The conventional wisdom says that English is the language of business. But to what extent is business - and economic growth, for that matter - contingent on fluency in the language? An examination of the rise of India and China in the global economy offers insight into the relevance of language as a driver for growth, and reveals that the conventional wisdom may be right, but needn’t be applied universally.

It is worth considering first the growth story unfolding in India. After years of a cool Asian economic climate, in the late 1990s India emerged as a force to be reckoned with, as high value currencies such as the dollar, pound, and marc were leveraged by the cheap Indian rupee and a large supply of great labor. But what facilitated the transfer of wealth from richer countries to a developing country like India was - in a large part - an English-speaking lower class that could replace English speakers in many English-speaking ‘back offices’ located in rich countries, where costs of living demanded that high wages were paid to workers. The result was a massive shift not only in service jobs that led to the now ubiquitous Indian call centers, but also a shift in technology jobs, as a skilled, English-speaking engineering class emerged that was willing to work for a fraction of their American counterparts. Of course, all things do come to an end, and with the creation of a broad-based middle class, so came with it the seeds for tougher times: the rupee appreciated on world markets and prices rose, leading to a much more expensive Indian workforce that made many foreign companies reconsider their investments there. Nevertheless, a newfound middle class ensured that there would be domestic demand for Indian goods and services allowing India to ‘fish for itself’ in the pursuit of economic growth. Had India not had such a large English-speaking population, it is fair to say that it would have remained off the radar of many foreign companies that sought to cut costs, and thus would have remained without the middle class necessary to grow the economy from within.

China, however, offers an interesting counterexample to the utility of English. Whereas in India about 50% of the population speaks English fluently or marginally as a second language, in China that percentage is somewhere in the low single digits. Nevertheless, China’s economy has managed outgrow India’s at a rate of almost 2 to 1. The Chinese growth story, however, is a different one from India’s. Where India’s growth was in a large part the result of job creation in the services sector, which led to a growth in jobs elsewhere in the economy to support a new middle class, China’s growth was driven by the cheapness of labor and thus the cheapness with which goods could be manufactured and sold on the world market, in no small part also due to the country’s manipulation of currency. While the country has made great strides towards teaching English, China never required English on the same scale because growth was fueled by Chinese-speaking factory workers and not English-speaking administrative staff and engineers. Nevertheless, the Chinese growth story would have never unfolded without the demand for Chinese goods from America and Europe, which, to be sure, was facilitated by the existence of Chinese businessmen who spoke English and - to a lesser extent - Chinese expatriate businessmen living in the west who were able to get deals done.