The $10 Trillion Prize. David Michael
is described in Nilekani’s book and is his brainchild. He says his intention is to provide access to financial services, health care, government assistance, and education to the hundreds of millions who live an identity-free life—migrants in Indian society and the left-behinds. If successful, the system will also reduce corruption. A numeric identity will enable the poor and uneducated to open a bank account; obtain a passport; receive government-assisted wheat, rice, and oil rations; and directly participate in government minimum-income labor programs.
Nilekani was born in Bangalore, the son of a mill manager. In his town, there was no prep school for the IIT entrance exam. But he was convinced, like many of his peers, that engineering was a ticket to a good job. He still beams when he speaks of being ranked number 127 nationally on the admissions test and being able to graduate from IIT Bombay in 1978. He describes IIT as the defining break in his life. A cofounder of Infosys, he helped to take the company public on the NASDAQ stock exchange, a move that created great wealth for the cofounders and many employees.
“I succeeded beyond my wildest dreams,” Nilekani told us, as he sat in the New Delhi office where he is chairman of the Unique Identity Authority of India. This office is a step down from the lavish headquarters of Infosys, where he enjoyed a breathtaking view of a beautifully landscaped campus built to celebrate the company’s achievement and stature. Outside the present building, two dozen street vendors were aggressively soliciting Delhi’s citizens to buy a winter coat on the coldest January day in recent history.
Nilekani is a rule breaker and a commanding presence in India. While many of his contemporaries left IIT for Silicon Valley, he chose to create an Indian powerhouse. “Creating a company here in India and creating jobs was more fulfilling for me,” he says. “When we started Infosys, we believed software was a major play for India. We knew we had human capital and a global market. I knew it was going to happen. I was more confident as a young man. It was the arrogance of youth.”
He says that running the sprawling global Infosys business is simple in comparison with public policy and running a new government agency. “In a company, you just need to convince yourself, a few of your colleagues, and your board—and then you make it happen,” he says. “In India, we live in a diverse society. Everyone has an opinion and everyone voices it. You have to work to create consensus.”
So far, the Identity Authority has enrolled 170 million people and is adding a million people a day across twenty thousand locations. “We hope to achieve a level of accountability and transparency,” Nilekani says. “We will use the identification system to deliver services to millions of people. We know there will be many benefits to the people—they will get food rations, better health care, and education.”
Nilekani is an inspiring communicator. Each of his sentences is delivered with animated imagery and quiet confidence. “The politicians are supportive because the people are supportive. The system opens doors for them. It is part of an inclusive society,” he explains. “It will help bring money out of mattresses and bring productive capital to the market. But we have many more stakeholders—politicians, media, the judiciary, activists—a diverse and interested population. They all must be enrolled.”
He continues, “We have been successful so far because Indians have had positive experiences from technology. They see how it has opened up markets to them. Indians have found technology liberating. The key to success in India is the same as the key to success anywhere. You need a purpose, a vision, and a tenacity to get things done. You need to overcome obstacles.”
He says that while he pays close attention to the opinion of others, he is resolute in his mission. “The cacophony in India is high. It is a part of our lives and our historical roots,” he says. “If you are in a position of leadership, you need to filter the noise from reality. Hyperindividualism is definitively Indian.”
Nilekani remains a strong India booster. He sees his country as bringing four key advantages to the world stage: the globe’s largest young, ambitious population; a culture of entrepreneurs; English as a common second language and ease of communication in global markets; and an ability to use diversity as a means to better problem-solving and integration. He believes that no single country can grow in a no-growth world, but he is confident that India will prosper over the next decade.
“We need to leverage the aspirations of the people,” he says. “The speed of change is dizzying. We need to overcome government bureaucracy and boost development. We need to create a healthy and educated population, and we need a better, faster legal system. We need to build a platform to unleash the aspirations of the people. The biggest risk is not doing enough things fast enough. Our young population can get old and angry fast. Over the next ten years, we need to lay the foundation for better platforms.”
He contrasts India and China by saying that each can learn something from the other. “The issue is bottom up versus top down. India is a bottom-up culture. China can get a road built in a week. It is a country that has had central command for a thousand-plus years. You need a minimum sustainable top-down approach for a bottom-up culture to work. Being exclusively bottom up is chaos. Being exclusively top down wipes out creativity and a spirit of independence.”
Many of China’s and India’s billionaires have created new corporate empires and vast new fortunes. Between 2005 and 2010, the total market capitalization of stocks listed on the Shanghai Stock Exchange Index rose by 144 percent, and the Bombay Stock Exchange Index grew by 143 percent. By contrast, the London Stock Exchange rose by only 5 percent, and the Tokyo and New York Stock Exchanges actually fell by 21 percent and 6 percent, respectively.9
This buoyant stock market has also produced increasingly large numbers of wealthy individuals and families—large enough that they now constitute a major portion of the economy and represent important but diverse target markets. Understanding these broader segments of wealthy Chinese and Indians is essential for companies seeking to grow in these countries. We explore these groups in turn.
China’s Superrich: The New Millennium Millionaires
In our work with China’s superrich, we have identified some important features of this fast-expanding group: they are young, new to their wealth, and spread out across China.
In 2010, according to our research, most of China’s nouveaux riches—people with more than $250,000 of annual income—had made their financial moves in the previous five years. About 70 percent of the 700,000 in this upper echelon, a half-million households, were not superrich in 2005. And the trend will continue: we expect another 800,000 households to join this rarefied group by 2015.
Another characteristic of this group is its relative youth. A striking 80 percent of China’s rich are less than forty-five years old. By contrast, only 30 percent of wealthy people in the United States have not yet reached their midforties.10 It goes to show that in a fast-growing market, it is relatively easy to turn an idea into a business and a business into a small fortune.
China’s billionaires are a bit older than the rest of China’s superrich—it takes a little longer to make the first billion. Of the top ten Chinese billionaires in 2011, only Robin Li and Ma Huateng, thirty-nine and founder of Tencent, the world’s third-largest Internet company, were under forty-five. Even so, they are still relatively young.
A third common characteristic is that the wealthy are popping up across China, not just in a few locations. For example, the billionaires hail from forty-nine Chinese cities.11 According to our research, Guangdong province boasts the highest number of rich households: 18 percent of the total. Shanghai, which is China’s wealthiest city, has 12 percent. Further behind are the eastern coastal provinces of Zhejiang, Jiangsu, and Shandong, as well as Beijing; together these account for 28 percent of China’s wealthy households. A further 30 percent were located in thirteen other tier 1 cities, and another 16 percent lived in twenty-three tier 2 cities.
As we will explain in chapter 5, the likely growth of the superrich population will take place in the cities that currently rank tier 3 or below—those with fewer than one million inhabitants. By 2015, we expect that 600,000