Can India Offer Its Own Development Model? 

This year’s (2025) Nobel Prize for Economic Sciences was granted to three economists – Joel Mokyr, Philippe Aghion and Peter Howitt - with Mokyr getting half the award money and the other two sharing the rest. 

Mokyr developed his thesis on how societies become innovative and do things to improve the quality of life. Phillipe Aghion and Peter Howitt showed how innovation is disruptive and totally replaces the older system and follows the Darwinian theory of evolution – survival of the fittest.

Since Mokyr was the first to espouse the innovation thesis we will focus on his work. He said that social capital or education alone could not create economic growth which led to the Industrial Revolution in England in 17th and 18th century. It was the creation of cultural belief which was centered on the understanding of nature and harnessing it for human material. “Culture” affected technology both directly, by changing attitudes towards the natural world and indirectly by creating and nurturing institutions that stimulated and supported the accumulation and diffusion of useful knowledge.

Role Of Leadership 

Mokyr showed the crucial role played by the leadership of entrepreneurs, bankers, inventors and engineers who were firm believers in the “culture” and provided the necessary funds and resources to fuel this revolution. He also showed that the availability of able-bodied youth, though illiterate but believed in tinkering, were essential to the success of this effort.

He also showed that the Industrial Revolution took place because of “Industrial Enlightenment” which followed the renaissance and great philosophical and scientific thoughts of Bacon, Galileo and Newton, among others.  European intellectuals laid the foundation on which the spirit of inquiry and useful inventions were built. It was also guided by free flow of ideas propagated by printing presses, books, pamphlets and was helped by the newly minted democratic institutions like the Parliament in Britain.  Europe, though fragmented, was bound by the great ideas and inventions of steam power, and other aspects of the industrial revolution which were copied and used by people.

Mokyr also looked at the Chinese model of those times and concluded that the centralized government that China always had, produced an educational system that encouraged creating bureaucrats who choked off possibilities of technological and economic growth.  There was excessive control exercised by them.

Unfortunately, Mokyr did not look at the Indian conditions of those times.  If he had, he would have found that India was a country in decline with foreign invasions, looting by the British and famine in various parts of the country. These conditions could not produce any great innovations when the daily grind was great. Interestingly Britain’s rise as industrial power coincided very closely with the loot they got from their colonies.  And India provided the bulk of it.

Nevertheless, in India since older times Brahmin control made secrecy to prevail which prevented any new ideas from spreading. Also, it is possible that the rigid caste system did not allow the cross-pollination of ideas. This obviously did not help with the flow of knowledge, technology and useful products.  India may have in the past produced great inventions in metallurgy, textiles etc. but there was always the tradition of secrecy, so they never flowered.

Innovation Requires Freedom

Thus, the basic premise of Mokyr’s thesis is that innovation flourishes in a democratic set-up where people have energy, enthusiasm and freedom to do their thing and are not bogged down by the culture of fear, secrecy and division. Modern ecosystem in Google and other organizations in Silicon Valley, USA has shown that when people are given freedom they innovate. For e.g. Google now boasts of 5 Nobel laureates.

Yet there are also organizations in Silicon Valley where the work culture is primarily based on secrecy, deceit and tremendous greed. These organizations are losing the innovative edge. Similarly, the present US government actions have also curbed the spirit of innovation.

Nevertheless, Silicon Valley is also a testament to Aghion and Howitt thesis that innovation is very disruptive and the new technology and ideas throw out the old system and beliefs. Rise of AI and its use in every aspect of human endeavor is creating disruptions about which very few people have clues on how it will pan out in future.

Process of Innovation

Innovation is like Yoga.  A person focused on scientific discovery or technical innovation is so focused on the subject that he or she loses sense of time and is not bothered by environmental pinpricks   

The idea of getting benefits, money or rewards from the discovery or invention does not enter in the vision field at the time of innovation but comes later. Such a focused mind can only happen when the person feels secure regarding his daily needs; ease of living is ensured; and is not troubled by fear of repercussions.

A classic example is the development of Atomic Bomb during early 1940s.  Russia and Germany had capable scientists and technologists and if they had been given freedom to work without fear might have produced the bomb before America. Yet those scientists in Russia and Germany were always in fear of the secret police like the KGB or Gestapo.

Whereas in the U.S., though the time was also of essence, the freedom that the scientists and engineers had under the able leadership of Dr. Oppenheimer produced the bomb and the whole technology associated with it.

One can similarly speculate that in ancient times in India when great spiritual thought was produced there was freedom; ease of living; basic needs were adequately taken care of; leading to tremendous spirit of inquiry. It allowed lots of flowers (new thoughts) to bloom and ultimately the great thoughts of Upanishads, Patanjali Yoga and the great philosophy of Sankhya, among others were produced.  Only when secrecy and control by caste-based structure started, there was the decay in the production of great thought which led to the present-day ritualistic traditions. Thus, it is the culture of control that thwarts the generation of ideas and innovations.

When there is no fear, people innovate. Also, when there is a higher calling, for example to work for nation building and making the country great then people do very creative things. They feel vested in the story of India.

It is interesting to note that technological and economic progress of societies have happened after a noble, and higher values have been imbibed by its citizens. Higher thought provides a base on which to build and develop structures for betterment of society.

In India the golden age of development was during Mauryan period which happened after Buddhism flourished. Gautam Buddha’s teaching provided the moral compass to the great overall development.

Lessons for India

Around 18% of the world's population lives in India. The median age of this population is less than 30 years and most of them want to do something wonderful with their lives. The young students and youth of this country are our greatest resource and strength.  They have tremendous enthusiasm and energy and most of them are well fed. So, the basic ingredients of Mokyr’s thesis of innovation exist. What is missing is enlightened elite leadership which can provide direction and resources to take the innovation engine forward.

Yet in the early 1960s Mokyr’s thesis was proven during the ushering in of 'green revolution' in India. It was spearheaded by wealthy and educated farmers of Punjab who were liberally helped by the Government of India through market interventions.

Similarly in early 1990s when Government of India opened the economy and reduced inspector raj, the country responded very positively and there was springiness in the steps of its citizens, and they all felt that India was on the rise and they would help it grow.

Climate Of Fear

Presently in India a narrative of fear has been created and whenever the official line is not toed the elite are punished with tax and enforcement raids and other forms of harassment. This does not augur well for creating a healthy and robust innovation or investment ecosystem.

I also feel India can do even better than what Mokyr’s thesis shows by following our own model of development based on ancient Indian philosophical thought. Naturally this requires a leadership of highest quality which will understand deeply the history, ethos and great traditions of Indian thought. And use that ethos to create patriotism so that all the citizens work for the common good. Naturally patriotism cannot survive on empty promises or jingoism. It must be backed by real change on the ground and the perception that the future is based on fairness and rule of law.

India throughout the ages has given to the world great philosophical thought of Buddhism, Jainism, Sikhism, Gandhi’s non-violence, and Patanjali's yoga shastra. All these were based on the universal brotherhood rooted in deep reverence for human freedom and spirit of inquiry. Our leadership should follow these ideas and not be obsessed with jingoism and religious commercialization.

There is a tendency among the Indian elite to copy the development model of China or USA. To my mind both these models are unsustainable in the long run because they are based on greed for resources and control of world order. These greedy models have created a huge chasm between rich and poor, and most people feel left out of the development process.

A possible model based on Spirituality + Technology = Sustainability and Happiness may help in reducing greed, provide equitable distribution of resources and provide a new paradigm of development not only for India but for mankind. Once the mighty engine of innovation starts in India then the Darwinian evolution of the disruptive model of Phillipe Aghion and Peter Howitt will follow.