Business, Economics and Jobs

India: Competitor, or source of future American growth?




Kyle Kim

Americans are used to looking at Asians as competitors, though Indian outsourcing companies have created nearly 300,000 US jobs over the past five years and Indian firms like Tata Motors are beginning to rescue western failures like Jaguar / Rover.  But as the Atlantic points out, apart from Asia-based companies, Asians themselves may well fuel the next century of American economic growth -- if the US acts fast enough to woo them to American shores.

Noting that the past two centuries of American growth were driven in large part by European immigrants (like, say, Albert Einstein), blogger Noah Smith of Stony Brook University writes:

'For most of its history, America was the "Alternative Europe." Political and religious dissidents who were dissatisfied with the ruling regimes in their homelands, oppressed ethnic minorities, and poor people who couldn't get a good job -- all made their way to the United States. Here they found a place where their beliefs, their ethnicity, and their parents' socioeconomic status mattered far less than in the Old Country. America itself benefited greatly from the inflow, gaining a huge labor force, a constant supply of entrepreneurs and creative free thinkers, and a diverse ethnic makeup that helped us avoid the kind of brutal ethnic violence and fragmentation that plagued the European subcontinent.'

But that strategy is pretty much played out. And the next wave of innovators, investors and workers will have to come from Asia.

'Asia is important not just because it is huge, but because it is growing rapidly. Trade with these countries will be incredibly important to the American economy this century. One way to facilitate trade and investment is ethnic ties -- witness the way the Chinese diaspora has invested in China, or the way Indian-American entrepreneurs have forged links between Silicon Valley and India. We need much more of this.'

But America can't simply rest on its laurels and wait for those ties to emerge and the immigrants to stream in. As a Reuters article in today's Australian Age points out, the US is no longer the only game in town, especially with sparsely populated Australia and Canada aggressively pursuing immigrants. According to the Age, Indians are already providing Australia's next wave of foreign investment, with tycoons like India's Jindal family and Gautam Adani investing millions --and even billions -- to develop mining assets down under.

'India is home to more than 7,000 millionaires whose fortunes amount to nearly $US1 trillion, data from global wealth intelligence firm Wealth X shows,' the agency writes. 'Combined with $US465 billion held by Indian nationals living outside their home country, the total is roughly equivalent to the size of Australia's entire economy.'

Meanwhile, 'analysts speculate that within five years, India could have pumped as much as $US30 billion into Australia,' which is why 'the new Australian visas will target individuals who invest at least $5 million in certain assets, such as infrastructure government bonds, in return for concessions on the usual migration requirements including qualifications and English skills.'

What does that mean for the good ole USA?

'We need to act now, because the window of opportunity for large-scale Asian immigration will not stay open for much longer. Asian nations are getting rich, which means better opportunities in their home countries. They are also aging rapidly. In China and much of East and Southeast Asia, fertility is at or below European levels,' Smith concludes for the Atlantic's blog.