Why Thomas Friedman's Protectionist Column on Innovation is Wrong

Earlier this month, the New York Times’s Thomas Friedman wrote a column about Indian startups called Do Believe the Hype. 

Friedman takes a rather extreme view of the burgeoning of India’s startups – calling this movement “scary” and “depending on your perspective…a sign of the apocalypse.”

I find this protectionist sort of viewpoint strange. Don’t social innovations, like mobile banking which enables people in rural or otherwise off-the-grid type areas access to institutionalized forms of savings and transfer of funds, benefit us all? If I can save more, transfer money more easily, become richer, and make my business more efficient, that’s good for GDP and the economy as a whole – domestic and global – as innovations can, and will, be exported.


The Economist recently posted an interview with Vijay Govindarajan, the founding director of Tuck’s Center for Global Leadership, in which Govindarajan expounds on just this idea – that while historically multinationals would innovate in rich countries like the US and sell to the developing world, in recent times this trend has reversed. I wrote about the interview a few posts ago. The major point is that cheap laptops, mobile phones, surgery, medical devices, and other socially beneficial innovations are now being conceived of in emerging economies like India and China, and then crossing over into the US, rather than the journey predominantly being made the other way around as it traditionally has.

As long as innovation is happening, and its allowed to cross borders, why should the US see this as a bad thing? One example is Tata’s development of the Nano -- the world’s cheapest car – which was built for an Indian market but is expected to be available in the US for a relatively more expensive, but still cheap, price of $4000 by 2012. Another is GE’s low cost ultrasound machine – also developed in the East and exported to the West at a much lower price than anything else that had been innovated in the US.

Friedman signs off saying he sure hopes “we’re ready” – we being the US, pitted against India and other emerging economies. Ready for what, I’m not quite sure. For less Americans to die of heart attacks because a technology from India facilitates affordable treatment? Or for more access to pre natal care because of lower cost ultrasounds? There’s a gamut of social and health benefits that could be brought about by supporting innovation, wherever in the world it originates.