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How can india become globally competitive
How can India become Globally Competitive? (w.r.t-GCI) Presented by - Shwetan Burkule
Flow of Presentation Definition - Global Competitiveness Importance About GCI 12 Pillars for determination of GCI. India vis-à-vis the world Obstacles for India to be globally competitive Steps for Attaining Competitiveness Solutions for becoming globally competitive References
Global Competitiveness Global Competitiveness definition - Ability of nation to provide quality products and services at competitive prices thereby providing adequate returns. Competitiveness is the Comparative concept of the ability and performance of a firm, sub-sector or a country
Importance of global competitiveness To increase Productivity. To encourage FDI’s. To increase the living standards. To maintain the balance of trade between import and export of an country. To gain macro economic stability. For the economic development of the country.
Global Competitive Index - GCI GCI Definition - An international ranking of countries which uses economic and other information to list countries in order of their competitive performance. Developed for the World Economic Forum by Columbia University Professor Xavier Sala-i-Martin and originally introduced in 2004. The Pillars include: Institutions, Infrastructure, Macroeconomic Stability, Health & Primary Education, Higher Education & Training, Goods Market, Efficiency, Labor Market Efficiency, Financial Market Sophistication, Technological Readiness, Market Size, Business Sophistication & Innovation.
1. Institutions Public Institutions Private Institutions 2. Market SizeThe PPP decides Market size of the country.The Consumption pattern of the consumer.
3. Infrastructure Overall infrastructure quality Railroad infrastructure development Quality of port infrastructure Quality of air transport infrastructure Quality of electricity supply Telephone lines
4. Macro economic stability Government surplus/deficit National savings Inflation Interest rate spread Government debt Real effective exchange rate
5. Health and primary education A. Health Infant mortality Life expectancy Tuberculosis prevalence Malaria prevalence HIV prevalence B. Primary education Primary enrolment
6.Higher education and training Quantity of education Secondary enrolment ratio Tertiary enrolment ratio Quality of education Quality of the educational system Quality of math and science education Quality of management schools On-the-job training Local availability of specialized research and training services Extent of staff training
7. Goods Market efficiency Distortions - Efficiency of legal framework - Extent and effect of taxation - Number of procedures required to start a business - Time required to start a business Competition - Intensity of local competition - Effectiveness of antitrust policy - Imports - Prevalence of trade barriers - Foreign ownership restrictions Size (Export & Import)
8. Labor Market Efficiency Flexibility - Hiring and firing practices - Flexibility of wage determination - Cooperation in labor-employer relations Efficiency - Reliance on professional management - Pay and productivity - Brain drain - Private sector employment of women
9. Financial Market Sophistication Ease of access to loans Venture capital availability Soundness of banks Local equity market access
10.Technological readiness Firm-level technology absorption FDI and technology transfer Cellular telephones Internet users Personal computers
11. Business sophistication Networks and supporting industries - Local supplier quantity - Local supplier quality• Sophistication of firms’ operations and strategy - Production process sophistication - Extent of marketing - Control of international distribution - Willingness to delegate authority - Nature of competitive advantage - Value-chain presence
12.Innovation Quality of scientific research institutions Company spending on research and development University/industry research collaboration Government procurement of advanced technology products Availability of scientists and engineers Utility patents Intellectual property protection Capacity for innovation
How to be Globally Competitive Need to address one basic question:Why are the heavyweights of India so lightweight globally?Reason is that either we have not aspired to go global or we do not have global orientation. Global Repositioning of India Competing in Global Market
Competitiveness among BRIC and India According to Goldman Sachs report on 22nd Feb 2008, India is the more economic growth engine among the BRIC nations. This is because of improvement in the ranking of PPP (Purchasing Power Parity) of India from 5th to 4th position. Also India is the youngest country in the world as compared to BRIC and other developed economies like US and JAPAN.
Contd. In order to emerge as a global hub, India would face competition from other low cost countries such as • China • Thailand • Brazil IMaCS has compared the cost competitiveness of India with respect to these countries in terms of factors like • Taxes and duties • Cost of manufacturing • Economies of scale
Obstacles to India for being Globally competitive Ever Increasing Population Widespread Corruption related to tax collection, exports, custom duties, government offices. Poor Basic infrastructure such as roads, water and electricity. Inaccessibility to internet, telephones, mobiles. Poverty and apathy towards education. Apathy towards R&D and non parallelism between industries and education undertaken.
Steps for Attaining Competitiveness Growing Trend of acquiring Foreign Companies. Competitiveness is mainly attained by India in sectors like: IT & ITES, Pharmaceuticals, Textile eg- SWITCH companies and Pharma gaints like Ranbaxy, Dr.Reddys, Piramal etc. Competitiveness is yet to be attained in major sectors like: Agriculture and Allied Business Industry, Manufacturing, Automotive, etc.
Solutions for becoming Globally Competitive As lndia integrates into the world economy, there is a need to reposition itself as a country. Branding of India has thus become the necessity. The casual approach needs to be shredded off and professionalism be developed. To achieve this objective, lndia needs to reengineer itself in the following areas:
Solutions Contd. Privatization of public enterprises; Incentives for quality; Innovation and productivity; Employment through growth; Globalization of domestic markets; Investment in quality and innovation;
Solutions Contd. Process reengineering; Reduction in unorganized sector. Up gradation of transport and logistics; Special economic zones and energy reliability. Strengthening rural sector growth Improving access to assets and sustainable natural resource use:- Balancing poverty reduction and conservation priorities