No country has ever developed to advanced status using this model because outsourcing of services using information technology is a fairly new concept compared to outsourcing of manufacturing. No country has ever developed to advanced status by just being the outsourced destination of manufacturing also, there need to be further value creation, like innovation, quality control, brand creation, etc. However, being an outsourcing destination of service can be an effective alternative of being an outsourcing destination of manufacturing, minus the environmental issues and lesser infrastructural investment.
But this is not the 'model', it is just one major source of revenue among many, including manufacturing.
India's advantage and disadvantage is its massive population, like China minor improvements can send shock waves, but also like China, it is incredibly difficult to pull up the rest of the people. By 2050-2100, India will have approximately 1.6 billion people, yea I seen the thread about India population stabilizing, but I'll raise the issue again, at 1.6 China is still increasing and at barely 1, Japan is still not decreasing.
You can maybe make a couple hundred million, if that, to outsourcing information tech, but remember even today you have 1.2 billion people.
Manufacturing is needed to raise everyone up, most people cannot do outsourcing, if nothing else they cannot afford the education, or simply don't have what it takes.
Brand creation, innovation, quality control, where are you going to get it if not from manufacturing, today's China is already doing it, why? Not because the people changed it's the same people, but because they have money. Innovation is essentially capital + time. You have time, but do you have the capital.
Again, I'm not going to list individual industries or companies, because it's not about a few industries or companies, it's about the 1 billion plus we both have. 2 Trillion dollar economy sounds big until you even it out to 1.2 billion and realize how limited the capital actually exist.
I didn't use a calculator, just gave you a rough estimate, and I used 2000-2010 for India, for China 2003-2013 was apparently the best period as it looks without going through the calculator. India lost track during the UPA government tenure starting from 2004 and did particularly bad during its 2nd term for the period of 2009-2014. The growth that happened during 2000-2010 was a result of the economic reforms of the previous govt. tenure of 1999-2004 only. India was at $476 billion in 2000.
A slowdown in China might affect India to some extent, but opportunities will be higher. US economy has far deeper effect on global economy, but still some economies did well even during the 2008 crisis. Btw, 'eventually surpassing China' is not happening anytime soon, it will take some 30 to 50 years within the range of an optimistic and pessimistic estimate, the slowdown will only help in closing the gap.
I also think that China will take much more time to surpass USA than what is being popularly estimated. USA is truly in a different league in terms of technological, social and economic development, and its ability to create disruptive technologies is unmatched.
China during 2003 and 2013 went crazy with development, the entire manufacturing base of the world went to us. I mean you can go into any store, if the product is not made in China, the cash register used is, if the register is not, the table is, if the table is not the carpet is, if the carpet is not the paint is, point is, you will find made in China everywhere.
That's how we went from 70% poor to about 7% when talking $1.25 per day.
Can India do that? Not easily, especially when we still control massive amount of the market, while our consumer market isn't huge percentage, but it's still huge relative to anyone else's entire GDP, which means moving else where has to have some pretty big advantages that isn't just lower wages, as massive production can easily cut down the cost.
Not to mention, management, skilled workers, and such takes time, again not saying India doesn't have it, does India have hundreds of millions of them? The answer is obviously no. We didn't go from making a cup to assembling high tech in one day.
You think is easy, can you make a cup? I can't, do you know the challenges if managing workers? I only knew after working as an low wage employee during my college years. Nothing is as simple as it sounds.
Then there's the fact that there's ASEAN, Africa and Latin America that have all seen what China has done and want a piece of that action, a huge contrast to 10-20 years ago, when India's growth path was seen as the shining light.
Looking at that last part really shows that you think China will implode, or at least not do well, which explains why you think India will catch up. Though I'll remind you, every year there are those predictions, I can pull up 5 year old threads and show you Indian comments on this and reference it to now, or any nationality.
How China is closing the gap with USA in terms of nominal GDP though the per capita GDP is still much lower than that of USA's? Similarly, going forward India will have more working population compared to China, and India's technological, social and economic gap with China is far lower than the gap China had with USA 30 years back in terms of technological, social and economic development.
Except in order for India to match China you need to match our per capita as well, we don't need to match the per capita of US.
Also we were able to do so with the crazy amount of revenue we gained from exports, I mean it would take 20 years alone for India to match our F/E even if you do well in exports.
You have missed the scope & opportunities of service industry that I have described in my previous post. Will discuss later, though you are probably more interested in denial than discussion.
You know, not everyone is pro China and anti India, and we are the propaganda warriors, geez.
Again, service industry just doesn't have that much to offer to people who don't have education, and I don't mean basic education, I mean post secondary education of which India is severely lacking as evident by every metric that measures the post secondary education quality.
Fun fact, China's universities also built on the environmentally damaging, the land robbing, and low paying, slave labor that India apparently is too good for.
Another fun fact, we can now cut back on pollution, our parents have used that money to sent their kids to higher education and even themselves are earning a healthy amount.
You want to do service industry? Of course you will succeed, but for how many is the question, especially with competition coming from other places as well.
