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The Paradox of Global Innovation: The People's Car Comes to India

This article was written by Sanjay Khanna in January 2008. We're republishing it here as part of our month-long editorial retrospective.

The launch on January 10, 2008, of the US$2,500.00 Tata Nano “People’s Car” is a watershed moment in Indian industrial achievement, no less significant from India’s perspective than the 2004 launch of the EDUSAT educational services satellite.

It is the culmination of the efforts of India’s most powerful industrialists to compete for market opportunities on their home turf, opportunities that Western multinationals rushed to take advantage of as soon as India’s economy was forced open towards the end of the Clinton presidency—after a decade or more of steady and severe pressure from U.S. trade representatives.

Western companies have worked in concert with Indian trade and commerce regulations via joint ventures and, more recently, by building significant industrial capacity within India itself (Audi is building a series of cars in India, including a new SUV, and the Audi A4 will come soon, while Nokia is planning to make mobile phones for Asian markets from India as well).

The Tata Nano points to a significant harnessing of technology, manufacturing know-how, customer insight and, to borrow an old-fashioned term, “appropriate technology” (joints in the car aren’t welded, they’re held together with adhesives).

Now to the tricky bit. What is the impact of the so-called “People’s Car” on the thinking of environmentalists in the West? Or in India for that matter?

The standard response of environmentalists in India and the West alike has been to decry the future emissions impact of hundreds of thousands of new Tata Nano’s on India’s famously congested, potholed roads, which will for all intents and purposes make it more difficult to reduce greenhouse gas emissions to more manageable levels (if the word “manageable” can be used given the stakes).

Journalist Hamish McRae of The Independent argued in an op-ed piece that [the Tata Nano] is a “great step forward for the burgeoning Indian middle class, bringing safe, affordable personal transport to families.” And: “…while more cars on the planet will mean more fuel consumed, this small, efficient vehicle represents a more sustainable environmental path than that chosen by the other great, growing economic power, China.”

A more sustainable environmental path than…China? From a serious environmentalist’s perspective, that’s like saying “a more sustainable directional path than the Titanic,” but I digress.

While noting that the West has a profound responsibility to reduce its per capita emissions (since emerging economies’ per capita emissions are much lower), as Terry Root, senior fellow at Stanford’s Center for Environmental Science and Policy (and a member of the IPCC focused on biodiversity), remarked in an interview, “A power plant in Beijing is [from the biosphere’s perspective] the same as a power plant in Boston.”

Which leads us to the inescapable fact that a Tata Nano in Chennai is, from the biosphere’s perspective, similar to a Toyota Corolla in Vancouver.

From an engineering perspective, however, it is also a significant achievement and a point of pride for many Indians. It is a design solution for the challenge of bringing safer transport to Indian families who might otherwise travel by less safe means (two-wheeled scooters or three-wheeled auto-rickshaws).

Contrary to Tata CEO Ratan Tata’s assertion that the Nano will ensure that the Indian family of four does not ride through city streets on a two-wheeled scooter, it is more likely the Nano and its ilk will in a majority of cases simply be added to the legions of motor scooters and other vehicles on Indian roads. The Nano will not replace two-wheeled scooters because Tata’s market research has surely indicated that not every family will be able to afford the jump from a motor scooter to their entry-level vehicle. India's already crowded and chaotic streets will simply absorb a river of Nanos.

So the Tata Nano, or cars like it from competing automakers (a rush of competition is about to ensue), may go down in history as contributing to both a more rapid decline of the quality of life in India’s congested and polluted cities and an increase in emissions just as we're learning how severe our climate change problem is and how little time remains to solve it

I feel like celebrating with the Nano’s engineers and designers for their success—and crying about the impact of growing vehicle ownership on the environment…in India or China or right here at home.

Such is the paradox of global innovation.



Tata Nano: The Paradox of Global Innovation
is part of our month long retrospective leading up to our anniversary on October 1. For the next four weeks, we'll celebrate five years of solutions-based, forward-thinking and innovative journalism by publishing the best of the Worldchanging archives.

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