The roots of global success

Business Standard, 6 March 2023

All of us have noticed the remarkable presence of Indians in the leadership of global organisations: IBM, Google, Microsoft, and now the World Bank. In the best of times, it is difficult for an immigrant to succeed. Acclimatising to a new culture is hard. We must admire these individuals who worked their way to succeed in a foreign country. Here in India, there is a lot of emphasis on issues like passing an exam. But while passing exams and having a fire in the belly are important, they do not suffice beyond elementary functions.

The ingredients that shape an entire life, and matter in going beyond execution or technical service functions to a place in strategy and leadership, are culture, purpose, community, values and human qualities. What worked for these individuals is that there was a sufficiently small cultural distance in their new life, compared with their college days in India, that they were able to bridge that gap through dint of genius and hard work. There was a whole cultural package of the world of books and ideas in their formative years in India, which laid the foundation for adapting to their new life.

One aspect of this journey is the multi-culturalism and tolerance within India. Growing up in India involves accepting, absorbing and interoperating with many cultures. It involves a great deal of tolerance, for India is a medley of many kinds of people. Comfort and interoperability with diversity in the best of India taps into a deep strain of thought, going back to high ideas from Hinduism, Jainism, and Buddhism. This gives Indians steeped in this pluralistic culture a natural edge in dealing with the cultural diversity of global organisations, when compared with people who have grown up in a monoculture.

Is it merely interesting that people who grew up and studied in India are doing well, or does it have implications for India? The rise of Indians to leadership positions elsewhere in the world helps to reduce asymmetric information and thus improve global engagement with India. Each of these individuals is well plugged into the Indian elite and has a relatively accurate judgement about India. The top leadership of organisations like the World Bank, Google and Microsoft, therefore, has an instinctive common sense about India. This produces better decisions regarding India, a quiet and steady pace, and reduced vulnerability to the hype cycle. This is good for India.

Watching the trajectory of persons of Indian origin in global organisations makes us think about the meritocracy within those organisations. We in India will gain by opening up to greater heterogeneity in our internal culture, to more meritocracy in global recruitment, to more engagement with the outside world. As Google CEO Sundar Pichai has said, it would be a great day for India when a Bangladeshi immigrant heads TCS or Infosys.

If we think of narrow measures of knowledge, the top Chinese universities are now ahead of the best in India. But relatively few people who grew up in China are playing these kinds of leadership roles in the top global organisations. We see Chinese technical experts who perform many critical technical functions, but often fail to rise to strategy and leadership. Why might that be? Perhaps it takes time for this to play through, as the Chinese universities took off only in the last 20 years. Other factors at work are English, the homogeneity of Han-Chinese culture, the greater cultural distance faced by the Chinese vis-a-vis the West, and the stifling of imagination that comes with growing up under a strong state. This contrast helps us understand the essence of India's strengths.

From a hundred years ago, there has been a remarkable upper tail in knowledge in India. That upper tail has persisted into the present. There are two phenomena at work: (a) The fraction of India in the upper tail is unusually high when compared with other countries at Indian levels of development, and (b) the high population implies that the sheer headcount of persons of high capability is large. This creates the agglomeration economies of these individuals collaborating and competing with each other. As global corporations know, if you need to build an office with 1,000 good researchers, India is a good site, and this is not just about low wages.

This upper tail, in India and outside it, has led the IT revolution. India's biggest success is IT. The Indian upper tail has the globalised knowledge through which it is able to engage with the world and bring $200 billion a year into India.

How might this shape up in the future? If we think that this is about producing more IIT graduates, then surely we are in a better position today, where 16,000 students start at IIT each year, which is about eight times what it was in the 1980s. However, we should not assume that things will just go on, because many things have changed at the foundation of the phenomenon. As emphasised above, there is much more to the life journey than fire in the belly and passing exams; what matters is the entire cultural package. Many decades ago, the Indian elite had their kids attending the famous educational institutions in India. This created horizontal flows of knowledge and culture, including to non-elite kids.

That phenomenon has subsided. A lot of the Indian elite today does not play in the competitive exams, and there are greater concerns about what these exams measure. The average IIT graduate today has read fewer books, seems more like a Chinese STEM graduate, and has less of the full cultural package required for strategy and leadership in global organisations. By this reasoning, the domination of the IITs and their ilk has probably peaked. The leadership cadre will increasingly come from a more diverse array of schools in India and abroad.

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