Indias cultural dividend

Written by Michael Walton | Michael Walton | Updated: Apr 8 2010, 03:23am hrs
Traditional cultural productshandwoven textiles, performing arts, handicrafts and so onare often characterised as a sunset activity, a conservation niche for tourists, or a welfare case. In this line of thought, Indias future economic growth is all about modernisation and creative destruction, with traditional cultural products as candidates for destruction. Traditional artisans and artists should move into new lines of work.

This is the wrong way of thinking about Indias cultural heritage in both Indias future and the global economy. India has an immense cultural dividend that has the potential to be transformed into a source of competitive strength, as well as of employment, dignity and identity. Supporting the transformation does not require a protectionist approach, but a 21st-century industrial strategy. Such a strategy would need to tackle three essentially economic issues: taste formation, skills formation and value chains.

India is in the middle of a major, long-term transition in tastes. Globalisation and urbanisation could lead to the rising dominance of global tastes, flowing especially from the US. Yet Indias cultural heritage is sufficiently rich and the potential scale of India in the global market is sufficiently large that it could shape tastes, both nationally and globally. This is already happening. Chicken tikka masala has even been called Britains true national dish. Yoga is one of the fastest growing forms of exercise in the US. These examples are only weakly linked to local production and employment, but they vividly show the global potential of Indias traditional cultural products.

India is also in the midst of a large-scale process of destruction of skills. There are millions of highly skilled traditional artisans and artists, often from low-income groups. This stock of skills is under threat, as their products lose markets and traditional institutions for the inter-generational transmission of skills break down. Many artisans are moving into alternative work; the issue is how to capture the skills base for the future.

There is a need for innovation and renewal in the production process so that the skills deliver products that meet and shape the tastes of urban Indian and global middle classes. This implies support for the adaptation of old forms of skills transmission (supporting artisans who can teach apprentices) and bringing traditional skillsinfused with modern design and technologyinto formal institutional structures.

To effect this, traditional artisanal skills need to be linked to contemporary design processesincluding through linking artisans with new designersas part of the product innovation and taste creation process. This does not mean shifting to factory production techniques (though there is a role for that too). Indeed how products are produced is increasingly becoming a part of the productat least in the European and American marketsas people search for both greater authenticity and fair employment practices in what they consume. This is the link between support for small-scale rural and urban artisans and the modern taste creation and marketing process.

This will only be viable, and especially viable at scale, if problems in the value chain are tackled. For the value chain from artisanal or artist production to market is thick with market failuresin terms of information, credit markets, intermediation, organisation of marketing, advertising and so on. This is no different in principle from the challenges of any production process in which small or self-employed producers dominate production and markets are weakly developed. It requires resolution fundamentally by private sector actors, but with public sector support where the problems lie in specific public goods.

Can this work Internationally, think of Italy: an important part of its industrial strategy involved the transformation of traditional artisanal skillsfor example, in ceramics and shoe productioninto modern production processes with global reach in markets and taste formation.

There are also important, if niche, examples in India. The Self Employed Womens Association links women embroiderers to German markets. The firm Fabindia has a commercial production model that involves links to value chains involving traditional skills. On March 31, the Gandhi Smriti in New Delhi was the site of the launch of Jiyo!, a new organisation formed by the Asian Heritage Foundation that links organisational support for self-help groups in Bihar and Andhra Pradesh with young designers, who jointly develop new products targeted at urban and global consumers. This may well be a rather modernising version of Gandhis vision, but it is one with the potential for long-run economic viability and dynamism.

Going to scale in the transformation of traditional cultural industries in India will require a lot more, from both the private sector and government. It implies developing a comprehensive, 21st-century strategy built around solving market failures as they emerge, and not protection and welfare, about bringing innovation and, yes, creative destruction to the traditional cultural sector itself.

The author is at the Harvard Kennedy School and the Centre for Policy Research