Harvard Business School Professor Tarun Khanna was in Delhi recently. He spoke to Pramit Pal Chaudhuri. Excerpts from the interview:
What is the biggest difference between the way China and India are rising economically?
The biggest point of difference is the nature of their private sectors. China's private sector is foreign multinationals. The Indian private sector is family based, indigenous capitalists.
The answer for this divergence goes back to the Cultural Revolution that wiped out the infrastrucure for local business in China.
When the Chinese economy began developing in the 1970s-80s, it had to turn to business entrepreneurship from outside. India never had to look outside. Perhaps if the Cultural Revolution hadn't happened then China may have followed a path closer to India's. After all, there were pockets of private capitalism in pre-communist China.
You claim developing world entrepreneurs develop broader business skills than Western ones. Is that an advantage?
In developing countries so much more needs to be done by the entrepreneur to do business. To do business in India one often has to build a road or set up a power plant so you can do your actual business.
A lot of tangible and intangible things you take for granted in New York, a businessman has to provide for himself here.
Which country has a better entrepreneurial culture?
I do not equate entrepreneurship only with wealth creation. I am concerned with individual initiatives in many areas, whether it's in the sphere of politics and economics. Someone can be good at entrepreneurship in politics or in business, or in the NGO field. Wealth creation does not equate to entrepreneurship.