Column: Create in India

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February 27, 2016 12:19 AM

Future economic growth will feature opportunities for creativity and non-conformity in a range of occupations

In my last column, I argued that stifling dissent and diversity of views is not only wrong in absolute terms, but it will also have a chilling effect on economic growth. A key aspect of this connection is my contention that the nature of the drivers of economic growth has changed over the past decades, and future growth will depend more on innovation and the products of the mind than ever before. In some ways, this is a claim about degree rather than kind—even in the first Industrial Revolution, societies that encouraged or just permitted competition and new ways of thinking probably did better than those that were centralised, hierarchical and over-controlled their citizens. This has been identified as one difference between Europe and China in the period leading up to the Industrial Revolution.
The paradox of that original economic transformation was that its innovations led to more regimented and conformist lives for many workers forced into factories. What will distinguish future economic growth are increased opportunities for creativity and non-conformity in a range of occupations.

More than two decades ago, Richard Florida spoke of “learning regions,” which would be focal points for knowledge production. A few years later, he developed these ideas in the concept of a “creative class,” including traditional knowledge workers such as engineers and scientists, but also those engaged in the arts, media and design activities.

He went on to connect geography and demographics, arguing that creative cities would be the result of agglomerations of these kinds of individuals, who value meritocracy, individuality and diversity. Florida also posited a slightly different trinity, the three Ts—talent, tolerance and technology.

Florida’s thesis was built specifically on his views of the United States, and has been criticised for it precise empirical definition of the “creative class.” Quantitative studies for the US and other countries do not find much support for the pure version of Florida’s theory. Nevertheless, it has continued appeal, and observing Silicon Valley closely for several decades, it seems to me that its continued success has required embracing ever-widening ideas of diversity and creativity. When I was trying 15 years ago to understand the factors that might be holding back Punjab in its attempt to create a vibrant software industry, I certainly heard the argument that Mohali, in Punjab, and the adjacent Union territory of Chandigarh lacked the diversity and tolerance of different lifestyles that would attract young computer programmers in sufficient numbers.

Of course, the biggest obstacle to Punjab’s effort was government corruption, which can distort or destroy any kind of private enterprise. In a broader context, the work of Ejaz Ghani, William Kerr and Stephen O’Connell has identified education and physical infrastructure as the two most important determinants of local rates of entrepreneurship across Indian cities and regions, with labour laws and household banking access also mattering.

The lesson is that many different factors are at work in driving innovation and growth. In some cases, especially in a country like India, other factors may quantitatively swamp the relevance of tolerance of diversity and individuality for material progress.

Nevertheless, we have seen in repressive regime after repressive regime that material progress by itself is not enough (aside from the fact that repression does not guarantee or even enhance the likelihood of such progress). Citizens value individual freedoms and demand them whenever they can, in a wide variety of settings, even in the supposedly conformist societies of East Asia. Much of the ideology surrounding the new government seems to discount or neglect these values. If this attitude is based on the idea that repression and forced conformity will support economic progress, then it is clearly an incorrect assumption, even if the empirical evidence for the counter-proposition in theories such as that of the “creative class” is weak.

Where does this leave things before this government’s second full-year budget? The government is entering the middle third of its parliamentary term. It has launched numerous economic initiatives, and continued with many inherited from previous governments. The Budget will in all likelihood move things forward in positive ways on the economic front. But there is a chance that all of this forward movement will be negated by those who are so focused on historical grievances and narrow ideas of India that they are forcing actions that will ultimately suppress creativity and innovation.

Note that the problems of focusing unproductively on history and of pushing conformity of ideas are not restricted to a particular end of the ideological spectrum. In the past, the Left has had its own versions of these attitudes. But the current danger comes from those in power, or those who provide the underpinnings for occupying those roles of power. They have to decide whether they are willing to risk the chance of leaving a legacy of true material progress for over a billion people to pursue a chimera of what is ultimately a stunted vision of what India was, is and can be.

The author is professor of economics, University of California, Santa Cruz

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