Projected GDPs, via The Guardian Datablog
Jon Evans of Tech Crunch compared China and India to operating systems.
There’s an essay by Eric Raymond, called The Cathedral and the Bazaar, which is famous in the software world. It compares and contrasts two models of software development; the top-down “cathedral” model of eg GCC, and the chaotic—sometimes verging on anarchic—bottom-down “bazaar” model of eg Linux. I think there are parallels between software development and economic development, and that China is a cathedral (or maybe even a closed-source Microsoft) whereas India is a bazaar. And in the software world, eventually, the bazaar won.
A more modern comparison might be iPhone to Android. One is big, impressive, and closed up. The other is also big, a bit more chaotic, and open. The more open model is currently pulling ahead.
China Is The iPhone
Image via Penn Olsen, which also has a great infographic
The iPhone is a very much a product of central planning. It is top-down cathedral design to the core, down to the religious architecture of its showrooms. Everything flows from the genius of Steve Jobs and free markets (iTunes, App Store) are permitted within designated zones. Nobody messes with the core.
In the same way, China is literally a product of central planning. Major projects are planned from the center and everything flows from the communist party. Free markets are permitted, but within an environment of rigid state capitalism where everything is directed towards a core interest. And nobody messes with the core.
India Is Android
Image via androidtoday.in
The Google Android platform is nominally open-source, but not really. Products are still rolled out by Google. It’s just that getting into the App Store is a lot less onerous for developers, building phones is easier for manufacturers (Android is free) and buying phones is thus easier for average people. It’s not as slick or well-designed a user experience as Apple, but it is a lot more accessible.
In the same way, India is still a very bureaucratic country. People are, however, innovating by making stuff for cheap. The Global Innovation Index highlights this in a recent report, where India is ranked ninth on innovation efficiency. They talk about Indian jugaad (resourcefulness) and reverse innovation (like the Nano, or a $50 tablet). India is effectively leveraging its poverty as a source of inspiration. Which I think is a good source.
Today China and India are both growing, but it’s not like they’re creating anything especially new. They’re simply reaching western standards. Once they get there, they’ll have to push beyond, otherwise their economic engines will stutter and stall.
In the same way, Android and Apple are both growing, but they both need to keep innovating once the market is full. Apple depends on the genius of Jobs, which is a limited quantity. China depends on a huge influx of resources and an expensive police state. While things are good its great, but it’s questionable how sustainable the model really is.
India, by contrast is not as centrally planned and thus appears extremely chaotic. Below the surface, however, entrepreneurs are able to operate with some level of benign neglect. They’re starting like Android, behind a market leader putting very serious numbers on the board. India’s more open culture, however, may give it Android’s power to prevail in the long run.