting WiFi owners, but in reality it strikes me as a waste of resources. Locating hotspots, identifying their owners and enforcing proper security are all likely to be time consuming (and futile) exercises. Terrorists will still be able to get online, whether by hacking WPA, finding an open connection or using an Internet cafe. And besides, wouldn’t you want the additional evidence made possible by the warning emails (such as IP, email account, etc.)?

As security guru Bruce Schneier endlessly points out, security is a trade-off. In this case, it seems that the Indian police are making a bad trade.

Fareed Zakaria, one of the leading public intellectuals, has published a new book entitled “The Post-American World.” In it, Zakaria synthesizes the major trends influencing America and makes a compelling case for what America and the world’s future could and should hold.

Part descriptive, part prescriptive, this book examines the “rise of the rest,” Zakaria’s term for the increased political and economic power of countries previously caught in poverty. The ascendancy of India and China is specifically examined. Zakaria is clear-headed and cogent as he describes the relative rise of the two nations. It is not his belief that America is falling, only that others are rising. In fact, after noting the similarities between the British Empire and America’s 20th century hegemony, it is hard to disagree with his prediction of a leveling of the international field.

In coming to terms with the reality of a world without a unipole, the author succinctly prescribes the role of America as he sees it. Even though the legitimacy of the USA has been severely harmed in recent years through blunder and error, Zakaria thinks that the historical legacy and continuing importance of American power will allow it to reposition itself into a global Bismarkian force. Economic prowess and diplomatic adeptness, Zakaria contends, will allow America to maintain special allegiance with more countries than most.

My only qualms with the book stem from the same qualities which make it an important one: it is brief and approachable. Though this increases the liklihood that Zakaria’s thoughtful work will reach more readers, it limits the attention he can give to countries rising besides India and China. I would have liked to see a discussion of Russia, Brazil, South Africa and other but will have to look elsewhere. Perhaps Parag Khanna’s The Second World will help here.

Overall, this is a book I tore through (and from my brother’s hands). As McCain and Obama shape their domestic and foreign policy, this is a book which should factor in heavily. Although many of the themes – competition, nuclear proliferation, cultural differences – will be familiar to readers, Zakaria molds them into a comprehensive narrative worthy of your time.

[Image: New Yorker]