Harvard Business School professor Tarun Khanna is about to release a book comparing the business landscapes in China and India. In an interview with the school’s Working Knowledge website, he discusses how various social, political, and cultural factors have contributed to building these two energetic–but quite different–economies.
Q: How does each country treat its diaspora in terms of stoking entrepreneurship at “home”?
A: To put it bluntly, China has embraced its diaspora, and India has shunned it. While the numbers should always be taken with a grain of salt, it is said that about 50-plus million Chinese and 20-plus million Indians live outside their home countries.
India’s tendency to shun its diaspora must rank as among the most disastrous decisions made by a nation in modern times: disastrous in the sense that a successful group of people is willing to give time, money, energy, and good will to their country of origin and is being pushed away. Fortunately, this situation has been changing in India in the last 4 to 5 years.
In China, by and large, the diaspora has played a much bigger role. In 1978, China didn’t have the internal markets to rely on, so it turned to the overseas Chinese because they were the only people who could understand China well. To other people China seemed too difficult, too alien, too foreign.
