Believe the Hype About India and China

[sunkan]

" If you thought the rate of change was fast thanks to the garage innovators of Silicon Valley, wait until the garages of Delhi, Mumbai and Bangalore get fully up to speed. I sure hope we’re ready. " -- Quote from the article.

I sure hope this turns to reality and the tide rises the rate of innovation that has meaningful social impacts on problems like poverty and disease plaguing the developing nations.

[Hoff]

Hype aside, one of the key pieces of American technology development is a very simple one.

Bankruptcy.

The legal ability for an individual or a business to fail.

Seriously.

If I don't get buried in a mountain of business debt from a (legitimate) business failure, then I am free to try again with a different business idea or different business model, and to pivot and to hone my business skills, and to see what else might work with the customers and with the investors.

Countries and regions with punitive laws around business failures and particularly around the legal exposures and debt incurred by legitimate businesses will inherently operate at a competitive disadvantage.

Carefully balancing the societal benefits and costs of non-putative bankruptcies (and of non-putative layoffs, for that matter) is critical in encouraging new business ventures.

[jbarham]

This is a great point. The difference in bankruptcy law between the US and e.g. France or Germany creates an incentive for US entrepreneurs to take more risk since if things don't work out (and they usually don't) they can dust themselves off and try, try again without crippling long-term debts or too much of a social stigma.

On the other hand, relaxed bankruptcy laws can be taken too far as in the housing crisis since homeowners took in huge profits by flipping houses during the housing bubble but can just walk away from their mortgages if they're underwater which means the loss is eaten by the banks/taxpayer.

[adriand]

I think the hype is real, at least the hype about the upcoming wave of major and disruptive technology companies based in India and China. I think American startups and established technology firms will compete effectively against these companies, but the effect on other countries with a less-established startup and technology investment culture is more worrisome.

I'm particularly referring to Canada (which I'm most familiar with since I'm Canadian). Canada continues to fall behind the US in terms of productivity and technology investment. Apart from a few of the major population centres and Kitchener-Waterloo we have little in the way of a startup culture. We do have a strong tradition of entrepreneurship but it appears to me that this is mainly focused on traditional and particularly service-based businesses.

Technology firms here will also tell you that Canadian companies are slower to adopt new technologies than companies in the US, India and China.

Countries like Canada that have let innovation stagnate because they currently enjoy a high standard of living may be in for a harsh wakeup call as Indian and Chinese companies start to really come into their own.

[fiveo]

I second to you. In Vancouver, I've seen many companies who have probably live as long as 3-5 years before they crashed and closed down permanently.

Most of the issues are related to their inability to innovate and their use of old technology (and methodology).

I don't mean to be rude but sometime I viewed Canadian technology companies as the western-but-India-in-the-past kind of company.

Many companies in Vancouver is looking for 7-10 years experienced (enterprise) Java developers. Gone is the need of fresh-grad/junior developers position.

Guess what the fresh-grads do?

1) Go back to Asia (most immigrants came from Asia)

2) Go south of the border to Google, Microsoft, or Amazon.

The cycle breaks down there. Tough really.

I've been here for almost 10 years since college and I'm starting to plan my move to south of the border or to Asia.

[rasmus4200]

As a Canadian developer I agree 100% and this very thought is what keeps me up at night.

We are soft. Our duvet's are too fluffy. And we can't rely on our natural resources forever.

[roc]

My current feeling is that the culture barrier will focus those growing markets inward before long.

As China and India continue to modernize, their innovators will enjoy much more success in feeding their native markets. Simply: if you're a software entrepreneur in India, does it make more sense to compete with western software companies for western business? Or to sell software that runs on the kinds of machines Indians own, architected with Indian cultural preferences at the fore-front and can grow along with the growing Indian market?

You're hopelessly behind in competing with the west for western markets, but unbelievably advantaged in competing with the west for native markets.

They're only focused on us, for now, because their wages are so advantageous as to make up for the pains in bridging the culture-barrier. As they continue to modernize, those wages will rise well past the point where it makes business sense to continue.

[jerf]

Uh, exhortations to "believe the hype", phrased in exactly those words, are usually a sign of late-stage evolution of the hype, shortly before the collapse of the hype. I remember them from the dot-com bubble, I remember them from the housing bubble...

(I believe that India and China have a relatively bright future. I do not believe in the narrative whereby the United States faces problems, because we live here and can see them, but China and India must inevitably be on a smooth trajectory upwards with no bumps, because we don't live there to see the bumps and in China's case we are probably having the bumps deliberately and systematically hidden from us. Just as Japan's inevitable triumph over the entire world turned out not to be bump-free either. In fact, doesn't anyone learn from history...?)

[sushi]

I'm glad to see EKO (http://eko.co.in/index.php) making some solid progress as this post tells. It's nice they have started to make a profit.

I should tell that they have been trying this since last few years and one of the reason why the idea worked is that this startup reached out to people personally. The same is the story of Red Bus (http://techcrunch.com/2010/03/24/yes-you-can-build-a-web-com...) which reached out to the bus companies.

The trend I am seeing is that IT companies in India have bigger challenge in making people adopt the technology than marketing or anything else.

[known]

http://www.obopay.in/mobile_obopay.html and http://www.yesbank.in/mobilebankingpayments.htm have a pretty straight forward solution.

[varjag]

You see, it's very easy to turn this story around, just alter the caption.

"It takes an American executive to disrupt cumbersome Indian banking", "With globalization, Americans go on to innovate overseas", "U.S. education is the driving force of innovation in modern India" and so on.

Note: they could probably do just fine with local education and an Indian COO. Point is you should be cautious with extrapolations from a single story.

[FraaJad]

The COO is italian, not American. They all used to work in America, that's all.

[moultano]

To me India seems as precarious as it is promising. Against all this entrepreneurial spirit is the possibility that northern India will drain its aquifers and its rivers dry, and that climate change will make refugees of the entire nation of Bangladesh.

[sagarun]

Yes it is an achievement. Even a beggar owns a mobile phone. As an Indian what really bothers me is, you can get free sim card but to get a decent meal you have to spend 50-90 Rs (1-2$). Again most of the worker's daily wage is (3-4 $). The food prices are keep on increasing. Are we missing something?

[train_robber]

Just wondering, were do you live in India? A 'decent' vegetarian meal (the kind I have everyday) costs Rs 25 from a restaurant. And possibly Rs 10-15 ($0.2) if I cook myself.

[itsnotvalid]

Besides the line regarding Mt. Everest may relate to China, the rest of the post is about India.

What is really the truth is that the wealthy nations are unheard of the situations in poorer countries. What is obvious in our community (banks, credit cards) is not at all in some areas in the world. It's rare to see the problems when the problems are not in front of us.

The good thing about cheaper technologies is that, they are more accessible, could improve the conditions of people faster and have more impact.

[namityadav]

Mt. Everest is in Nepal, which is a country between India and China. Although IMO, it's more like India than China.

[badmash69]

May I suggest reading "Fortune at The Bottom of the Pyramid" by C.K. Prahlad "

This is an excellent guide for innovation for India and much of developing world. Companies like EKO etc. have taken these lessons and are building upon those ideas.

[benzheren]

China has its own problem now. The inflation is really which drives the living cost and labor higher. Lots of companies are trying to seek cheaper labors in countries like Vietnam. But one thing is true that mobile is really big in Asia. With great infrastructure, you can have signals anywhere including in the subways which drives mobile consumption.

[pdelgallego]

The company I used to work has closed their "software factory" in ShenZhen, and expand the other one they have in Manila, because of the higher cost in China.

[silverlake]

Don't believe the hype. I sincerely hope the BRIC countries do well, but you can't assume they will grow at the same rate for the next 20 years. There are Earth shattering events every few years which could derail any of these countries. Politics, war, natural disaster, tech revolutions, etc. The US can adjust to change faster than anyone.

[known]

Truth != Hope != Hype

[known]

836 million Indians survive on less than Rs. 20 (less than half-a-dollar) a day. http://goo.gl/OUJ5F

[desigooner]

Is there a way to flag users?

This is the umpteenth time that this user (known) has literally copy pasted the same responses every time any article with India as a focus comes up on HN .. caste this, less than $1 that, etc etc.

Wish there was a way to ban trolls ..

[known]

India has a 5000 years old hidden dark side viz http://goo.gl/K8Pg

There are 17,000 cults aka castes in India.

They're destroying India because they literally hate each other.

To strengthen India, it is better to give autonomy to FC/BC/SC/ST/Minority regions with a single passport and currency across these regions viz http://goo.gl/A8F6

[shabda]

> They're destroying India because they literally hate each other.

I am from India, and I assure you I dont hate anyone based on their caste.

[rao]

I don't understand the use of URL shortners. I wish I had enough karma to down vote you, for not posting actual URLs.

[gaius]

Indeed. It gets little play in the West because Indians aren't as obviously un-alike as whites and blacks (and the only Indians most Westerners encounter are upper-caste), but the Indian caste system makes the worst excesses of Apartheid look like a teddybear's picnic.

[known]

China prospered without India's dummy democracy and casteism.

Indians are brainwashed to believe that (voting in elections == democracy) and a solution to all problems.

[lobo_tuerto]

You wouldn't believe it does only happen in India, would you?

[known]

India is a dummy democracy. Only 84,000 Indians out of 1,173,108,018 have the courage to vote their conscience. http://goo.gl/jNi1r