Peter Marsh has written a fascinating three-part series in the Financial Times on India’s response to China’s extraordinary success in manufacturing. It conveys effectively the crucial point that one of the key stories in the coming decades is the outpouring of innovation from India and China, not just their growth as low-cost manufacturing or outsourcing bases.

One caveat I have on all the China/India comparisons (and a mea culpa as well, when I look back on some of my writing). Both countries are vast, varied, continental nations. To discuss them in sweeping generalizations is to display considerable ignorance. What Marsh describes happening in Maharashtra or Karnataka is a world away from Bihar or Uttar Pradesh. A recent IMF working paper discusses how some Indian states are being left behind (discussed on New Economist). The same observation could be made in China, in comparing the high-growth, relatively prosperous coastal provinces with the interior provinces.

Understanding the differences within these two countries is part of what we will need to understand our world.