TED2009
Nandan Nilekani: Ideas for India's future
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Nandan Nilekani, the visionary co-founder of outsourcing pioneer Infosys, explains four brands of ideas that will determine whether India can continue its recent breakneck progress.
Nandan Nilekani - Technologist and visionary
Nandan Nilekani is the author of "Imagining India," a radical re-thinking of one of the world’s great economies. The co-founder of Infosys, he helped move India into the age of IT. Full bio
Nandan Nilekani is the author of "Imagining India," a radical re-thinking of one of the world’s great economies. The co-founder of Infosys, he helped move India into the age of IT. Full bio
Double-click the English transcript below to play the video.
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Let me talk about India
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through the evolution of ideas.
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Now I believe this is an interesting way of looking at it
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because in every society, especially an open democratic society,
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it's only when ideas take root that things change.
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Slowly ideas lead to ideology,
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lead to policies that lead to actions.
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In 1930 this country went through a Great Depression,
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which led to all the ideas of the state and social security,
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and all the other things that happened in Roosevelt's time.
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In the 1980s we had the Reagan revolution, which lead to deregulation.
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And today, after the global economic crisis,
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there was a whole new set of rules
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about how the state should intervene.
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So ideas change states.
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And I looked at India and said,
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really there are four kinds of ideas
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which really make an impact on India.
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The first, to my mind,
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is what I call as "the ideas that have arrived."
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These ideas have brought together something
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which has made India happen the way it is today.
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The second set of ideas I call "ideas in progress."
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Those are ideas which have been accepted
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but not implemented yet.
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The third set of ideas are what I call as
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"ideas that we argue about" --
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those are ideas where we have a fight,
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an ideological battle about how to do things.
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And the fourth thing, which I believe is most important, is
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"the ideas that we need to anticipate."
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Because when you are a developing country
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in the world where you can see the problems that other countries are having,
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you can actually anticipate
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what that did and do things very differently.
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Now in India's case I believe there are six ideas
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which are responsible for where it has come today.
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The first is really the notion of people.
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In the '60s and '70s
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we thought of people as a burden.
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We thought of people as a liability.
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Today we talk of people as an asset.
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We talk of people as human capital.
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And I believe this change in the mindset,
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of looking at people as something of a burden
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to human capital,
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has been one of the fundamental changes in the Indian mindset.
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And this change in thinking of human capital
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is linked to the fact
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that India is going through a demographic dividend.
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As healthcare improves,
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as infant mortality goes down,
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fertility rates start dropping. And India is experiencing that.
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India is going to have
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a lot of young people with a demographic dividend
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for the next 30 years.
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What is unique about this demographic dividend
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is that India will be the only country in the world
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to have this demographic dividend.
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In other words, it will be the only young country in an aging world.
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And this is very important. At the same time
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if you peel away the demographic dividend in India,
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there are actually two demographic curves.
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One is in the south and in the west of India,
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which is already going to be fully expensed by 2015,
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because in that part of the country, the fertility rate is
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almost equal to that of a West European country.
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Then there is the whole northern India,
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which is going to be the bulk of the future demographic dividend.
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But a demographic dividend is only as good
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as the investment in your human capital.
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Only if the people have education,
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they have good health, they have infrastructure,
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they have roads to go to work, they have lights to study at night --
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only in those cases can you really get the benefit
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of a demographic dividend.
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In other words, if you don't really invest in the human capital,
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the same demographic dividend
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can be a demographic disaster.
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Therefore India is at a critical point
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where either it can leverage its demographic dividend
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or it can lead to a demographic disaster.
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The second thing in India has been the change in
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the role of entrepreneurs.
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When India got independence entrepreneurs were seen
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as a bad lot, as people who would exploit.
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But today, after 60 years, because of the rise of entrepreneurship,
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entrepreneurs have become role models,
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and they are contributing hugely to the society.
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This change has contributed
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to the vitality and the whole economy.
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The third big thing I believe that has changed India
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is our attitude towards the English language.
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English language was seen as a language of the imperialists.
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But today, with globalization,
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with outsourcing, English has become a language of aspiration.
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This has made it something that everybody wants to learn.
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And the fact that we have English is now becoming
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a huge strategic asset.
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The next thing is technology.
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Forty years back, computers were seen
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as something which was forbidding, something which was intimidating,
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something that reduced jobs.
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Today we live in a country
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which sells eight million mobile phones a month,
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of which 90 percent of those mobile phones
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are prepaid phones
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because people don't have credit history.
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Forty percent of those prepaid phones
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are recharged at less than 20 cents at each recharge.
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That is the scale at which
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technology has liberated and made it accessible.
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And therefore technology has gone
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from being seen as something forbidding
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and intimidating to something that is empowering.
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Twenty years back,
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when there was a report on bank computerization,
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they didn't name the report as
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a report on computers,
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they call them as "ledger posting machines."
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They didn't want the unions to believe that they were actually computers.
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And when they wanted to have more advanced, more powerful computers
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they called them "advanced ledger posting machines."
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So we have come a long way from those days
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where the telephone has become an instrument of empowerment,
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and really has changed the way Indians think of technology.
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And then I think the other point
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is that Indians today are far more
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comfortable with globalization.
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Again, after having lived for more than 200 years
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under the East India Company and under imperial rule,
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Indians had a very natural reaction towards globalization
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believing it was a form of imperialism.
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But today, as Indian companies go abroad,
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as Indians come and work all over the world,
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Indians have gained a lot more confidence
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and have realized that globalization is something they can participate in.
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And the fact that the demographics are in our favor,
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because we are the only young country in an aging world,
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makes globalization all the more attractive to Indians.
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And finally, India has had
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the deepening of its democracy.
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When democracy came to India 60 years back
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it was an elite concept.
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It was a bunch of people who wanted to bring in democracy
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because they wanted to bring in the idea of
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universal voting and parliament and constitution and so forth.
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But today democracy has become a bottom-up process
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where everybody has realized
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the benefits of having a voice,
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the benefits of being in an open society.
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And therefore democracy has become embedded.
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I believe these six factors --
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the rise of the notion of population as human capital,
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the rise of Indian entrepreneurs,
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the rise of English as a language of aspiration,
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technology as something empowering,
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globalization as a positive factor,
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and the deepening of democracy -- has contributed
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to why India is today growing
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at rates it has never seen before.
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But having said that,
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then we come to what I call as ideas in progress.
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Those are the ideas where there is no argument in a society,
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but you are not able to implement those things.
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And really there are four things here.
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One is the question of education.
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For some reason, whatever reason -- lack of money,
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lack of priorities, because of religion having an older culture --
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primary education was never given the focus it required.
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But now I believe it's reached a point
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where it has become very important.
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Unfortunately the government schools don't function,
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so children are going to private schools today.
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Even in the slums of India
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more than 50 percent of urban kids are going into private schools.
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So there is a big challenge in getting the schools to work.
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But having said that, there is an enormous desire
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among everybody, including the poor, to educate their children.
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So I believe primary education is an idea
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which is arrived but not yet implemented.
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Similarly, infrastructure --
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for a long time, infrastructure was not a priority.
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Those of you who have been to India have seen that.
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It's certainly not like China.
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But today I believe finally infrastructure is something
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which is agreed upon and which people want to implement.
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It is reflected in the political statements.
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20 years back the political slogan was, "Roti, kapada, makaan,"
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which meant, "Food, clothing and shelter."
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And today's political slogan is, "Bijli, sadak, pani,"
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which means "Electricity, water and roads."
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And that is a change in the mindset
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where infrastructure is now accepted.
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So I do believe this is an idea which has arrived,
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but simply not implemented.
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The third thing is again cities.
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It's because Gandhi believed in villages
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and because the British ruled from the cities,
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therefore Nehru thought of New Delhi as an un-Indian city.
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For a long time we have neglected our cities.
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And that is reflected in the kinds of situations that you see.
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But today, finally, after economic reforms,
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and economic growth,
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I think the notion that cities are engines
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of economic growth,
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cities are engines of creativity,
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cities are engines of innovation,
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have finally been accepted.
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And I think now you're seeing the move towards improving our cities.
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Again, an idea which is arrived, but not yet implemented.
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The final thing is the notion of India as a single market --
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because when you didn't think of India as a market,
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you didn't really bother about a single market, because it didn't really matter.
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And therefore you had a situation
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where every state had its own market for products.
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Every province had its own market for agriculture.
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Increasingly now the policies of
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taxation and infrastructure and all that,
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are moving towards creating India as a single market.
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So there is a form of internal globalization which is happening,
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which is as important as external globalization.
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These four factors I believe --
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the ones of primary education,
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infrastructure, urbanization, and single market --
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in my view are ideas in India
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which have been accepted, but not implemented.
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Then we have what I believe are the ideas in conflict.
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The ideas that we argue about.
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These are the arguments we have which cause gridlock.
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What are those ideas? One is, I think, are ideological issues.
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Because of the historical Indian background, in the caste system,
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and because of the fact that there have been many people
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who have been left out in the cold,
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a lot of the politics is about how to make sure
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that we'll address that.
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And it leads to reservations and other techniques.
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It's also related to the way that we subsidize our people,
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and all the left and right arguments that we have.
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A lot of the Indian problems are related to the ideology
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of caste and other things.
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This policy is causing gridlock.
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This is one of the factors which needs to be resolved.
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The second one is the labor policies that we have,
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which make it so difficult for
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entrepreneurs to create standardized jobs in companies,
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that 93 percent of Indian labor
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is in the unorganized sector.
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They have no benefits: they don't have social security;
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they don't have pension; they don't have healthcare; none of those things.
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This needs to be fixed because unless you can bring these people
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into the formal workforce,
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you will end up creating a whole lot of people who are completely disenfranchised.
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Therefore we need to create a new set of labor laws,
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which are not as onerous as they are today.
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At the same time give a policy for a lot more people to be in the formal sector,
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and create the jobs for the millions of people that we need to create jobs for.
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The third thing is our higher education.
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Indian higher education is completely regulated.
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It's very difficult to start a private university.
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It's very difficult for a foreign university to come to India.
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As a result of that our higher education
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is simply not keeping pace with India's demands.
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That is leading to a lot of problems which we need to address.
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But most important I believe
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are the ideas we need to anticipate.
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Here India can look at what is happening in the west
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and elsewhere, and look at what needs to be done.
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The first thing is, we're very fortunate
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that technology is at a point
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where it is much more advanced
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than when other countries had the development.
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So we can use technology for governance.
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We can use technology for direct benefits.
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We can use technology for transparency, and many other things.
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The second thing is, the health issue.
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India has equally horrible
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health problems of the higher state of cardiac issue,
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the higher state of diabetes, the higher state of obesity.
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So there is no point in replacing a set of poor country diseases
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with a set of rich country diseases.
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Therefore we're to rethink the whole way we look at health.
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We really need to put in place a strategy
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so that we don't go to the other extreme of health.
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Similarly today in the West
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you're seeing the problem of entitlement --
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the cost of social security, the cost of Medicare, the cost of Medicaid.
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Therefore when you are a young country,
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again you have a chance to put in place a modern pension system
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so that you don't create entitlement problems as you grow old.
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And then again, India does not have the luxury
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of making its environment dirty,
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because it has to marry environment and development.
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Just to give an idea, the world has to stabilize
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at something like 20 gigatons per year.
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On a population of nine billion
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our average carbon emission will have to be about two tons per year.
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India is already at two tons per year.
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But if India grows at something like eight percent,
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income per year per person will go to 16 times by 2050.
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So we're saying: income growing at 16 times and no growth in carbon.
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Therefore we will fundamentally rethink the way we look at the environment,
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the way we look at energy,
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the way we create whole new paradigms of development.
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Now why does this matter to you?
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Why does what's happening 10 thousand miles away matter to all of you?
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Number one, this matters because
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this represents more than a billion people.
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A billion people, 1/6th of the world population.
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It matters because this is a democracy.
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And it is important to prove
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that growth and democracy are not incompatible,
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that you can have a democracy, that you can have an open society,
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and you can have growth.
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It's important because if you solve these problems,
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you can solve the problems of poverty in the world.
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It's important because
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you need it to solve the world's environment problems.
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If we really want to come to a point,
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we really want to put a cap on our carbon emission,
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we want to really lower the use of energy --
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it has to be solved in countries like India.
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You know if you look at the development
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in the West over 200 years,
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the average growth may have been about two percent.
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Here we are talking about countries growing at eight to nine percent.
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And that makes a huge difference.
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When India was growing at about three, 3.5 percent
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and the population was growing at two percent,
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its per capita income was doubling every 45 years.
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When the economic growth goes to eight percent
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and population growth drops to 1.5 percent,
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then per capita income is doubling every nine years.
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In other words, you're certainly fast-forwarding this whole process
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of a billion people going to prosperity.
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And you must have a clear strategy
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which is important for India and important for the world.
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That is why I think all of you
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should be equally concerned with it as I am.
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Thank you very much.
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(Applause)
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ABOUT THE SPEAKER
Nandan Nilekani - Technologist and visionaryNandan Nilekani is the author of "Imagining India," a radical re-thinking of one of the world’s great economies. The co-founder of Infosys, he helped move India into the age of IT.
Why you should listen
Nandan Nilekani co-founded Infosys, one of India's leading information technology companies, back in 1981. After serving as its president and then CEO, he's now joined the Indian government to help lead a massive new IT project: providing every Indian with a unique identity card. to concentrate on his next great endeavor: re-imagining India in the new millennium.
His book Imagining India asks big questions: How can India -- which made such leaps in the past two decades -- maintain its demographic advantage? How can democracy and education be promoted? How, in the midst of such growth, can the environment be protected for the next generations?
Nandan Nilekani | Speaker | TED.com