Growth Is Discovery, Not Design — Why Firms Build Economies Ft. Ajay Shah | Growth is Good | Ep 25

Growth Is Discovery, Not Design — Why Firms Build Economies Ft. Ajay Shah | Growth is Good | Ep 2527 Mar1 h 05 min

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<p>Ajay Shah is back! And this time, he's going granular.In this episode of Growth is Good, Rahul Ahluwalia and Ajay Shah break down why firms — not policies, not savings rates, not grand macroeconomic plans — are the true unit of economic growth. GDP is just the sum of value added by every firm in the country. Ajay lays out 4 pillars that determine whether a society produces great firms or squanders its people's energy, the 3 rooms of R&D in India, why shell companies aren't all hera pheri and why India's tax-to-GDP ratio is less alarming than we think.<a href="https://www.youtube.com/watch?v=cFiAEjVimno">0:00</a>- The world will keep throwing stuff at you teaser<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=55s">0:55</a>- Welcome back: Ajay Shah's second appearancePart 1 — Why firms are the entire economy<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=128s">2:08</a>- GDP is just the sum of all firm value added<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=203s">3:23</a>- Value added explained: from ball bearings to engines<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=279s">4:39</a>- Every productive unit — even one farmer — is a firm<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=359s">5:59</a>- Think one firm at a time: micro foundations of macro<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=388s">6:28</a>- Incentives: what conditions make firms emerge?Part 2 — Entrepreneurship & what firms are made of<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=434s">7:14</a>- What does an entrepreneur actually need?<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=479s">7:59</a>- The magic of entrepreneurship: energy, not capital<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=525s">8:45</a>- Story: Dhirubhai Ambani, petrol pump to Reliance<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=581s">9:41</a>- Narayan Murthy, Infosys, and the art of doubling<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=688s">11:28</a>- Even standing still is incredibly hard<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=717s">11:57</a>- The 6% profit reality: the math of running a firm<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=793s">13:13</a>- Capitalism: dynamic and constantly contested<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=845s">14:05</a>- Every transaction is a vote<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=889s">14:49</a>- Firms are rated every single day — elections aren'tPart 3 — Productivity, GDP and how to grow both<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=959s">15:59</a>- Productivity dispersion: not all firms are equal<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=1042s">17:22</a>- India's casual worker earns ₹1.2 lakh a year<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=1057s">17:37</a>- Two ways to grow GDP: reallocation and improvement<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=1240s">20:40</a>- New firms vs better firms: both are goodPart 4 — The history and boundaries of the firm<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=1266s">21:06</a>- Why did firms even emerge? A brief history<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=1302s">21:42</a>- Ships to India, the industrial revolution, and Coase<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=1516s">25:16</a>- Shell companies, legal engineering, and piece-rate production<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=1653s">27:33</a>- Are shell companies just hera-pheri?<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=1715s">28:35</a>- State legibility vs firm productivity: they're incompatiblePart 5 — The state, rules, and what goes wrong<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=1793s">29:53</a>- When states change rules mid-game<a href="https://www.youtube.com/watch?v=cFiAEjVimno&t=1843s">30:43</a>- Growth is discovery, not design<a href=