Sunday Posts

We have come to love Innovation as the engine of growth and progress. Being innovative is no longer a pejorative, but a compliment; even totalitarian Governments set up innovation ecosystems and Analysts put innovation premium on company stocks. The Corporations want to reinvent themselves as colourful innovation hubs, the universities justify drawing public money for they bring about innovation, and it is not unusual for entrepreneurs in India to pray in front of an idol so that they can be more innovative. In short, innovation is eating the world - and, everyone, with power and money, wants to bring about innovation. As we celebrate innovation in conferences, it is easy to forget innovation is usually a complex affair. We love to speak about magical discoveries: A naked Archimedes running through the streets as he discovered his law, Galileo figuring out the secrets of the pendulum in one night after observing the Cathedral's chandelier swinging about, Darwin's great ...

There is this lovable term used in England - The Flat White Economy! For the uninitiated, this comes from the variety of coffee the twenty-something geeky youngsters working in the 'creative economy' in London, one of the world's leading. This, an uninspiring vision of placid coffee, seems to capture the great promise of economic renewal of industrial wastelands of North England, as well as the inner city precints of London: It no doubt offers me a catchy term to make my point about the City economies. But, to clarify, while I like the term, I use it literally. As a lover of good coffee, the term conjures up milky blandness rather than exciting aroma, and regardless of the implicit euphoria behind its coinage, I see it for what it is - the really 'flat' growth in a mix that lacks proportion or equity, obscuring the inevitable disappointment in frothy rhetoric and pricey labeling (I usually order a White Americano!).  This is not a resentment of a new taste...

If this blog needed a purpose, I have one now. I started writing just for the sake of writing, and later, used this space for reflecting on my experience as well as exploring ideas and connecting with people. It was a serendipitous journey, with twists and turns of my wandering mind suitably exposed, and I assiduously avoided being boxed, or turning this blog into a commercial promotion of myself. And, this is not a holier-than-thou stance - I indulged in usual narcissism on Facebook and tried to do desperate social climbing on Linkedin - it is just plain love, of words and of ideas and of conversations, and I wanted to keep this one space uncorrupted of the other 'social me', in order to welcome them as they came.  But then there is something I love. And, all my wandering is really a quest for that one thing, in a way. My otherwise pauseless life may not allow me the space to love anything except for the socially mandated, all the middle class stuff about careers, mortga...

Why does one care for new ideas? Because new ideas are central to economic growth. And, without growth, we will have no modern economy. Because one essential part of the modern economy is credit, which rests on the assumption that we will have more than we have today. If the economies stop growing indefinitely, credit will disappear and there will be no 'modern' economy. The mere hint of no-growth will be the economic equivalent of an armageddon. Ideas, in a way, are the protean agents that mine the future for the present. Think of ideas as a tool that is curving out bits of the future for the present day, doing in the real economy which the financial mechanics of credit creation is doing in the money economy. One can call them therefore the lifeblood of the economy, because without these new ideas, we won't have a view of the future, no optimism and therefore, no economy. And, yet, idea is a painful thing. To be really successful in what an idea does, one nee...

It is commonplace to talk about education for economic growth, but our ideas about what leads to  economic growth somehow defines what kind of education we may want.  As Joel Mokyr highlights in his eminently readable 'Lever of the Riches', there are four 'ways' to economic growth that the standard economic history brings forth.  First, what he calls the 'Solovian Growth', after Robert Solow, the doyen of economic growth theorists, which hinges of capital formation. In this model, the entity, the country in the standard formulation, saves more than it produces, and build capital stock in terms of infrastructure, human capability and investible capital. Second, what Professor Mokyr calls 'Smithian Growth', this alternative route to growth hinges on trade, either within the country, between the villages and cities, or between regions. The more trade there is, greater the rate of growth. Third, there is a theory that population growth itse...

The Global Innovation Index, produced by INSEAD and others, is built around seven factors - Institutions, Human capital and research, Infrastructure, Market sophistication, Business sophistication, Knowledge and technology outputs and Creative outputs - and measures an economy's ability to innovate. India has continually slipped in the rankings, from 62nd in 2011 to 64th in 2012, to 66th in 2013 and now at 76th in 2014. Indeed, it is useful to contrast India with China, acknowledging the coveted hyphenation that many Indians desire: China has remained on the 29th position during this time, losing and recovering the lost ground during the in-between years (though China includes the territory of Hong Kong, which is treated separately and is a top 10 territory in these rankings). Not that rankings matter much, but they are useful reminders of where one is going. India's decline tells a story in the context of the rest of the world. In the past rankings, India was ranked 2nd...

I wrote about Reverse Migration at various times on this blog, and it is interesting to read these back posts now to see how my views have changed over time.  First, in 2009, when Vivek Wadhwa made the case first, I was excited about India's opportunity and wrote Reverse Migration: India's Chance . My point was that the relatively unaffected Indian Economy would benefit from the phenomena of global Indian talent returning home because of the Great recession. However, India's economy stalled thereafter. But even before that, returning Indians would stumble onto my blog post and wrote about their experiences, mostly of disappointment. I also realised that I misread how open India would be to the phenomena - I was subject to resident Indians' ire for assuming that these returners would be, should be, given a red carpet return, because they did not stick around to make India's prosperity happen. The arguments, strangely enough, were the usual arguments one mad...

Skills education is often seen as a panacea for poverty, and developing countries, in Africa and Asia, pour enormous sums of money to build skills infrastructure. There is an intuitive sense behind all this: The policy makers in these countries look up to the industrialised nations and ask what they need to get even. The need for infrastructure, physical and human, become too obvious both from the study of economic history and a casual walk down Oxford Circus. It also makes a lot of political sense: The government can build elaborate employability programmes to impress its rural population eager to join urban life, and the middle class voters, disappointed with the lack of skilled masons, plumbers and electricians, do not mind. Indeed, all this makes sense if one believes that the world economy is moving in a straight line, but one clearly knows it isn't. Again, a reading of economic history or a casual walk down Oxford Circus makes the central idea quite clear: Things are ch...