Billions of Entrepreneurs

Billions of Entrepreneurs
By Tarun Khanna

Report by Patrick Johansing


The Chinese and Indian economies complement each other. China quickly organizes people and resources. India hosts a highly educated and creative workforce. India excels in design work, China in manufacturing. Increased trade between these countries will strengthen both of their economies. Businesses that foster this relationship will profit from it. These countries will learn from each other, and their economies will become more integrated in the very near future.
The Chinese government has tremendous influence over the day to day activities of the Chinese people. Its one party, the CCP, operates the entire government. It decides which industries China will pursue, and it floods those industries with capital until its goals are met. This unilateral approach to the economy has earned the government the reputation of being the country’s entrepreneur, and, since 1979, their economy has grown faster than any economy on record. The government strives to operate as a meritocracy where the best and brightest in the country are rewarded with government positions, although corruption is rampant. The party takes a pragmatic approach to government; as a result, the country can’t accurately be described as communist. The party members look outside the country to decide which methods and strategies work.
China is a rising economic power. Its greatest strength is its ability to embrace foreign ideas. The government welcomes foreign business and studies it. It remains involved with its citizens abroad, taking full advantage of their skills and capital. And it is not afraid to abandon ideas that don’t work. The government expediently builds and maintains the infrastructure needed to support its industry. It strives to create an environment meant to foster economic prosperity. To accomplish this, the government has learned the value of diplomacy. China secures the resources needed in their development by courting the countries shunned by the western world. China takes advantage of its enormous pool of cheap labor and its top down leadership style by being the world’s leading manufacturer. Factories are plentiful and production is quick and efficient.
The government’s role as the single largest entrepreneur creates inefficiencies. Because government resources are plentiful and resource allocation is often made for political reasons, government backed ventures typically yield a very small return on investment. Poor decisions are also made because of the rampant corruption within the government. Good business information is difficult to find because government employees are incentivized to make their production figures more impressive than they actually are. On top of this, the CCP destroyed all meaningful market data during the Cultural Revolution. And censorship prohibits the flow of certain types of information. Censorship also inhibits the growth of soft power by stifling creativity. Chinese movies, which are heavily censored, are not well known outside of China. The Cultural Revolution and the overwhelming presence of the government have curbed an entrepreneurial culture within China.
India’s government is chaotic. A quarter of the members in parliament have criminal records, and most members are more concerned about being reelected than about seeing any public service projects through. Many government projects are abandoned when only partially complete, so government projects are terribly inefficient. The government is a staunch democracy that focuses more on property rights than public interest projects. The corruption, chaotic political process, and strength of property rights results in terrible infrastructure and a maze of regulations and taxes at various levels of the government. It takes an expert to efficiently do business amid the government fostered bedlam.
The people of India have found ways to make doing business profitable despite the inadequacies of the government. The maze of rules and lack of infrastructure has ironically led to opportunity for entrepreneurs. Many companies can’t offer certain products or services because of infrastructure restrictions. The person who can figure out a way to offer that product or service will face very little competition in that market. India’s intricate set of regulations drives many businesses abroad. Those who stay must learn to be creative. And this creativity gives the country soft power around the globe. Their movies are popular, and their software is used everywhere. India’s creative workforce gives the country its economic edge.
The purpose of this book was to point out how China and India’s strengths could complement each other. India’s workforce is innovative. Its workers are highly educated and creative. They are among the most capable designers in the world. China’s ability to organize many people around one task makes it efficient in mass production. Companies can benefit by designing their product in India and producing it in China. Both countries could benefit by studying and learning from each others’ strengths.
This book was based on Khanna’s experiences living and traveling in India and China. He used his own experiences along with expert opinions to support his beliefs. He illustrated each point with an example, so his opinions were well supported. He framed each country’s state of affairs through a brief history of relevant events. And his story-based teaching method made his writing style personable. That being said, this was not an easy read or altogether enjoyable read. While informative, it was scattered. He seemed to write in whatever order things popped into his head. And his many illustrations began to detract from his main point. I would not recommend this book.