CAMBRIDGE, MAâ€“Itâ€™s been a pretty stellar decade so far in the worldâ€™s largest democracy. The economy is growing atÂ nearly 9% a year, GDP per capita has nearly doubled, and its largest multinationals are on a globalÂ feeding frenzy, gobbling up anything they can get their rupees on.
FromÂ steel makersÂ andÂ aluminum manufacturersÂ toÂ fabled liquor empiresÂ and Britainâ€™s belovedÂ Tetley Tea, corporate India is expanding aggressively in its quest to unseat Japan and China, Asiaâ€™s two incumbent economic powers. Perhaps not surprisingly, capitalism suits the former British colony well â€” at leastÂ in the aggregateÂ â€” and with the birth ofÂ the worldâ€™s cheapest carÂ andÂ a play for Fordâ€™s premium European business, Tata looks set to usher in a new era of Indian industrial leadership.
It isnâ€™t just that the Nano will cost a symbolic 1 lakh (US$2500) , or that its 33 horsepower engine will reach speeds of 65 miles an hour, or that transportation in India will be revolutionized in ways that inventors of theÂ Segway only dreamed. More important than the car itself is its underlyingÂ raison dâ€™etre: the emergence of Indiaâ€™sswelling middle class, set to grow from 50 million today to nearly 600 million by 2025. Following similar demographic and economic trends in China, these first-generation middle class consumers will fuel the next cycle of global economic growth for automobiles, electronics, mass media, food, and pretty much everything else weâ€™ve come to take for granted over the last fifty years.
The story isnâ€™t all roses, but the challenges of sustainable and responsible economic development are slowly being addressed. Technological advances in agriculture, structural advances in micro-finance and micro-capitalism, infrastructural developments within and between major urban centres, and demographic trends will continue to fuel investment and innovation across the continent.
That said, for those of us living in the peaceful economic bosom of the G8, Indiaâ€™s latest foray into industrial design and manufacturing could spell the beginning of the end of heavy industry in Western markets, and fuel the push to reinvent the economies of the developed world. Traditionally, systemic shifts of this magnitude involvedÂ sizeable labour migrationsÂ and ultimately some measure ofÂ political instability.
One can only hope that Canadian policymakers â€” particularly in auto-dependent Ontario â€” are students of economic history and move to educate and innovate away from their 20th century manufacturing addictions before the knowledge-based industries of the future are too far out of reach.