I have just landed in Hong Kong after spending a week in India and Singapore. It was utterly surreal to be dropped into India straight from the Upper West Side of New York City. I feel slightly strange even now about the experience, sitting high atop the Hyatt overlooking Hong Kong’s Victoria Harbor, wondering why I am so optimistic about India’s prospects despite the grinding poverty I witnessed.
One’s initial impression of India is shaped by the bump and grind ride in from the airport in Mumbai. On the hour and a half journey, you ride past a slum that contains over two million people who are living without running water and often without walls, a ramshackle tent and iron siding sub-city. In the central city are architectural wonders such as the Central Train Station and High Court, reminders of the colonial period, part of the so-called Golden Mile financial district, now a bit down at the heels, looking their age. Mothers walk up to your car holding new borns, asking for money. Even so, perhaps because I have seen the change in China, from the time I went as a newlywed to Shanghai in 1986, where one could see the same kind of decay, I am now a believer in India.
This week I met aggressive entrepreneurs who head vibrant local companies in package goods, pharmaceuticals, auto/tires, and textiles, with their local entries often beating global brands on the basis of lower price and better value. I also met the chairman of Bombay First, which has been organized as a lobbying organization for business on the model of the New York City Partnership, to push for Bombay’s fair share of federal spending (like NY City, Bombay gives much more than it gets back from the central government). There is no shortage of talent–seven business schools on the model of Harvard or Insead, hundreds of thousands of engineers expert in information technology. No wonder Microsoft and Veritas among others are moving R&D centers to Bangalore and Pune. This is much more than an outsourcing haven, it is a serious opportunity for low-cost clinical trials in pharmaceuticals or world-class clothing/fashion business.
The great unknown for me is whether a democracy like India can create the conditions in which business can flourish. The infrastructure problem cannot be magically solved–the road system for Mumbai was built in the 50s and is outmoded today, with 90 minute commutes from homes in the suburbs a regular feature of life. Global hotel chains like Hyatt have built their new properties near the airport, not in the central city, so that clients can avoid the hassle. The choices are difficult–disrupt existing neighborhoods by building modern highways from the airport to the center city, or accept the reality of eventual decay of the core.
India should also find a way to cooperate with, not compete against China, for foreign direct investment. Global companies need to be in both of these markets. It is a false choice for India to position itself as the service center and China as the manufacturing center. The entrepreneurs I met this week are ready to compete with anybody. I am convinced it will happen.