[Ed note: Last month we highlighted the ''rise of China'' in our article,
''The Kings of the East.'' This month we’ll take a look at what may be an
overlooked giant rising in the East: India.]
President Bush’s trip to India last month showcased that country’s sizzling
rise to become a top producer in the global marketplace: India has the second
fastest-growing major economy in the world over the past 15 years and in recent
years trails only China and the United States in its contribution to global
gross domestic product (GPD) growth.
Before Bush’s visit - and the media spotlight that follows him - few people
realized the remarkable emergence of India in the global technological culture.
Yet, their research and development centers are sprouting everywhere and are the
seedbeds of the most advanced software platforms, multimedia devices, and other
Major companies, such as Motorola, Hewlett-Packard, and Cisco Systems, are
looking to laboratories in India for their most advanced product developments.
Their advanced 3-D computer simulations are tweaking designs for car engines and
aircraft wings for clients like General Motors and Boeing. India’s Bangalore
Research Hub is spawning companies that produce their own chip designs,
software, and pharmaceuticals.
Daniel Sheinman, Cisco Systems’ senior vice president for corporate
development, declares, ''We came to India for the costs, we stayed for the
quality, and we’re now investing for the innovation.''
Just as China has emerged as a mass manufacturer, India is emerging as a
giant in services. Technical and managerial strengths in both China and India
are becoming more important that cheap assembly labor. And, their relative
strengths are complementary, not competitive. For example, China has excelled in
mass manufacturing, with multi-billion-dollar electronics and heavy industrial
plants; India has specialized in software, design, services, and precision
industry. Their efficiency in back-office processing alone is legendary and
outsourcing such work is expected to quadruple by 2010 to over $56
billion per year!
These two emerging giants will transform the entire global economy. China and
India account for one-third of the world’s population. For the past two decades,
China has been growing at 9.5% per year, and India at 6% per year. Both are
projected to continue at an annual rate of 7-8% for at least the next ten years.
By mid-century, China should overtake the U.S. as #1. Together, China and India
could account for almost half of the total global output.
This is, in some ways, analogous to 19th century America, when a
young, driven workforce grabbed the lead in agriculture, apparel, and the
high-tech innovations of that era: steam engines, the telegraph, and electric
lights. Similarly, these two emerging giants are positioning themselves at the
vanguard of the critical technologies of the coming decades.
India’s younger workforce will give it a chance to catch up to China. Due to
its one-child policy, China’s working age population will peak at 1 billion in
2015 and then shrink steadily. India has nearly 500 million people (twice the
population of the U.S.) under the age of 19 and higher fertility rates. By
mid-century, India is expected to have 1.6 billion people, 220 million
more workers than China.
We will review more of these developments in our featured briefing package,
The Kings of the East, available this month on DVD as well as audio
cassett and CD formats. See the following page for details. We should all aspire
to be like the ''sons of Issachar,'' who understood the times and knew what they
had to do (1 Chr