Message to India: Globalize Or Be Left Behind

MIT economist Lester Thurow says that despite India's thriving software industry the country is in peril of falling behind China in the knowledge economy.

By Venkatesh Hariharan

October 29, 2003

Lester Thurow has seen India's programming industry and he's not impressed. Or more to the point, the famed MIT economist is unconvinced that this activity will provide the world's second most populous country with a ticket to the new knowledge economy. Thurow, who was in India recently to lecture at a seminar series organized by Times of India Group (one of India's most powerful media houses), argues that countries today have no choice: they must globalize or be left out. He cites as evidence the case of Central Africa, which has no foreign direct investments, no exports, and very little tourism. "If you don't want to participate, is there any other way to get rich? The answer is no," he says.

In the knowledge economy, Thurow says, countries that wish to stay ahead must pay great attention to education. "Ask yourselves this question-30 or 50 years from now what job will an illiterate do? By that time you will have robots to do what an illiterate does now. Today, I can get a robot that can mow my lawn and does not cost more than an ordinary lawn mower. Very soon they will be cleaning the house and doing other household chores."

Thurow emphasizes that the knowledge economy means more than just information technology and programming. "Every job will have a big knowledge component," he says. A worker in a steel mill, he says, "is more likely to sit behind a computer screen than lift anything physically. When we are talking about knowledge workers, we are talking about any job that has a knowledge component." And fewer and fewer jobs fall outside of that description, he says.

Story continues below

Countries that aim to progress in the global economy therefore have to ensure that everybody becomes literate as fast as possible. As an example of national commitment to the goal of complete literacy, he cites Cuba, the best educated country in Latin America, where every person who can read and write has to prove that he or she has taught another person to read and write in the past year.

According to Thurow, the lack of widespread, basic education in India handicaps the country as it competes with China. "More people are in Chinese grade schools than are in Indian grade schools," he contends. Thurow praises China's approach of getting everybody educated up to the third grade, then to the sixth grade, tenth grade, twelfth grade, and so on. "The worst educated province in China is better than the best educated province in India," he says. While conceding that Indian universities are superior to those in China, he says that India's "top down" strategy for developing its high-tech workforce is not as good as China's "bottom-up" approach. India "cannot allow this to continue in the long run," he warns, adding that the country "better have a strategy that gets everybody educated."