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There is enough room for optimism

delhi Updated: Oct 28, 2009 02:42 IST
Tarun Khanna
Tarun Khanna
Hindustan Times
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One of the tasks of leadership is to defy the status quo and spell out why the defiance is productive and in society’s best interests.

Let me consider three spheres where leadership has a role — economic, civil society, and politics.

The first is by far the most heartening in India’s case. There has been a flowering of productive entrepreneurship over the past couple of decades.

The second, civil society, has always been an area of interest in India, the land of Mahatma Gandhi and Mother Teresa. There have been encouraging signs of civil society ventures and non-governmental organisations (NGOs) achieving “scale”.

This is usually attainable when the organisation generates enough revenue to at least cover operating expenses and to have enough resources to attract talented people. Pratham, the NGO started in 1994 and which now helps millions of children across India with its Read India program (among others), is an inspiring example.

Another encouraging sign broadly appropriate to be in the civil society arena, even if nascent, is the emergence of philanthropy — individuals participating in ‘giving back’ to society in a meaningful way. This extends beyond setting up schools. This brings me to the third sphere, politics. We often celebrate the diversity of India, and rightly so.

Indeed, the signal accomplishment of our political system is to contain the so-called fissiparous tendencies that might have compromised the Indian state. However, that is not enough.

I often ask Indian executives, people who would be Exhibit A in Davos or any other showcase of resurgent India, whether any of them would advise his or her children to join politics. Almost nobody responds affirmatively other than those who come from so-called political families.

Talent does not find entry into politics very smooth. A corollary is limited imagination and limited leadership. If I were to point to a silver lining, I would seek solace in the fact that the next generation is at least mindful of the need for change.

This is all, thus far, about leadership of Indians in India. What about leadership outside India in the comity of nations? With the G-20 replacing the G-7 as the new permanent council for global cooperation on economic issues — and India being part of the G-20 but not the G-7 — this is a question of some global significance.

Two things are needed. First, India has to bring something to the table so as to substantively contribute but also to provide an example to emulate; second, India has to improve how she works with other nations. The first of these is under way — I refer to the entrepreneurship that has developed in the private sector and civil society, discussed above, of which many Indians can be justly proud. It represents genuine grassroots empowerment.

The growth of the second, the interface between the Indian state and others in the comity of nations, is hampered by India’s still somewhat dysfunctional politics. Several examples come to mind.

Watch India trying to compete with China for energy resources in Venezuela, Canada, and Southeast Asia recently. I do not know enough why this is so — a combination of inadequate investment in human capital in the appropriate branches of the government, and an inability of the different arms of the state to work in concert (remember the unseemly fracas some years ago between ONGC and the petroleum ministry?).

Comparison with China is instructive in at least one other respect. That country has utilised the services of its expatriates compellingly. India has, belatedly but thankfully, just begun to engage its diaspora. Having an annual Pravasi Bharatiya Divas is too little. India should do more to leverage a willing, talented and successful diaspora worldwide.

Alan Blinder, Princeton economist and former vice-chairman of the board of governors of the Federal Reserve, has pointed out that many more US jobs are offshorable than are currently offshored. Generalised leadership on this front in India would require engaging with the developed world to help in this adjustment process needed in the developed world.

So, can Indians lead? On the one hand, look at the productivity revolution in services within India, powering the world economy. On the other hand, despair the ham-fisted management of the political process, and fledgling experience with effectiveness on the world stage. In my usual burst of optimism, and at the risk of being termed pollyannaish (optimistic), I will bet against the nay-sayers. To my mind, the glass is half-full.

Khanna is Jorge Paulo Lemann Professor at Harvard Business School. He is also the author of Billions of Entrepreneurs: How China and India Are Reshaping Their Future and Yours