Interview with Dr. Tarun Khanna

In conversation with Dr. Tarun Khanna, we got some interesting viewpoints on the role that India and China could play in the 21st C. Could India and China be “social and economic laboratories”? Could they ever work together to create a global impact? These are some of the questions he addresses.

Dr. Khanna is Jorge Paulo Lemann Professor at Harvard Business School and the author of Billions of Entrepreneurs: How China and India are Reshaping Their Futures and Yours, in which he discusses the importance of entrepreneurs in the growth of these two booming Asian economies.

Q- Please tell us a bit about your book, Billions of Entrepreneurs: How China and India Are Reshaping Their Futures–and Yours.

A- It is a book that results from the marriage of my personal experiences in China and India – in the for-profit, non-profit and political spheres – and my own research in these countries. . It’s an attempt to communicate the on-the-ground, off-the-beaten-path reality of these two nations to a broad spectrum of curious people worldwide. And ultimately I’m hoping to reorient people’s worldviews from sometimes-outdated imagery.Finally, it’s a book of hope, that is, one of optimism.

Q- What exactly do you mean by entrepreneurship?

A-The act of creating something new, of seeing some part of human endeavor in a new way, of reimagining the unimaginable.Importantly, I mean the term to apply to efforts in business and economics, of course, but also in the social sector and in politics.

Q- Do you see India and China working together for each other’s advantage in the next ten years? Currently, they seem pretty busy flexing their muscles against each other, so to say.

A-I don’t think border disputes are going to go away anytime soon.They are inherently zero-sum and will always result in tension. But there is room for economic complementarity and there is no reason why this should be held hostage to the existing stress-points. My hope, of course, is that economic linkages will help blunt the tensions. As I say in the book, there are historical, empirical and conceptual reasons for hope. Conceptual because the economies are complementary – what China is good at, India is not, and vice versa.Empirical, because there are some interesting cross- border experiments underway. And historical because China and India have been productively linked in history far more than they have rattled the proverbial sabres against each other.

Q- Could the western world be playing a role in increasing this competition and pitting both countries against each other?

A-I suspect that most of what will happen will be driven by the internal dynamics of China and India.

Q- You called India and China “social and economic laboratories” in an interview. Could you explain what exactly that means?

A-I am claiming that some of the new practices being fostered in these countries, as they strive to improve their economic lots, are going to have global impact.A simple example would just be the substantial development of the global software delivery model from India’s IT services firms, that was created as a way to leverage abundant software talent to cater to the world’s demand. Some amazing new techniques are being pioneered in for-profit microfinance today in rural India that will affect the poor of the world. And the likes of cardiac surgeon Devi Shetty are lowering the cost of tertiary healthcare for millions of Indians, across the income spectrum, in a way that will help the world’s poor especially. Ditto for China. Microsoft and the world’s tech majors are understanding what it will shortly mean to have half a billion cell phone customers, and how this technology can be used in a cutting-edge way. And selected environmental experiments in new-age cities are likely to yield insights for the rest of the world from some parts of China (even though China in general is a huge environmental problem).

Q- In this rush to create an impact in the global scene, would you say that both the countries seem to have given the concept of sustainable development a skip?

A-There is a danger. But in China, the government is now trying desperately, with its harmonious development slogans, to reorient its efforts. And in India the private sector is just beginning to at least talk the right talk, hopefully it will walk this talk soon as well.

Q- How does each country treat its diaspora in terms of stoking entrepreneurship at “home”?

A-China is way ahead of India on this front. In fact, the Chinese economic miracle post 1978 would likely not have been catalyzed absent a strong role for the diaspora.India has belatedly embraced its diaspora, though tangible links between the diaspora and India are still at an early stage. But here I am optimistic that the diaspora will play a huge role in times to come.

Q- In your opinion, what is it that specifically plagues Indian entrepreneurs?

A-At the personal level, nothing different from the risk aversion that affects would-be entrepreneurs everywhere else.

Q- Any advice you would like to give to today’s youth in India?

A-I just gave a keynote speech at the annual event of Network of Indian Professionals netIP, held in Boston. Their conference slogan was ‘Explore, Dream, discover.’ That seems like an appropriate admonition to the youth of India!

Compiled by

Shravya Jain