Mine, Yours And Ours

An encounter with Tarun Khanna, who writes about entrepreneurship, globalisation and mutual ignorance in China and India.

All the teaching at Harvard Business School is done through examples, case studies, so we expose people to real business decisions," says Tarun Khanna, professor at Harvard Business School and author of a well-received new book on India, China, entrepreneurship and globalisation.

"We try to create an intellectual framework to think about these decisions systematically." That is his approach in this book as well "" and it allows him to tackle an enormous and slippery subject with a fistful of elucidatory case studies.

He draws those case studies and anecdotes, mostly business stories concerning outstanding examples of Indian and Chinese entrepreneurship, and of Western business investment in both places, mainly from his own experience as an academic and consultant with a long-time interest in both countries.

For instance, in the chapter on media, he compares Tehelka.com and Caijing, a pathbreaking Chinese business newspaper. In the chapter on building infrastructure, he looks at Pudong, the skyscraper suburb of Shanghai, and Machimaar, the slumlike fishing village that abuts Cuffe Parade in Mumbai.

How did he get access to these stories? "Mostly through my student population over the last 10-15 years," he says. "We help each other, it's part of the network, like the IIT network here, or the St Stephen's network."

In the case of China, access via his Chinese students was crucial, "because in China there are so many barriers to getting good information, and not only language... The closer you are to getting a truly local person, who's of that village who'll be able to talk to you," the better the information is.

As it happens, Khanna doesn't draw significantly on encounters with ordinary people "" barring the odd rickshaw-puller, his correspondents are businesspeople and professionals.

This puts into question the book's title, which is seriously misleading: not only is this book not about "billions of entrepreneurs", the "yours" of the subtitle is also moot.

"'Yours' is the Western world," Khanna explains, "but 'yours' is also when I'm speaking to the Chinese it's the Chinese, when I'm speaking to the Indians, it's the Indians. Part of the reason I wanted to write this book is to redress the mental models that Indians have about China and Chinese about India and the rest of the world about both of the countries."

To my mind, however, the audience is much more select: while the average reader with an interest will certainly enjoy the book and learn something, the real beneficiaries will be businesspeople, perhaps Westerners most of all, who want to understand either country better as a place to do business in.

As for the "billions", Khanna says "I think it would be a mistake to take it literally; it's not intended that way. I guess there's two senses you can take it. One is what I hope would be pretty obvious, that it's just many.

The second is that the signature characteristic of a fast-moving society is that we outpace the existing norms of acceptable behaviour... [that is,] laws and rules," but also "informal ways and mores and so on, and that's what entrepreneurship is about. It's about finding new ways around things that are defunct and old."

But Khanna's book, with its focus on corporate action and its overarching views of topics like health care and the diaspora, leaves out many millions of Indian entrepreneurs. In India the government and "organised" private sector don't employ most of even the urban population.

"Unorganised" Indians, whether shopkeepers, thelawalas, servants or rubbish-sorters, may not each have a big idea that drives their profits, but they are mobile and adaptable, and know their odds and how to overcome them.

Nobody could have a more immediate understanding of the retail market, of marketing, last-mile connectivity and anytime customer service; nobody has a good idea how much they are worth. India could be a lot richer than statistics tell us.

In China, the cities and developed coastal zones suck in migrants from rural provinces. For those with factory-floor jobs, perhaps their entrepreneurial talent is prevented from flowering; but there must be millions more who function like India's unorganised.

Do Indians or Chinese make better entrepreneurs than, say, Americans? "No. Not at all," says Khanna. "I think the distribution of entrepreneurial talent is pretty much the same anywhere.

The story here is about very different societies that have emerged for a variety of reasons and how [the] entrepreneurial impulse is being acted out.

But there is something different about China and India, because they're both so large [that] they have a double-whammy effect on anything that they will do intentionally or serendipitously together, and secondly they've historically not interacted with each other."

Khanna doesn't quite spell out what it is that India and China can or will do together. But he mentions "Chinese investment in infrastructure, telecommunication equipment, software, manufacturing "" despite the fact that India continues to put barriers up against it out of paranoia, and I think that paranoia is destructive to us, not the Chinese. The Chinese don't put any barriers to Indians coming in."

He also points to the small but growing numbers of Chinese workers in Gurgaon MNCs: "[In] the complex in which [my children's] grandparents live, there are literally a hundred of them."

Yet a handful of white-collar workers living together in Gurgaon will not significantly change how India sees China, and vice versa. Perhaps that will eventually happen where sizeable populations, or expatriate communities, come in contact, in places like South-east Asia and Africa.

Khanna misses a chance to explore this in his chapter on the diaspora. China has been leveraging its diaspora for investment for years; India has just started. It remains for those diaspora to be deployed as forward units.

China took Buddhism from India, writes Khanna, along with other ideas. Why has India learnt nothing from China? One thing it might learn is administration "" which the Chinese mastered many dynasties ago.

In the chapter on infrastructure, Khanna explains how China builds cities virtually overnight, while India dithers over minor highways. I asked how it was that even provincial governments in China were thinking more radically, long-term and strategically than India's central government.

"I don't know that it's fundamentally about long- or short-sighted," he responded. "Quite simply it's in the incentive that the local bureaucrat has. It is to generate economic wealth, period. He needs to generate jobs and create local economic wealth and then he gets to move up the Communist Party hierarchy. In our case, in India, we don't have any incentives operating of that sort. The way our political process works is by catering to a particular vote bank or interest group, but it has relatively less to do with generating economic wealth."

If this book is a fruit of the academic and business expertise of its author, it is also a bit of self-advertisement. Like many other writers of current-affairs non-fiction in America, Khanna is staking out a space for himself in a subject with great growth potential. It's a smart business move.

"I can see a lot of things happening and I think the next 25 years will show us a lot of economic opportunities in these countries," says Khanna, "and I plan to participate in that."

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BILLIONS OF ENTREPRENEURS
How China and India are Reshaping Their Futures "" And Yours
Author: Tarun Khanna
Publisher: Penguin Viking
PAGES: viii + 354
Price: Rs 595