The Economist on China’s and India’s Tech Industry

[This part via Rajesh Jain]

The Economist :

“…although China and India are often lumped together as tomorrow’s technology titans, there are marked contrasts in their technological development. They have roughly the same population, but China spends 2.5 times as much on technology as India does. It is already the world’s largest mobile-phone market, and the second-largest market for PCs. Moreover, at the end of 2005, China had around 110m internet users, compared with 51m in India; and today China has 430m mobile-phone users, versus 120m in India. The two countries are adopting technology at different paces and in different ways.”

The next paragraph, though, has a few interesting points. Some of them are wrongly justified:

“Centralised economies can pour resources into projects and direct the development of entire industries, something that is much harder in India’s sprawling, bureaucratic democracy.”

The classic problem with centralized economies is that they are extremely slow to react to change! And I’m surprised the writer didn’t choose to examine how sustainiable this sort of planning is, especially given that the technology industry is constantly in a state of flux. The “direction of development” of the technology industry is, today, being decided in all sorts of places – the USA, Finland, India, Japan, Brazil, China, Korea – and there is simply no way that you can lead this industry by committee directives.

For mobile phones, China established a second state-owned operator to challenge the incumbent, while India’s operators remained tangled up for years in legal fights over a botched regulatory framework.

Ah. Very smart. Imagine another BSNL – wouldn’t that be cool! I wonder, though, if this won’t result in a cartel, which then isn’t too different from having a monopoly. India’s myriad private telecom service providers all driving prices and margine relentlessly down, seem a better bet than China’s state owned behemoths.

China has also tried to develop its own technical standards so that it can avoid paying royalties to foreign firms for using intellectual property.

In a world built on open standards, this is not very smart. Open standards, proprietary implementations are going to be the norm for a while.

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