For the past two decades, the emerging economies of China and India have each carved out their own area of specialization. While China has become the default manufacturing powerhouse, making everything from soft toys to large turbines, India chose the to take the soft route, using its IT workforce and English language prowess to become first the back office of the world, and then the coder for the world. Almost every product sold in US stores comes bearing the stamp "Made in China", while most American companies have an operation in India or employ primarily Indian software engineers to develop the next generation of apps for smartphones and tablets.
With the election of Narendra Modi, and the realization that the IT sector cannot hope to provide jobs for hundreds of millions of people, India is now trying to re-invent itself as in the manufacturing space with the "Make in India" initiative. Foreign companies are being wooed to come to our shores, setup factories to make stuff, and in the process employ large amounts of Indians who would otherwise be gazing overseas to get opportunities in the Gulf, Europe or America.
On the face of it, this seems perfectly logical - having a population that is productively engaged in some activity is infinitely better than having the same population idle, with the potential to create havoc as was seen in Europe a few years ago after the 2008 recession, when unemployment in some cases was greater than 50%. No doubt Modi is trying to ensure that as our population continues to grow, and fewer people are interested in going into farming as their fathers and forefathers before them did without fuss, the lure of getting a factory job with decent wages will help cement the Indian dream for those aspiring to the middle class.
Of course, delivering on this promise will continue to be a challenge as India still is unable to boast of a nationwide infrastructure that is even adequate by western standards. While many industries have been able to provide their own electricity supply and built roads and other facilities close by, the national road and rail networks are often left wanting. This is not a problem in China, that realized the need for infrastructure early on and now has the biggest high speed rail network in the world, as well as expressways and immense power plants.
Even if we are able to attract investment in the form of physical assets, which cannot be pulled as easily from the country in poor economic times, the net benefits may not reach all those who really need them. The free market sounds attractive in principle, however in practice has usually ended up being a trickle down of wealth from those who control the system, to those who merely participate in it.
Which brings me to my proposition which I am confident will shock most readers - if we are going to leverage our strengths, as Michael Porter's theory of competitive advantage says we should, then the most appropriate outlet for Make In India is something that we have become experts at over the centuries - reproduction. That's right - this is one area where India leads the world, and shows no signs of slowing down. And it is a perfect fit in a world where the richer countries are faced with an aging population and people who are unwilling to have children. Let's see how this might work
Every year, India adds about 20 million people to its population - about the size of Australia or Canada. Probably half this population will grow up undernourished, with little access to a good education, and consequently would not be able to participate in the experiment to become a manufacturing superpower. These are the folks that would be prone to violence or other forms of protest to get their share of the pie. Now consider this - countries like Singapore are offering their citizens S$ 15,000 as an incentive to have a child. You can see where I am going with this, but before you reject the idea as immoral/unethical/repulsive, think about the alternative - would you rather have those children grow up in India and then start to look overseas anyway for employment? Countries like Germany and Japan are often hostile to foreigners because of language and cultural issues, but if the child grew up in those countries, they would fit right in, at least in their speech and beliefs, if not their looks. Or worse - if it were a girl child, the odds that she would not survive a week are fairly high in some parts of the country. Where is the morality in that?
Due to some recent cases that went wrong, surrogacy by foreigners has been banned - however, as we all know, a ban is almost never enforceable in its entirety, and I'm sure such activities will continue under the radar. Instead, if we setup a proper system, just like we would a factory to make cars or safety pins, then everything becomes legitimate. It is no different than legalizing prostitution or marijuana
So you have a perfect Make in India story, for which we need to rely on nothing more than our innate desire to procreate. Each Indian woman who is willing to give up their child (and millions do every year under duress), a foreign government will pay $ 10,000 or so directly to that woman - not to the Indian government, which will fund a way to squander the money, but to the woman who has made that sacrifice. The foreign country will in turn benefit from having an infant delivered to them that they can raise in the mold of their own citizens. A total funds transfer of $ 200 billion per year will surely be the kind of kickstart to the Indian economy that Modi would have envisioned!
With the election of Narendra Modi, and the realization that the IT sector cannot hope to provide jobs for hundreds of millions of people, India is now trying to re-invent itself as in the manufacturing space with the "Make in India" initiative. Foreign companies are being wooed to come to our shores, setup factories to make stuff, and in the process employ large amounts of Indians who would otherwise be gazing overseas to get opportunities in the Gulf, Europe or America.
On the face of it, this seems perfectly logical - having a population that is productively engaged in some activity is infinitely better than having the same population idle, with the potential to create havoc as was seen in Europe a few years ago after the 2008 recession, when unemployment in some cases was greater than 50%. No doubt Modi is trying to ensure that as our population continues to grow, and fewer people are interested in going into farming as their fathers and forefathers before them did without fuss, the lure of getting a factory job with decent wages will help cement the Indian dream for those aspiring to the middle class.
Of course, delivering on this promise will continue to be a challenge as India still is unable to boast of a nationwide infrastructure that is even adequate by western standards. While many industries have been able to provide their own electricity supply and built roads and other facilities close by, the national road and rail networks are often left wanting. This is not a problem in China, that realized the need for infrastructure early on and now has the biggest high speed rail network in the world, as well as expressways and immense power plants.
Even if we are able to attract investment in the form of physical assets, which cannot be pulled as easily from the country in poor economic times, the net benefits may not reach all those who really need them. The free market sounds attractive in principle, however in practice has usually ended up being a trickle down of wealth from those who control the system, to those who merely participate in it.
Which brings me to my proposition which I am confident will shock most readers - if we are going to leverage our strengths, as Michael Porter's theory of competitive advantage says we should, then the most appropriate outlet for Make In India is something that we have become experts at over the centuries - reproduction. That's right - this is one area where India leads the world, and shows no signs of slowing down. And it is a perfect fit in a world where the richer countries are faced with an aging population and people who are unwilling to have children. Let's see how this might work
Every year, India adds about 20 million people to its population - about the size of Australia or Canada. Probably half this population will grow up undernourished, with little access to a good education, and consequently would not be able to participate in the experiment to become a manufacturing superpower. These are the folks that would be prone to violence or other forms of protest to get their share of the pie. Now consider this - countries like Singapore are offering their citizens S$ 15,000 as an incentive to have a child. You can see where I am going with this, but before you reject the idea as immoral/unethical/repulsive, think about the alternative - would you rather have those children grow up in India and then start to look overseas anyway for employment? Countries like Germany and Japan are often hostile to foreigners because of language and cultural issues, but if the child grew up in those countries, they would fit right in, at least in their speech and beliefs, if not their looks. Or worse - if it were a girl child, the odds that she would not survive a week are fairly high in some parts of the country. Where is the morality in that?
Due to some recent cases that went wrong, surrogacy by foreigners has been banned - however, as we all know, a ban is almost never enforceable in its entirety, and I'm sure such activities will continue under the radar. Instead, if we setup a proper system, just like we would a factory to make cars or safety pins, then everything becomes legitimate. It is no different than legalizing prostitution or marijuana
So you have a perfect Make in India story, for which we need to rely on nothing more than our innate desire to procreate. Each Indian woman who is willing to give up their child (and millions do every year under duress), a foreign government will pay $ 10,000 or so directly to that woman - not to the Indian government, which will fund a way to squander the money, but to the woman who has made that sacrifice. The foreign country will in turn benefit from having an infant delivered to them that they can raise in the mold of their own citizens. A total funds transfer of $ 200 billion per year will surely be the kind of kickstart to the Indian economy that Modi would have envisioned!
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