Indian innovation

Why is moving up the value chain so hard for India?

My friend Ravikiran Rao wrote a wonderful substack post recently titled, ‘India's IT industry has failed to move up the value chain.’ The basic question that he’s asking and trying to answer is this, ‘Why does India lag behind in innovation when other Asian countries such as China, Japan, Korea, and Taiwan have succeeded?’ Read the full thing since it gives voice to the vexation faced by every thinking Indian/Indian-American.

I’m always fascinated by the classic American dream stories of innovation. My favorite one is of Almon Stronger. Strowger was an undertaker who kept losing his business to a rival in his town. (i.e. relatives of dead people were finding alternatives.). A digression to explain old technology for the younger generation here. During the late 1800s - and you must have seen this in black and white movies - a person who wanted to speak to anyone on the telephone had to dial a number (say 0), talk to the operator and ask her (usually a woman) to connect to the person. The operator had a directory and a switchboard which she used to physically link a cable to the right contact to enable the connection.

Before the days of the telephone directory, relatives of dead persons would call the operator and ask them to connect them to an undertaker. In Strowger’s case, it is believed that the operator was the wife of a rival undertaker and she always connected the potential clients to her husband.

So, what did Strowger, a Civil War veteran and undertaker do? He invented the automatic telephone exchange which through a series of innovations is still the concept that we used until recently!

This is a 1982 documentary on the topic.

I’ve believed that rationality, cultural openness to new ideas, and contrarianism were foundational to innovation. Ergo, it follows that Indian innovation ceased or at least slowed down, when Indian cultural belief systems that forced the pursuit of inquiry were replaced by a combination of defensiveness and submission due to Arabic/Mughal/British colonialism.

Not that I agree with every one of Max Weber’s classic thesis, but I do think that a system that incentivizes creativity and commerce is far more open to innovation than ones that oppress it.

As America retreats from Protestant Capitalism and focuses on the worshipping of mammon, it remains to be seen how optimistic we can be about its capability to inquire and innovate.

I am less optimistic about China due to Mao’s lasting influence. A society unmoored from spirituality coupled with submission to authoritarianism cannot sustain its innovative capabilities. Human beings cannot be ‘bi-polar’ if a large aspect of their questioning self is suppressed.

In that respect, I have no idea how India will fare, since the foreign concepts of fate, destiny, sin, salvation etc are so entrenched in Indian minds. It will take a Protestant like reformation of Hinduism to revert back to the first principles. Many attempts have been made, but Vox Populi Vox Dei.