Billions of Entrepreneurs: How China and India Are Reshaping Their Futures-And Yours [Hardcover]

Tarun Khanna is writing from a specifically business angle, although he does provide some historical context; so this is not the place for comparisons of larger cultural issues. Within that focus, he is interesting and original. His book helps with several questions: (i) why does China so dominate Western attention when India has many comparable features? (ii) What are the differences between the two, when others often conflate them into an amorphous 'Chindia'? (iii) Why does India do badly on the most visible aspect of rapid economic development - infrastructure - compared to China? Most importantly, Khanna engages with the tangled issue of the relationship between the market and democracy that is seldom disambiguated by observers. On the one hand, Western commentators jib at the 'Asian Values' rhetoric of economic development not requiring political freedoms; at the same time, they tend to criticise democratic India's lack of decisive State action compared to China. Khanna shows how some of the less visible aspects of development are further advanced in India precisely because of its complex but open transactional democracy. Most strikingly, he inverts the significance of FDI by saying that China draws much more only because of opaque State-directed market activity and a lack of homegrown private entrepreneurship, while India's flourishing private sector and stock markets are less critically in need of FDI in the search for financial resources. Khanna does bring an Indian balance to the India-China comparisons, but is self-consciously scrupulous in pointing out how and why China does better in key areas - especially infrastructure, public medical services and education. There is still a conundrum left: if the inefficiency of the State is the primary reason for India's problems, but at the same time, a democratic state is the requirement for long-term improvements, when will Indian politics measure up to the fundamental demands of its enfranchised population? For China, of course, the question is obvious: how long can the Communist Party retain power and drive China down this particular path of focussed and controlled development? Khanna's book is a refreshing alternative to a lot of journalistic tripe going around.

When Chinese President Hu Jintao visited the United States in April 2006, where was his first stop? Washington D.C.? No, it was Seattle. The President of the fastest-growing emerging country in the world visited Microsoft and lavished praise on its founder, Bill Gates: "Because you, Mr. Bill Gates, are a friend of China, I am a friend of Microsoft." This charming anecdote is only one of many that Tarun Khanna unearths in this brilliant book about China and India. Presumably, Hu Jintao was interested in more than Windows 7? He wanted the x factor: innovation and enterprise.

Tarun Khanna, a professor of Business at Harvard Business School who specializes in emerging market firms and institutions, is well placed to describe the rise of entrepreneurship in these two giant states. An Indian citizen, who schooled in the United States (Princeton and Harvard University), Khanna has met and taught many business and political leaders in these countries--and has consulted for many emerging country firms. Khanna begins the book by challenging Western readers to `reimagine' Chine and India. He criticizes the state of ignorance about China and India among even educated Americans. Why do educated Indians and Chinese know about the U.S. Bill of Rights and the Gettysburg address yet many Americans cannot point out China and India on a map. Sadly, popular conceptions of China and India are based on outdated stereotypes: poor, exotic Indians versus noble, if shifty Chinese. Despite the stereotypes, Khanna admits concedes that there is indeed growing interest in the U.S. for information about China and India.

Using anecdotes and hard statistics, Khanna then compares India and China on many dimensions to tease out the similarities and differences between them: statecraft (efficient, consensus-seeking Chinese autocratic government versus inefficient, pluralistic Indian government); business innovation (top-down, centrally-directed Chinese innovation system versus decentralized, Indian system); and treatment of diaspora communities (China's embrace of its Diaspora versus India's suspicion of the wealth of its Diaspora). Khanna probes below the surface of current events to expose the root causes of the traits of these societies as he sees it. Why was India so suspicious of capitalism after its independence from Britain in 1947? How can one explain China's obsession with `catching up' with the West? How do we make sense of the rise of China and India? Khanna does not provide the definitive `slap down' answers to all these questions (who can?), but he offers some thought-provoking insight. From this book, I learnt about the diplomacy of Zhou Enlai, the lasting effects of Nehru's idealism and the inconceivable entrepreneurial energy of these two countries. If I ever doubted the tenacity and determination of China and India to emerge and compete on the world stage, I lost all doubt after reading Billions of Entrepreneurs.

Tarun Khanna is a brilliant academic and storyteller. However, no book can capture the entire nuance that characterizes business in China and India. For example, inequality in China is an increasingly polarizing issue. How might the Chinese state manage the vast challenge of developing its interior regions given the high inequality in the country? Given India's potential (the so-called democratic dividend), how might India `overtake' China? Nonetheless, Billions of Entrepreneurs is a must-read for anyone who has only a vague (perhaps quaint?) idea of China and India.

As a Ph.D. student, who studies entrepreneurship in emerging markets and is familiar with Tarun Khanna's academic work, I was delighted to read Billions of Entrepreneurs; it is engaging and thought-provoking. Neil Ferguson, a historian at Harvard, once said that the Great Divergence (the increasing economic gulf between the West and the Rest) is over. If this is true, then Tarun Khanna's Billions of Entrepreneurs gives an outline of how this divergence has been closed in the last three decades and how Chinese and Indian entrepreneurs are preparing to compete for a share of our buying power. The twenty-first century will be so much fun; Billions of Entrepreneurs deserves four glittering stars.

Professor Tarun Khanna describes and explains the social histories, lay cultures, religions, politics, infrastructures, resources, regional differences, and business successes and flops in China and India using personal observations, anecdotes, case histories, and statistics to help readers understand opportunities in Asia to access resources and enter markets there. His style makes the book appealing and interesting as he highlights the contrasts.

Rather than make a case for mirror images, Professor Khanna argues that good businesses will gain benefits from both countries by coordinating resources and market positions. His main example is a chapter explaining what General Electric has done in both countries.

I thought the best part of the book was arguing that natives of each country develop solutions for how to create more successful businesses. That's a point that few multinational companies are going to consider seriously enough.

I always enjoy reading about examples of superior business models, and this book is relatively rich in describing businesses that contain interesting twists on traditional ways of operating. I also didn't know the history of how many of the major new businesses in India got their start.

I hope that Professor Khanna will follow up this book with a narrower focus on the opportunities for small company entrepreneurs in both countries. I think he would do a fine job and the information would be valuable to a much larger audience than this book will probably command.