India’s Innovation Front Lines 2009 (Part 2): Maharajas, Jewelry, and Economic Growth
Jaipur, December 22, 2009—I have come to Jaipur, a major tourist attraction, for the TiE Charter Member Annual Retreat. Some 250 charter members from across the 53 chapters of TiE are in attendance. These are some of the most successful entrepreneurs in the U.S., UK, India, Canada, Singapore, Malaysia, and Japan. The retreat begins with a meeting of the Board of Trustees of TiE, of which I am a member. In addition to a number of housekeeping issues, we agree to accept a proposal to start TiE’s 54th chapter in Brussels. There is a sizeable contingent from Boston, including Desh Deshpande (chairman of Sycamore Networks and an early investor in Airvana and A123Systems), Shikhar Ghosh (founder of Open Market, Harvard Business School lecturer), Venkat Srinivasan (founding CEO of eCredit and Rage Frameworks), Vik Mehrotra (founder and CEO of Venus Capital Management), Jit Saxena (chairman of Netezza), Amit Kanodia (CEO of Lincoln Ventures), and Amar Sawhney (CEO of Ocular Therapeutix). There are few other events that provide such a snapshot of the global health of entrepreneurship.
Not only a major tourist destination, Jaipur is also the jewelry capital of India. Coincidentally, the annual jewelry trade show is happening while I am here. I had a chance to browse the show with my wife. Despite a Rs 400 ($10) entry fee, which is a lot for India, the show has attracted a throng of consumers looking at the latest necklace, earring, and bracelet designs. There is probably hundreds of millions of dollars worth of jewelry at the trade show, and there are a lot of transactions happening. Indian women reportedly buy more gold and jewelry than any other country. No sign of recession in Jaipur.
Jaipur was the seat of one of the richest maharajas in India. It is also an example of how concentrated wealth can spawn the most amazing architecture and art but can also corrupt and unravel dynasties. The Maharaja of Jaipur is now an ordinary citizen with a fraction of the wealth his grandfather had. I am reminded that empires fall for one major reason: being overstretched militarily. This was partly the cause of the fall of Jaipur’s maharajas, as they had to spend a large part of their treasury in fighting wars with neighbors and then with the British. This an important lesson for the U.S,. We are running huge deficits to fight wars in Iraq and Afganisthan, and also to maintain military presence in Europe, Asia, and now the Middle East and Central Asia.
Had a chance to listen to the Standard Charter Bank’s Asia CEO chat about economic issues. Some very interesting insights:
- There are three economic drivers for countries: financial resources (China, Quatar), natural resources (Canada, Australia, Brazil), adaptation to change (U.S., South Korea). Other countries have to pick one of these strategies
- The U.S. consumer has been the driver of the world economy over the past few decades, now the U.S. consumer has to spend less and save more, whereas the Asian consumer has to spend more and save less, something the Chinese consumer in particular will have to learn to do.
- There are huge consumer spending growth opportunities in China and India: the U.S. consumer buys an average of 7 pairs of shoes annually. Chinese and Indian consumers buy 0.1 shoes per capita.
- Retail forms 0.2 percent GDP in India (in spite of having 15 million shops), Walmart alone is 0.3 percent GDP in the U.S.