Globalization and Venture Capital

Of, India, China, Apples and Oranges

January 15, 2008 · 1 Comment

My friend Ashutosh Sheshabalaya recently wrote a piece in which he underlined the important differences between India and China when it comes to approaches towards global warming and sustainable development.

In the piece he pointed out the intellectual laziness (and the mistake) of lumping India & China together in any debate about global warming and who bears responsibility for what. It is a brilliant read and one I highly recommend.

Some excerpts: EYE ON THE TIGERS  (by Ashutosh Sheshabalaya)

They are omnipresent, even if they lie shrouded backstage in discussions about climate change. At last count, there were almost two-and-a-half billion of them - Chinese and Indians.

Indeed, one of the most sterile facets of the global warming debate is to refer to China and India, rather than to Chinese and Indians. China and India may be among the world’s biggest CO2 emitters. But your everyday Wang or Rajiv hardly qualifies for such an honour. 

The reasons are clear: out of the world’s 235-plus countries, China and India’s populations outnumber the bottom 220 put together.  And their per-head/per-body contribution to global warming is vastly lower than that of the West.

In the typical Indian’s case  - commercial energy use is, crucially, also far below the global average.  In 2005, world electricity consumption was 2,400 kilowatt hours (kWh) per person. India’s was just 432 kWh, four times less than China’s 1,662 kWh.  Oil use, too, exemplifies such trends.

An Indian’s consumption of crude, at 0.8 barrels per year, pales against the world’s 4.5 barrels, and is less than half China’s 1.8. There is little point throwing more dazzling, vulgar beams of light by juxtaposing such figures against the Western world, lit up end-to-end for the Christmas and New Year festivities.

Still, what is clear is that the difference between India and China is at least as significant as that between China and the world. And here is a suggestion to move the climate change debate beyond noisy palavers (a word originally referring to the patronising monologues of European colonial adventurers in Africa).

Firstly, differentiate between India and China. Both may be rising industrial powers, but China’s economic growth-at-any-cost is rather different from that of India, and this difference goes far beyond the numbers referred to above.
Although similarly determined to remove poverty, democratic India also boasts deeply ingrained soft systems which have begun priming its voters for the trade-offs between economic growth and their longer-term costs. 

It was India - not China, or the West – which established the first Ministry for Renewable Energy. That was in the early 1990s. Since then, India’s Supreme Court - widely considered among the world’s most activist judiciaries - has set the country’s green agenda, from forcing metalworking and chemical plant closures to driving one of the world’s most ambitious environmental projects to date, namely the conversion of the New Delhi public transportation system to compressed natural gas. There are hundreds of other such examples.

The rest of the Indian system, too, has responded, at least as far as possible in what remains one of the world’s poorest countries.  Rural India now hosts 30 million high-efficiency ‘smokeless’ stoves, with a conversion efficiency four times higher than their predecessors. Indian biomass gasifiers – a key renewable energy technology - are exported across the world, even to squeaky-clean Switzerland. More broadly, even modern, industrialising India has chipped in. The country’s energy intensity has fallen from 0.3 kgs of oil equivalent per dollar GDP in 1972 to 0.19 kgs in 2003 – equal to Germany.

Against this, the near-comprehensive lack of awareness about such efforts outside India remains striking. So too does the innate assumption that clean air and climate change are concerns of enlightened shock troops from the West battling recalcitrant polluters in ChIndia’s wastelands. On November 23, without a by-your-leave, the New York Times announced that the US was “the world’s third largest wind (producing) country, after Germany and Spain.”

It also cited the Chief Executive of the European Wind Energy Association about a ‘second wave’ of “new countries with significant wind capacity” – among them, “Britain, Canada, Italy, Japan and the Netherlands. “ No numbers anywhere, nor a single mention of India. As it happens, figures from the Global Wind Energy Council show India in fourth position, with 7,093 MW of installed windpower capacity in July 2007, three times that of Britain, Canada, Italy or Japan, and double  that of China.

This is not to say that continuing industrialisation in India will not add to the world’s environmental woes. But pretending that India, and the 800 million Indians below the Davos line are doing nothing about it robs the debate of seriousness, and provides little incentive for meaningful cooperation with the West.

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Read more from Tosh here:

Of Googlies*, Cricket, India and China 

“The 3 Rounds of Globalization” 

The Gospel according to Goldman Sachs 

and finally, a related post: Globalizing Consumption, American Style… 

→ 1 CommentCategories: Asia & The World · China · Development Issues · Energy and Environment · India
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The rise and rise of Asia

November 12, 2007 · 1 Comment

Many of you must have picked up these two (separate) news-stories from a few weeks ago…

1.  Mukesh Ambani, Chairman and largest shareholder of Reliance Industries (India) reportedly became the world’s richest person - partly owing to the rally in the Indian stock market.

2. PetroChina became the world’s first trillion-dollar firm when it floated on the Shanghai stock exchange a few weeks ago.

I wonder if this just the beginning of The Great Reverse?

→ 1 CommentCategories: China · Emerging Markets · India

Content: Now “officially” free

October 31, 2007 · 2 Comments

I have long believed that it would become increasingly difficult to charge for content and there was only direction in which this was headed: all content (well, almost) becoming “officially” free.

Two recent developments look like nails being driven into the coffin of paid-for content:

1. Beta testing begins for Hulu and

2. How Radiohead killed the record labels 

Many of you must have also read about Prince’s giveaway and FT’s about-turn 

…and at least some of you would find this interesting:  Why Newspapers Are Screwed

Thoughts & comments welcome…as always.

P.S. The alert amongst you must have noticed that I have switched AdSense off - more on that later.

→ 2 CommentsCategories: Media · Technology & Innovation

What counts as innovation?

October 1, 2007 · 4 Comments

A few days ago I met Matthew Scott for lunch.  Matthew told me the story of “Mighty Light“.

MightyLight aims to bring “light” (literally) into the lives of millions who live in remote parts of the world and don’t stand a chance to get grid connectivity. It aims to do so by a clever product that is solar-charged and uses energy efficient white LED for lighting.

It got me thinking on how innovation in distribution channels is probably as critical as innovative product design in the context of domestic consumers in emerging markets (and particularly so in the case of BOP consumers…)

Now, if you are a purist - this may not count as true innovation.

Distribution channels (or even innovation in distribution channels) is not something that you can patent…and yet there is no doubt that products like these are capable of transforming the lives of millions through clever combination of technology and distribution which hitherto was not possible. 

In other words, they fit the criteria of high-impact and definition of a “breakthrough product” - and possibly innovation.

What do you think?

On a related note, I also spoke with Alok Singh, CEO of Novatium a few days ago - they too are doing something that is fairly unusual and exploting a business model around services that has not been tried in the PC industry before . Will it work? We dont know yet.

Is it an innovative approach? I certainly think it is.

Related Post: Has the $100 PC finally arrived?

→ 4 CommentsCategories: Development Issues · Energy and Environment · Entrepreneurship · India · Tech & Innovation in Asia · Technology & Innovation

If any more evidence was needed re. “Globalization”

September 19, 2007 · 3 Comments

…here it is.

From “Who Captures Value in a Global Innovation System?” - The case of Apple’s iPod, this table that details “the geography of $190 of the captured value in a single $299 video iPod” (Thanks, Jason).

Apple iPOD Innovation 

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and from “Dreamliner 101: All About the Boeing 787“, this picture showing where the parts for 787 come from.

Boeing 787 Parts

→ 3 CommentsCategories: Global Competition · Globalization · Technology & Innovation · USA and Asia