Friday, February 09, 2007

Take that Friedman


Here is an article that seeks to temper some of the enthusiasm that people like Thomas Friedman have stirred up for the growth of the high tech industry in India and India's accension to superpower status in the new "flat" world.

Moose, you were in India recently, what's the word on the street?


At Friday, February 09, 2007 2:04:00 PM, Blogger Hammond Law Group LLC said...

This article is a little misplaced. I don't think anyone, Indians included, would argue that India is a superpower. Their GDP puts them on pace with Mexico and Russia, which is hardly super-power status.

The more intersting question is the future one. This week's The Economist argues that India is overheating, and then goes on to cite a range of pessimistic statistics: India's stock market is through the roof, comminist legaicies, the "license raj", enormous infastructure problems,
rapidly increasing wages (you don't hear that story in the US, but it's clearly true -- many 25 year old Indian IT guys are doubling their income every 18 months, it's like Moore's law in Hindi), etc.

I can speak to the infrastructure problems first-hand. Everyone's right, it's a disaster over there. The roads range from awful to nonexistent. The electricity in even the nicest hotels still blacks out for a few minutes every few hours, the water is more-or-less undrinkable, etc.

But it's the demographics that make India so impressive. Even if 700 M people stay in poverty, that's still a half of a billion people not in poverty: which would make it the largest productive population. The average age is much lower than China (and that disparity will continue to grow as China's "one child" program continues to wreck China demographically). Now a favorable demographic outlook doesn't gurantee success (ummm look at sub-Saharan Africa), but the reverse might be true (let's see where Old Europe is in 25 years).


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