OPINION> Ravi S. Narasimhan
Innovation zones could be next happy marriage
By Ravi S. Narasimhan (China Daily)
Updated: 2009-02-27 07:40

Wedding ceremonies and celebrations vary vastly across India - but in the past decade, one has assumed a homogenous hue - the NRI (non-resident Indian) Wedding.

Prologue: Parents of groom (or bride, as is the case in many an instance) fix a suitable match.

Scene 1: Boy (or girl) jets in, they meet in the salubrious surroundings of a nice restaurant, and generally agree that they will be able to live together through thick and thin, etc, in genteel American suburbia.

Scene 2: Lavish wedding (pick your style).

Scene 3: The couple jet off to live the American dream.

Epilogue: That dream is turning sour with layoffs and US restrictions or reduction of visas for highly skilled workers. And news stories (and matrimonial ads) point to a marked dip in interest toward NRI spouses as their market value goes down with the markets.

So where will these young, bright go-getters find a match?

Could it be China? Not marital (that's a choice), but professional.

The US has long been a magnet for innovators and entrepreneurs from around the world, but when the going got tough, the tough seem to - like in a similar time in the 1930s - be looking inward.

Can China fill that void? It's certainly not a new proposition. For years now - as China realized the need to move up the value chain and add value to low-cost operations which generate thin margins and keep employee compensation pegged down - top leaders have been stressing the need for an "innovation nation".

Yes, protecting jobs is a priority as the country sways against the buffeting ill winds of the global economic crisis; but more than any major economy, China has the will - and the resources - to think beyond the immediate.

The nearly $600 billion stimulus package unveiled last November was a forceful demonstration of its resolve. But when all that money is spent, the country will still be - in treadmill terms - where it was, or worse, slightly behind.

Do the circumstances warrant a modern-day repetition of 1979?

Then, it was a cautious beginning with a few special economic zones. We now know where that has taken China. Sure, low-cost manufacturing transformed China, but clearly it is not satisfied. It wants more.

Can it take another giant leap? Open up "special innovation zones" or "special entrepreneur zones"?

Now, as then, the same rules need not apply in the special incubator zones, and they could have incentives and privileges enjoyed by the economic zones of old.

Just as the special economic zones gradually became almost irrelevant as the country itself became a giant economic zone, so too could the innovation zones.

The government has announced relief measures for 10 major sectors of the economy. Can it announce a giant fund just for innovation to attract talent from around the world? Just a fraction of the $2 trillion in forex reserves would do.

Imagine Indians, Britons, Germans, Russians, Czechs, Brazilians, Arabs and Africans complementing Chinese in zones where seed money is readily available, infrastructure facilities are taken for granted, workers are in plentiful supply, there is a free flow of information, family and social needs are taken care of, and the latest bottom line doesn't threaten functioning in the next fiscal.

What a happy marriage it would be.

E-mail: ravi@chinadaily.com.cn

(China Daily 02/27/2009 page6)