The full shape of the program at the World Economic Forum in Davos, Switzerland that starts on Jan. 25 is now clear and it is very simple--India and innovation. Compare that to previous years when the focus was on China and outsourcing. This is an important shift that is not apparent yet to many, particularly the Chinese. And I wonder if they are ready for what it implies.

Here are the facts as I know it. Innovation, Creativity and Design Strategy is the dominant intellectual theme of the conference. Some 22 sessions, six CEO workshops, some of the top design and innovation gurus of the world participating, from Roger Martin, dean of the Rotman School of Management at the University of Toronto to Tim Brown, head of IDEO. This much I knew.

What I didn't realize was the enormous presence India will have at Davos this year. Billboards, buses, parties, sessions, workshops restaurants will all have an Indian theme to them. Delegates will get Indian pop and classical music, pashmina shawls and a cd with tons of economic data on it when they sign in. The Saturday night soiree will have Bollywood dancing and music. India's 115 person delegation will dwarf China's.

There are lots of dots here but I connect them in the following way. Outsourcing of manufacturing has been one of the great economic, social and political movements of our time. Nearly all of this outsourcing has gone to China, making it the center of the global economic universe.

But that kind of outsourcing is becoming common, normal and done. The next round of outsourcing is outsourcing innovation. And here India is the center of the global economic universe. By language, training, education, and diasporadic disposition, India's role in the world economic is more brain-driven, service-driven and ultimately innovation driven. And India, chaotic though it may be, is free and democratic. You don't have an army of censors watching over the internet and blogs, as you do in China.

Now, of course, one can go too far. Great innovation is happening in China right now. Lenovo, Motorola, Haier, and some others are doing wonderful work. Huge efforts are underway to broaden the teaching of English. And universities are expanding their graduates in design, engineering, etc. Besides, the Chinese economy is so vast, it may generate its own growth and innovation.

But the Chinese economy remains defined by manufacturing. India's economy is defined increasingly by knowledge-economy work. And it has centuries of English-speaking behind it (thank you British imperialism).

Davos this year may be sending a message to China: The big challenge ahead for China is to break out of its dependence on outsourcing manufacturing and show it can be as innovative as India or any other nation. That means big changes in education, politics, economics and business.

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