The Indian Century?

Education, entrepreneurialism, and democratic institutions bode well for the country’s future—but profound challenges remain.

City Journal

Spring 2015

I attended a dinner in Paris full of tech experts, scientists, and investors, all of whom were gloomy about the West. Progress isn’t progressing, they complained. There are too many impediments to innovation. What on earth has gone wrong with our universities? We once put a man on the moon, and now we can’t even figure out a humane way to fly from Silicon Valley to Paris. Everything’s overregulated. The Scientific Revolution is over; the Industrial Revolution has reached the end of the line. No one understands what made America great anymore. We haven’t conquered death, but taxes have conquered us. We’re doomed.

Enter Nick Booker-Soni, about 30, affable and rumpled, standing at the open window to smoke. I said that I lived in Istanbul. “Really? We visited last year.” The other half of the “we” was his wife, Meetu. “Truth is, we were a bit disappointed.” I expected him to mention the usual disappointments: traffic, perhaps, or tear gas. “Just not that much history there,” he said.

Not what I expected.

It’s too bad the others weren’t listening, because if he’s right, he had the answer to their questions. Nick is English but has lived in Delhi for a long time. Delhi’s the city whose history spoiled him for Istanbul. We spoke for a while at that open window overlooking the Seine, and he told me about Heisenberg’s relationship with the Indian poet and polymath Rabindranath Tagore. Heisenberg felt that his conversations with Tagore had greatly helped him, reassuring him that these new ideas in quantum physics weren’t so new at all. “And the double helix?” asks Nick. “Everyone knows that’s two snakes in a mating posture, just like outside the temples. Right? If the kundalini structure is a mystical insight, what else would you call a dream that became a scientific insight? Obviously, India’s the key to solving all these problems.” I was willing to go along. Why not?

“I should really write a book,” said Nick. “About the intellectual and economic influence that India has had on the world. It will again soon. And so much needs to be written about it. No one gets it right.” He said it in the way that people too busy to get around to writing a book usually say it. “The colonialists and the hippies—they just totally distorted everyone’s view. Anyway, the next century will all be about India reemerging.”

The disappointed dinner guests were by then well into their cups and pronouncing it curtains for the West. Nick nodded in their direction. “The key will be the intersection. Of all these ideas.” I was half-listening to those ideas, too, catching snippets of conversation. “Strangeness is now a normative criterion for a physical theory,” someone said, I think. “How far can strangeness be pushed before we’re left with magic?”

Nick and Meetu run a firm called IndoGenius. Their business is advising universities, governments, and private investors who want to enter the Indian market. The Big Idea, as expressed on their website: “The next chapter of the human story will in part be defined by the economic and intellectual reemergence of India. Help us write the rest of the book.” Frankly, I was skeptical. I’d spent some time in India in the mid-1990s. My memories didn’t match Nick’s account of what it had been, was becoming, and would be. “You shouldn’t take my word for it,” he said, giving me his card. “Come see for yourself.” I mentally filed the conversation under “epic small talk.” But several months later, I took him up on his offer and returned to India. I’ve also come around, at least part of the way, to his view of India’s future.

It didn’t take long to establish that, yes, India’s transformation since last I’d been there had been noteworthy. The taxi I took from the airport came equipped with an oddly Singaporean monitoring system. A disembodied female voice warned my driver, “Please slow down. You are exceeding the speed limit.” Nothing of that sort had happened in any mode of transport I’d previously used in India. “Well, that’s new,” I thought.

Nick met me at the door of his and Meetu’s apartment and headquarters—IndoGenius Central—in the Kailash Colony neighborhood of south Delhi, where I would be staying. He’d gone native in a white kurta, smiling and booming, “God bless you!” at everything in his path. To describe IndoGenius as hectic doesn’t fully capture the energy and confusion of the place. In a typical hour, Nick will pop in to explain that the sound I’m hearing is the priest in the living room chanting from the Ramayana to bring auspiciousness—they’re launching an important project that day—and that there’s Domino’s pizza in the kitchen. I eat the priest’s lunch by accident, and he winds up with the Domino’s. I’ve barely finished apologizing for my faux pas when Nick pops in again to say that they’re off to the temple to thank the priest—as soon as the massage therapist leaves—would I like a gin and tonic?—and, by the way, there’s not a single foreign correspondent in Bangalore. Sikhism founder Guru Nanak’s followers are passing by with a massive, monstrously cheerful, uncoordinated brass band outside, so I’m thoroughly distracted. I’m wondering whether the claim about Bangalore could possibly be true, but he’s off again with a fleeting, “It was India, not Persia, that invented chess,” leaving me unsure as to whether I must urgently reassess all my foreign policy clichés. And that’s just an hour. All rushed and bewildering, but definitely optimistic.

Indeed, IndoGenius markets itself as the Indo-optimists. “The IndoGenius mission is to help increase interaction between India and the world,” proclaims the firm’s website, and the goal is “to increase the greater sum of knowledge for the benefit of all mankind.” Nick believes every word with a conviction bordering on the religious. But he defends those words with evidence plausible enough to convince the skeptic.

His basic argument runs something like this: however huge, screwed-up, and complex India may be, its economy will keep growing for the next 30 years, as it has for the last 30 (barring total nuclear war or a truly unparalleled outbreak of disease). The rate of growth could be almost stagnant or as high as 12 percent, but as long as the number isn’t negative, massive wealth will be generated. The demographics guarantee it. Given India’s rapidly urbanizing population of 1.3 billion, even if a nuclear war wiped out Delhi and Bombay, that would still leave Bangalore, Hyderabad, Chennai, Ahmedabad, Pune, Surat, Calcutta, Jaipur, Lucknow, and a long list of cities smaller than Chicago but still pretty big, and all of them potential engines of economic expansion.

India is usually described as an “emerging” economy, but “reemerging” is the more accurate term. The rise of India hardly began with the liberalization of its economy in the 1990s. For hundreds of years prior to British colonization, India was the world’s leading economy, producing a quarter to a third of the world’s output. The British colonial and postcolonial periods were an economic disaster, but things have been looking up. The IMF and the World Bank expect India to overtake China as the world’s fastest-growing major economy next year. PricewaterhouseCoopers’ World 2050 projections declare: “India will surge . . . [and] overtake the European Union and the United States in share of world GDP (in PPP terms) by 2044 and 2049, respectively.” Economists predict that India will be the third-largest economy in the world by 2050.

The Indian stock market now has more than 5,500 listed companies. Some 150 of them are valued at more than $1 billion. That’s not overly impressive for an emerging economy, true, but unlike most emerging-nation stock markets, the portfolio is highly diverse, ranging from pharmaceuticals to cars to IT, with everything in between. Ten years ago, barely a dozen multinationals carried out research and development in India; now there are more than 700. Economist Kazuyuki Motohashi recently published a paper in the Seoul Journal of Economics noting that India ranked just behind China and the U.S. as a top R&D center for multinationals. “When comparing China and India,” he observed, “many companies are attracted to China’s market and cheap labor, while India’s draw is “an abundance of quality research personnel.” This is an industrial revolution well under way.

India is “the world’s largest democracy,” the cliché goes, but it’s a cliché because it’s true, and it’s another reason for Nick’s optimistic vision of India’s future. India has elections, a free-ish press, and a historical and linguistic connection to the Anglophone world and its ideals. Some observers say that democracy and freedom will impede India’s rise and that China’s authoritarian capitalism is the wave of the future. But as Americans, we should reject that contention. If China is right about how to run things, then America is not “a revolutionary and successful experiment”; it’s a historical curiosity. If we’re right, democracy and something like our idea of freedom work better than authoritarianism, and India will succeed and may well emerge from its industrial revolution as an educated, creative, open, tolerant, and prosperous superpower.

India was hurt as well as helped by British colonization. The helpful part is that it left many Indians with an aspiration, at least, to be ruled by law. The bookstores in Delhi are packed to the rafters with books about contract law, the principles of accounting, and seismic engineering. The ubiquity of English among the elite gives India an advantage over China. Census figures (albeit outdated) indicate that India has twice as many English-speakers as England, and four times as many as Canada. A command of English certainly would be helpful to anyone trying to master the existing scientific literature.

India, Nick points out, is also open culturally to Western ideas—to all ideas. Who knows why? Everyone has a pet theory. Maybe it’s because sooner or later, everyone invaded and colonized India, and sooner or later, they left. So India just got used to it. The place just went on and on. It’s been invaded so many times that they’ve developed the habit of accepting any idea that comes their way and somehow making it part of India. Or you could bring on the theories about pantheistic syncretism. (Delhi rickshaw driver: “Are you Christian or Muslim?” “I’m neither,” I respond. “What about you?” “Both!”) But one thing’s for certain: it’s not like China. You can bring a new idea to India, and while it may be judged with suspicion, if it’s a good idea, someone there will think carefully about it. While there’s just no such thing as an adjective that applies to 1.2 billion people, “can-do” is closer to a useful description of Indians than most others I’ve heard.

None of this is to say that India is a paradise. It’s a mess. The list of woes is long: corruption beyond imagination, bureaucracy that nearly defeated me from the start (try to get a visa from a consulate that closes on every pantheistic holiday), slums, illiteracy, the legacy of the caste system, everything suggested by the phrase “open defecation,” and even the ritual suicide of widowed women known as suttee, which still goes on. A third of the country, mostly in the rural areas, lives below the poverty line. In the semiarid tropical regions, droughts have stalled the Green Revolution, which allowed India to feed itself by increasing crop yields. Almost half the population lacks access to basic sanitation. “It’s very difficult for girls to go outside in the darkness, and they’re worried about snake bites and other problems,” an Indian woman told the Guardian. “Other problems” is a euphemism for rape, one assumes. Statistics on this are hard to disambiguate, given that India is experiencing a wave of reporting on rape, but there’s a difference between a crime wave and a crime-reporting wave. It’s possible that only now has it occurred to many Indian women that rape is a crime.

Narendra Modi, elected last May as India’s 15th prime minister, has promised to address some of these problems and is showing signs of moving in the right direction economically, where he wants to ease off regulations. Looking at the signage while walking through Delhi suggests just how much regulation there is to ease. Consider the bracing spirit of the warning that it is VIGILANCE AWARENESS WEEK, affixed to the exterior of something called the “National Productivity Council,” which is apparently a “No Tolerance Zone,” though it is not clear what is intolerable—presumably, everything. Delhi police barriers announce: WE KNOW WE SLOW YOU DOWN. BUT WE TRY OUR BEST NOT TO LET CRIMINALS SLIP BY. I like that one, I confess, for its beleaguered modesty. Also admired: RULES!!! THIS IS NO SMOKING AREA. FIREARMS AND EXPLOSIVES NOT ALLOWED IN THE CINEMA PREMISES. Fair enough.

Though Modi is saying the right things on the economy, I do view him with concern. What some have called the “Saffron Swastika” of his Hindu nationalism is real and about as appealing as it sounds. But I’ll take Indian religious zealots over Saudi ones. India has elections and may get better use out of Modi than vice versa. India isn’t Turkey. It would be more challenging to Putinize India than to Putinize Turkey or others on the long list of countries that have challenged our belief that the natural trend of history runs toward liberal democracy. Remember another cliché: India is ungovernable. That’s a good thing, if you’re hoping not to be Putinized. For India to keep moving forward, Modi only has to do as little harm as possible. It’s unlikely that any politician is going to change India all that much. It’s too big to drag anywhere at anything but its own speed—but also too big to slow down, once it reaches escape velocity. India’s politicians have generally been a miserable bunch, and they probably always will be. It’s not Indian politicians who impress me but Indians themselves.

And nowhere are Indians more impressive than in their commitment to education, which they have long viewed as the pathway out of impoverished misery. In 1970, the U.S. had three times as many university graduates in its workforce as India did, but the gap has closed. If the projections are even remotely accurate, India will have more than 200 million graduates by 2050—twice as many as the U.S., and nearly as many as the U.S. and China combined. The number of highly educated Indians already likely exceeds the population of France. From an economic standpoint, what Indians are studying is also key: science, medicine, and engineering. There’s not a Swiss-lesbian-Chicano studies major in sight.

I sat in on a number of university classes in Delhi and met the students and their instructors. I scribbled down a few notes about what they were studying. From the curriculum of the first week of the first semester: “History of polymeric materials, classification of polymers, configuration and conformation of polymers, nature of molecular interaction in polymers, cumulative interaction, entanglement, random chain model, linear-branched, cross-linked, crystal morphologies, extended chain crystals, chain folding”—my notes stop there, but the curriculum goes on and on. The students’ notes—assuredly—are more extensive and accurate. Some, but not all, will learn every bit of this and get it exactly right, because soon there will be a test. Others will fail to learn every bit of it, fail the test, and fail life. I’ve never seen kids as happy and grateful to have the chance to pass.

India’s reverence for those educated in the hard sciences was captured by this terrible headline in the Times of India. FIVE TECHIES AMONG 45 KILLED AS BUS CATCHES FIRE IN ANDHRA. May they rest in peace, I thought, along with the two infants and 38 other souls on the bus who weren’t in the tech industry. The omission was all the more awful for suggesting the truth. The techies, as they call them, are indeed the people who’ll find ways to reduce the appallingly high number of these kinds of accidents in India, and bring myriad other improvements, too. They are thus—in a sense that is hard to understand for wealthy Westerners—more valuable to India.

Indians spend more than $3 billion a year on test preparation and $7 billion more on tutorial classes. Those not lucky enough to get a scholarship at a top Indian university spend $12 billion on private higher education and $13 billion to study at universities overseas. Some 100,000 Indians are studying in America alone. The $35 billion Indian education sector is growing at 10 percent per annum. Demographics suggest that this trend will continue for decades to come.

The Indian Institutes of Technology, or IITs, are India’s most famous educational brand. Five were established shortly after independence and modeled on the Massachusetts Institute of Technology. The best of them are incredibly competitive—far more exclusive than any Ivy League university. The only way in is to pass a rigorous all-day math, physics, and chemistry exam. Last year, 1.4 million Indians took the exam; only 0.4 percent made the cut. IIT graduates thus tend to be among the most intelligent and competitive people in the world. Last year, PitchBook, a venture capital research firm, found, to its surprise, that graduates of the IIT in Delhi produce more start-ups backed by venture capital than any school in the Ivy League. Only three American universities did better: Stanford, Berkeley, and MIT. And IIT graduates are increasingly staying in India after they graduate. Before 1997, 80 percent of graduates of the IIT in Madras moved to the United States. These days, less than 20 percent do so. Clearly, the brain drain has reversed. Look no further for proof of India’s R&D prowess, as identified by the Seoul Journal of Economics.

Projections from the GSMA (Groupe Speciale Mobile Association) suggest that India will have 1.16 billion mobile connections by 2017. These figures may be unreliable, but the country is coming online fast. I’m with the techno-dystopians who assume that when people have access to the Internet, they’ll use it to do whatever they’ve done before. But in India’s case, that means that many will use their new access to the Internet to study. India will soon surpass the U.S. as the largest consumer of online education. We could be looking at hundreds of millions of highly motivated Indian students en route to producing lots of new things that will benefit India and the world.

A growing number of these highly educated Indians have experience in creating valuable intellectual property. Nick thinks that Indians could produce a dozen new Silicon Valleys in the coming decades. Maybe. But even producing one would be impressive, given that many Americans are basing their belief that they will continue to be the world’s leading superpower on one Silicon Valley and lots of shale gas. (Guess what other country might have massive untapped shale reserves? In 2011, India’s biggest energy explorer, the Oil and Natural Gas Corporation, claimed to have discovered the country’s first major shale gas reserve, in the Burdwan district of West Bengal. The company said that it was the world’s third-most massive shale gas find, after those in the U.S. and Canada. P. K. Mahato, a scientist at Deva Malviya Institute of Petroleum Exploration, claimed that the block had reserves that could last 50 years.)

Compared with frustrated America and sclerotic Europe, India feels avid, bustling, and entrepreneurial. The Indian press is full of sentences such as: “We are on the cusp of an unstoppable explosion of innovation powered by advances in science, technology, venture capital, and entrepreneurship.”

That entrepreneurial spirit is having a hugely beneficial impact on health care—one that might have lessons for us. If you need cardiac surgery and can manage the flight to Bangalore, your odds of surviving that procedure are better than they are in the United States. And according to the Wall Street Journal, it will cost one-tenth of the price. Dr. Devi Shetty, in the Journal’s words, is “the Henry Ford of heart surgery.” Shetty believes that the cost of global health care could be reduced by 50 percent in the next five to ten years if hospitals would adopt his ideas about economies of scale. His family business, the Narayana Hrudayalaya Group, offers discount hematology, pediatric surgery, neurosurgery, and organ transplants. His heart hospital in Bangalore is the world’s largest, with 1,000 beds, and performs 30 major surgeries a day. His Bangalore Health City—which also houses the world’s largest cancer hospital—is funded by private equity and runs at a significantly higher profit margin than the average American hospital. His surgeons’ performance evaluations are not based solely on their ability to keep their patients alive but also on the time they take to finish an operation, the number of stitches they use, and the units of blood they waste. The balance sheet gets sent daily to Shetty.

Anyone who has received a $30 bill for an aspirin tablet already suspects that the American medical system offers few incentives for physicians to consider the cost of every stitch. Of course, the cost is paid—either directly, by the patient, or in the form of higher insurance premiums, or in the form of higher taxes. Only people who live in a country where it is understood that nothing is free—not even the things everyone needs—would dream of building hospitals like this.

Or so I was learning, from the Wall Street Journal, and thinking about oh-so-abstractly—until I was mauled by Sippy the Dog. Sippy was named after the Study India Program. A student visiting on a lightning study tour had found the lost puppy in the street and left it with Nick and Meetu. But the dog was now full-grown and exhibiting behavioral peculiarities. I figured I was a natural-born dog whisperer and would set things straight. Long story short, Sippy-cum-Cujo attacked me, and I wound up without a nose. Meetu rushed me to Moolchand Medcity, a facility chosen for its proximity to IndoGenius. When you walk into a hospital with your nose in a paper cup, you’re not hoping to perform a randomized trial on Indian health care. You’re hoping for the best health care in the world. I got both.

I was trying to make my horrified hosts laugh when they rolled me off to the operating room and I said to Dr. Manohar Lal Sharma, “I expect a better nose.” I didn’t, really. I figured I’d be lucky not to be drastically disfigured, and that wasn’t even my first concern. My first was rabies; my second was massive infection.

Sharma was born in 1950 in Rajasthan. He’s an alumnus of Vidya Bhawan Higher Secondary School; he attended Rabindranath Tagore Medical College in Udaipur and apparently has many other excellent qualifications. I found that out afterward, though. The first thing I noticed about Sharma was that he had mercifully steady hands and a bedside manner so reassuring that I was, in fact, reassured. He sewed my nose back on as if he did such things every day (he does). Meetu filmed the whole thing, in case there was any dispute with the insurance company.

A week later, Sharma removed my stitches. Nothing about his office said, “Advanced medical technology to be found here.” It was a modest little hovel in a warren of rat-ridden alleys. While he worked, I asked him whether he’d been born with steady hands, or whether it was a matter of training. “Natural aptitude, I think,” he said. I had the thought that most Americans would have: “He could make a killing in Beverly Hills.” Sharma continued gently repairing my ability to inhale. “You must be careful for a short while not to jostle it,” he said, “lest it fall right off. Do please avoid the metro.”

The no-nose situation hardly lacked in drama, but it got really dramatic when I received the bill: the injections cost about $14 (rabies, local anesthetic), and the costs for the operating theater, the X-ray, and the surgical team were on the same order. I’m not a specialist. I don’t know for sure whether another hospital could have done better. But the protocols in place for skin-testing incoming trauma patients to check for potential drug allergies looked first-rate. I saw rigorous precautions to prevent nosocomial infections.

“The first thing people are faced with when they arrive at a hospital in India is a payment counter,” said the head of Healthcare Research and Development for Phillips in Bangalore, in an interview with Kirsten Bound and Ian Thornton of the British-funded Nesta Foundation. “The nature of the system means patients have an awareness at a granular level of what treatments cost—it really makes a difference whether a treatment costs even 500 rupees or 700 rupees.” At today’s rate of exchange, 500 rupees is a bit less than $8. How much “awareness at a granular level of what treatments cost” is there in the U.S.? Not much, I fear. Nor does the American system operate on the assumption that consumers might be intelligent enough to decide for themselves what’s worth it to them.

Some 80 percent of health care in India (give or take a few hundred million people) is provided by private enterprise. Providers don’t have the luxury of performing the economic legerdemain that characterizes the U.S. health-care system and its opaque byzantine dance among employers, insurers, and taxpayers. Indian providers are forced to be competitive. They have to think long and hard about how much to pay for equipment and other supplies. They’re a lot less likely to order tests just because they can. And partly as a result, they’re tremendously innovative.

Wait. An Indo-pessimist just started screaming, “You cannot be serious. Walk down the street. Does that look healthy to you?” No, it does not. Even in the healthiest parts of India—in the Punjab, for example—you see diseases that you would never see in the West, in an abundance that shocks the conscience. I walked around one of the wealthier enclaves of the capital city for several weeks with my post-operation, bandaged-up nose, and I didn’t feel out of place. To the extent that anyone noticed me, it was more because I was white than because something was wrong. I was obviously the lucky one—the one who had enjoyed proper nutrition and first-rate, First World health care in childhood. People see things like half-eaten noses all the time. Entirely fixable birth defects go unfixed. Nearly 30 percent of newborns that die on their first day of life are born in India. Of course, it’s hard to disambiguate these statistics, too. To begin with, 17 percent of the world lives in India. What’s more, the high levels of infant mortality may owe in some part to infanticide, as opposed to a lack of health care. Not that such facts are any cure for Indo-pessimism.

Yet I can’t dismiss Nick’s longer view, especially when I remember that, the last time I was in India, in the mid-1990s—by Indian standards, yesterday—it was unfathomably worse. “Streets full of lepers” is an outdated cliché about India now. It wasn’t outdated then.

We could view the Indian health, pharma, and biotech sectors as competition we fear, or we could view them another way. What if India can beat us in the race to find new drugs to kill antibiotic-resistant superbugs and then sell them to us at a tenth the price? That’s what old-fashioned free-market enthusiasts consider “the kind of competition we like.”

India produces 60 percent of the world’s vaccines and 80 percent of those purchased by the United Nations every year. The country’s ability to do this more efficiently and less expensively than anywhere else is why the Serum Institute of India was able to produce MenAfriVac—a safe, effective meningitis vaccine for the African market that cost less than 50 cents a dose. If you want to consider radical ways of reducing the cost of drug discovery, consider India’s crowd-sourcing project to develop a new treatment for tuberculosis. Launched in 2008, it connected scientists from across India and beyond through an Internet platform that drew on considerable distributed brainpower. The initiative has already achieved interesting results. The M. tuberculosis genome was sequenced in 2008, but only a quarter of its 4,000 genes made any sense to researchers. Starting in December 2009, the crowd-sourcing project’s 500 volunteers managed to re-annotate all the genes in four months. Since then, two promising molecules have been contracted for testing. Zakir Thomas, director of the project, hopes that there will be a new drug in the pipeline within the next five years.

I’m not convinced by the argument that India can’t do quality control as well as the U.S. can. Obviously not: I trusted my life to Indian vaccines, and I’d quite like to pay prices like that for my health care. What this suggests to me is that the more scientific cooperation and exchange we have with India, the better. But our government won’t do this for us, and neither will India’s. Our citizens might think it through, however, and if we’re lucky, our governments won’t stand overmuch in our way. So we—the People—should build the platforms for efficient collaborative research with Indians—here, there, or, cheapest of all, online. It’s the fastest way to find the drugs we really need. And it’s in everyone’s interest for us to do it.

So begin with the assumption that Indians want safe, high-quality drugs as much as Americans do. Assume that Americans want low-cost health care and better medications. Then consider that, according to the FDA, there’s a quality-control problem at the Indian generic drug manufacturer Ranbaxy. The U.S. solution has been to ban shipments from its main factory, which perhaps makes sense—short term. But apparently, the FDA’s long-term solution, “when fully staffed,” is to have “12 Staff in India; seven in New Delhi and five in Mumbai.” This is nothing like a logical, long-term solution. With a staff of 12, the FDA can’t possibly conduct quality-control inspections in a country of 1.2 billion people and the world’s third-largest pharmaceutical industry.

A solution in the realm of the possible would be for U.S. pharma to build partnerships with Indian pharma. We’re great at private enterprise and quality control; we’re lousy at federal government. Bring the good parts of America to India. Collaboration to improve Ranbaxy’s quality control—not punishment and fear of Indian drugs—is the better strategy.

India’s specialty, evident in its approach to health care, is what the management-school jargon generators call “frugal innovation.” Bound and Thornton of the Nesta Foundation describe this as an ability to turn limitations—financial, material, or institutional—into advantages. The contention is that it is precisely because India is poor, wretched, and often illiterate that it repeatedly discovers ways to develop and deliver things without adequate budgets, often in strikingly novel ways. This results in products and services so cheap that the rest of the world will change, and radically, as soon as they have access to them—because, as the authors note, these products frequently “outperform the alternative, and can be made available at large scale.” Such innovations are found throughout the Indian society and economy—from cardiac surgery and crowd-sourced drug discoveries to Bharti Airtel’s model for slashing the cost of mobile phone calls. The Indian Institute of Technology in Bombay developed a prototype 10.1-inch netbook that costs less than a hundred bucks. The students who have been testing it report that it’s not half-bad.

People to whom the term “frugal innovation” appeals tend to be drawn to the other buzzword fashionable among management-school Indophiles: jugaad, which means, depending on your perspective, a culture of creative improvisation or a culture of doing everything in a cheap, sloppy, dangerous, and half-assed way. The important point is that it doesn’t necessarily mean the latter. Bound and Thornton note that the growing Indian consumer base is “highly price-sensitive” and that it’s open to trying new things. “Extreme conditions and major gaps in service provision”—the no-toilets-no-stable-electricity situation, for short—“stimulate demand for low-cost solutions in health, education and energy.” They correctly note that the implications of this go far beyond India. The “lackluster growth and deleveraging in developed economies” will, they say, “increase demands for frugal products and services and frugal innovation processes.”

As they tactfully put it, “Caring for rapidly ageing societies will require completely new approaches to health and social care, including the radical rethinking of business models and value chains that is apparent in some examples of successful frugal innovation.” What they mean to say is that the West is getting old and it’s currently out of ideas, so perhaps we should have a good look at what they’re doing over there. They also note that “low cost does not mean low-tech: frugal innovation can require or be combined with frontier science and technology.”

Consider the problem of clean water. Roughly a billion people in the world (and about two-thirds of rural India) lack access to it. Yet I’m told that a solution might be found on a dusty road an hour outside Pune, where the Swatch water filter was born. It costs $20, half the price of its nearest competitor. It works with rice husks (low-tech) and silver nano-particle filters that remove Hg2+ from water (not low-tech). It requires no electricity or running water to operate. It’s frugal, yes, but hardly unsophisticated.

An example of very frugal innovation: Have you ever wondered what happens to in-flight meals that don’t get served? I hadn’t, either, until a gentleman appeared on the IndoGenius doorstep with a lovely basket of nicely wrapped things that foreign people eat. Frugal doesn’t necessarily mean small, either. Last September, India sent a rocket to Mars. Some foreign observers laughed. Why would a still-poor country waste money by sending a rocket to Mars? Talk about missing the point. Not only did India blast a rocket to Mars; it did it for $74 million—about a tenth of what it cost NASA.

I won’t get on board the Indophile express with the unreserved optimism with which, I suspect, Nick was born. Nor can I throw in with the pessimists about the West. They’re hardly the first of their kind. Even the West-is-worst advocates of the Pankaj Mishra stripe can’t fully convince themselves that the West is in retreat. If Mishra really believed it, he wouldn’t bother to write so often for the Western press. He’s clearly hedging his bets.

We’re not doomed, though we’re certainly pessimistic. We’re asking ourselves many deep questions—and rightly so. India has been asking itself some deep questions, too. Perhaps we might try being baffled together. If nothing else, it would be less lonely.

After all, India and the West have some deep cultural affinities. Remember these lines? “In the beginning God created the heaven and the earth. And the earth was without form, and void; and darkness was upon the face of the deep.” That’s the opening of Genesis, King James version. Now consider this:

“Nor Aught nor Nought existed; yon bright sky Was not, nor heaven’s broad roof outstretched above. What covered all? What sheltered? What concealed? Was it the water’s fathomless abyss?

There was not death—yet there was nought immortal, There was no confine betwixt day and night;

Who knows the secret? Who proclaimed it here, Whence, whence this manifold creation sprang?”

The 29th hymn of the tenth mandala—known as the creation hymn—from the Rigveda is a masterpiece of the English language. I’ve been told that this is because it is a masterpiece in the original Sanskrit. I wish I knew enough Sanskrit to be sure. Perhaps we just share an Anglophone heritage. But who knows?

The United States and India have been alienated since Nixon went to China. It’s time to end that alienation. If President Obama wants to go back for another look at India—preferably, without patronizing the place—that would be great. That’s not enough, though. We have to do it. We are the People. Don’t wait for your government to do anything for you. It won’t. Indians learned that lesson long ago.

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