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The power of I (India) in BRICS
 

The power of I (India) in BRICS

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Presented by Dr. Amit Kapoor

Presented by Dr. Amit Kapoor

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  • 1. India’s contribution in world’s GDP (in 2010 and in 2030)2. It’s GDP increase over a period
  • Top 10 States that are major contributors in India’s GDPRegions/cities of these states that are among the top 15 GDP contributorsThe diagram on the second page of the report that details on our area of focus
  • Graph depicting population size and growth rateGraph with urban population and rural population (rural-urban divide)
  • Like the graph on slide 7, make one for towns, urban agglomerations, districts, villages over years
  • - With level of urbanization grows many other factors such as literacy rate, income level factories, transportation, etc.
  • City I, II, III and the % of urban population, with the number of units
  • -talk about competitiveness
  • Mumbai slum versus growth
  • Rise in diff. occupationWorking populationIncrease in opportunity
  • Urban Poverty: 25.7% of the total urban population still lives below the poverty line as defined officially by the Planning commission based on survey data from the NSSO

The power of I (India) in BRICS The power of I (India) in BRICS Presentation Transcript

  • INSTITUTE FOR COMPETITIVENESS -RESEARCH
  • Cloud Power Opportunit y BRICS India Threat
  • Cloud Power Opportunit y BRICS India Threat
  • Microeconomics of Competitiveness and Macroeconomics of Competitiveness MIcroeconomics of Competitiveness MAcroeconomics of Competitiveness Aggregate Individuals s
  • Natural Endowments Population and GDP’s of the world 12.6% of the Land area, 17% of the Population, 2.6% of the Russia GDP 7% of the Land area, 5% of the Population, 23% of the GDP USA China 2.3% of the Land area, 17.8% of the India 7.2 % of the Land area, Population, 2.6% of the 6.5% of the Land area, 19.2% of the Population, GDP 2.8% of the 10.4% of the GDP Population, 3.5% of the GDP 0.93% of the Land area, Brazil 0.72% of the Population, 0.58% of the GDP South Africa
  • GDP over the years 8000 Billions 7000 6000GDP at Current Prices 5000 4000 3000 2000 1000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Brazil China India Russian Federation South Africa
  • Area in 2011 Area in 2010, square Km 18 Millions 16.37687 16 14 12 10 9.32748 8.45942 8 6 4 2.97319 2 1.21447 0 Brazil China India Russian Federation South Africa
  • Population over the years 1.6 Billions 1.4 1.2 Population in Billions 1 0.8 0.6 0.4 0.2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 Brazil China India Russian Federation South Africa
  • Primary Secondary and Tertiary Sector 100.00 90.00 80.00 43.19 55.14 70.00 59.28 66.63 66.69 70.87 60.00 50.00 40.00 46.72 30.00 27.12 36.68 20.00 28.07 30.83 26.32 17.74 10.00 10.10 0.00 5.30 4.04 2.81 2.48 World Brazil China India Russian South Africa Federation Agriculture (Value Added % of GDP) Industry (Value Added % of GDP) Services (Value Added % of GDP)
  • Manufacturing Value Added as a percentage of GDP, 2010 South Africa 14.66Russian Federation 16.43 India 14.54 China 29.62 Brazil 16.23 World 16.71 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00
  • Structural transformation in the World Economy Structure of the World Economy in 1991 Structure of the World Economy in 2010 5% 3% 27% 34% 61% 70% Agriculture Industry Services Agriculture Industry Services Source: WDI and Institute for Competitiveness Analysis
  • Imports and Exports as a Percentage of world Imports and Exports 20.00 18.00 16.00 9.03 14.00 12.00 10.00 8.00 6.00 10.34 4.00 1.61 2.27 2.00 1.24 2.63 0.61 1.32 1.44 0.00 0.53 Brazil Russia India China South Africa Share in world total exports (2010) Share in world total imports (2010) Source: WTO and Institute for Competitiveness Analysis
  • Projections according to IMF Contribution to global growth (2006-20, %) 0 5 10 15 20 25 30 4.5 4.2 China 26.7Increase in a country‟s real GDP, at constant 2005 PPP US$ 4 3.8 United States 15.9 3.5 India 12.2 3.5 3.4 3.3 Brazil 2.4 3 Russia 2.3 Indonesia 2.3 2.5 South Korea 2.1 2 UK 1.9 Germany 1.9 1.5 France 1.5 1 Mexico 1.4 Canada 1.3 0.5 Turkey 1.3 0 Japan 1.1 1971-1980 1981-1990 1991-2000 2001-2005 2006-2020 Source: IMF and Economist Intelligence Unit for 1970-2005: Economist Intelligence Unit forecasts for 2006-20
  • GDP over the years 0.58 %100% in 201090% 2.65% in 201080%70% 2.64% in 201060%50%40% 10.43% in 201030%20% 3.53 %10% in 2010 0% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Brazil China India Russian Federation South Africa Source: WDI and Institute for Competitiveness Analysis
  • FDI Investments 200 Billions Foreign direct investment, net inflows (BoP, current US$) 150 100 50 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 -50 Brazil China India Russian Federation South Africa Source: WDI and Institute for Competitiveness Analysis
  • FDI Inflows and Outflows 5 7 4 6 3 5FDI inflows as a % of GDP FDI inflows as a % of GDP 2 4 1 3 0 2 -1 1 -2 -3 0 -4 -1 World Brazil World Brazil China India China India Russian Federation South Africa Russian Federation South Africa Source: WDI and Institute for Competitiveness Analysis
  • Confidence Index and sought out by many Investors(1) 1 China 1.93(3) 2 United States + 1.67(2) 3 India - 1.64(6) 4 Brazil + 1.53(10) 5 Germany + 1.43( ) 6 Poland + 1.35(11) 7 Australia + 1.33(19) 8 Mexico + 1.32(14) 9 Canada + 1.32(4) 10 United Kingdom - 1.32(8) United Arab - 11 1.29 Emirates(12) 12 Vietnam 1.29 + Moved Up(13) 13 France 1.29 Maintained(5) 14 Hong Kong - 1.28 - Moved Down(17) 15 Other Gulf Not among top + 1.26 20 in 2007 Index states Low Confidence High Confidence Values Calculated on a 0 to 3 Scale Source: A.T. Kearney 2010 Confidence Index, WDI and Institute for Competitiveness Analysis
  • Infrastructure development 90.0 84.5 Percentage of People with Access to Electricity 80.0 (2009) 70.0 66.4 South Africa 75 62.3 60.0Percentage of Paved Roads 55.1 50.0 45.5 India 66.3 40.0 30.0 China 99.4 20.0 Brazil 98.3 10.0 4.3 0.0 World 74.1 0.0 20.0 40.0 60.0 80.0 100.0 120.0 Source: WDI and Institute for Competitiveness Analysis
  • Total Reserves 3500 Total Reserves in Current Billion US Dollars Billions 3000 2500 2000 1500 1000 500 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Brazil China Brazil China India India Russian Federation Russian Federation South Africa Rest of the world South AfricaNote: Total reserves comprise holdings of monetary gold, special drawing rights, reserves of IMF members held by the IMF, and holdings offoreign exchange under the control of monetary authorities. The gold component of these reserves is valued at year-end (December 31) Londonprices. Figures taken are in current U.S. dollars. Source: IMF, WDI and Institute for Competitiveness Analysis
  • Literacy and Sanitation: Critical Areas 100 100.0 99.1 100 90 90.0Literacy rates as a percentage of total Population Access to Improved Sanitation Facilities as a 80 80.0 76.5 percentage of Population 70 70.0 60.0 58 60 54 50.0 50 40.0 40 30.0 30 20.0 20 10.0 10 0.0 0 European World China India United 1990 2000 2010 Union States World China India Note figures for chart 2 are for 2008. Source: WDI and Institute for Competitiveness Analysis
  • Geopolitical Hotspots China Kashmir Conflict Tibet Conflict Cross-strait India relations Offshore Oil reserves Source: Deutche, Institute for Competitiveness Analysis
  • Macroeconomic and Social Issues- China and India EU 27 30 China 41 India 36 • High Commodity prices/high dependence on Energy Imports USA 40 • Investor Sentiments • Protectionist Trends in 0 10 20 30 40 50 developed markets (and home) 80 75.62 • Huge Income disparities bear 70 the risk of social tensions 60 50 41.64 40 36.31 30 20 15.92 10 0 Poverty headcount below Poverty headcount below Ch…a day 1.25 $ 2 $ a day Source: Eurostat, Institute for Competitiveness Analysis
  • China and India : A List of superlatives India China• India is the largest • China is the largest consumer of Gold. consumer of Energy• India is the biggest and rare earth metals. producer of • China is the largest Tea, Coffee, Jute and exporter of the world Cotton. today.• India is the largest • China launched the producer of sponge Iron “world’s largest and expected to housing investment become the second program and Macau largest producer of has become the steel. world’s top gambling• India is the second destination. largest producer of • China is the largest wheat and largest food producer in the producer of pulses but world in 2010. needs to import pulses • Biggest consumer of due to growing grain, meat, coal and domestic demand. Institute for Competitiveness Analysis Sources : Various sources, steel.
  • Cost Advantage and Growth drivers of Indian IT IndustryCost Advantage to the India IT services ascompared to EU Growth Drivers of Indian IT Industry• The cost of an engineer in India is only • Increasing global spending on IT and about 20-40% in comparison to EU. Technology.• India’s offshore billing is at around 20-35$ • Global services providers expanded their per hour which is 50-70% lower than the base in India to provide onshore-offshore EU. services at a low cost. They have a huge• India has the largest number of quality Indian employees strength (Accenture- certifications in the field of IT today. 40000+, IBM-1,30,000, HP-• BPO sector employs around 768,000 15000+, CapGemini- 26000+) people at the end of 2010. • Emergence of the Global Delivery model by• Knowledge Services Exports or KPO the Indian IT firms and Indian companies (Next generation services in India) grew at have expanded globally through opening rate of 19.4% per annum and reach $ 1 offices and M&A. billion in 2010. • Dedicated software technology parks and• The contribution of India IT sector to GDP SEZs in India. grows from 1.2% in 1977-78 to 6.1% in • High connectivity by rail, road and air in 2009-10. major cities where IT companies have• India’s IT/ITeS exports has grown at a established. compounded annual growth rate of 23.1% • Government Policy supports to IT. between 2005-06 and 2009-10. The • Huge talent pool with more than .37 million software and IT services sector (excluding graduates and post graduates available to hardware) posted revenuesfor Competitiveness Analysis Sources : Various sources, Institute of 63.7 billion start career in IT. $.
  • Cost Advantage and Growth drivers of Indian IT IndustryFuture Opportunities State Number of SEZ Companies• India is expected to become the hub of engineering HP, Amazon, process outsourcing (EPO) and market size will touch 30 Verizon, Convergys, billion $ by 2015. Andhra Pradesh 59 EXL, TCS, Wipro,• Bechtel, General Motors, Ford, John Deere, Caterpillar, Infosys Silicon Automation Systems and John Brown Engineering are among the global leaders that have established their Cognizant, engineering services divisions in India. Convergys, EXL, Maharashtra 51• The KPO industry is now growing rapidly, with several KPIT, Msource, companies establishing third-party operations for Siemens, Accenture functions such as data analytics and data modeling. Infosys, Wipro, According to CRISIL, India’s KPO export market Tamil Nadu 38 Accenture, constitutes around 8 per cent of the country’s ITeS Cognizant revenues and employs nearly 3 per cent of its workforce. Infosys, TCS, Growth drivers include the high productivity of India’s Karnataka 37 Wipro, HP, human resources and outsourcing of knowledge SIEMENS, Compaq processes by SMEs. IBM, Genpact,• Outsourcing of legal and intellectual property research is Oracle, American presently at an early stage of development in the country. Delhi and NCR 28 Express, Convergys, However, this space holds tremendous growth potential. HP India offers impressive opportunities to scale up, with a IBM, Cognizant, large pool of legal professionals (with more than 1million West-Bengal 19 TCS, Infosys lawyers and 70,000 law graduates qualifying every year) and significant cost arbitrage. In addition, Indian lawyers Gujarat 15 TCS, Infosys, Wipro bill at one-tenth of their counterparts in the US (US$ 40 to US$ 60 per hour in India, compared with US$ 350 per hourSources US). in the : Various sources, Institute for Competitiveness Analysis
  • State of Education Enrollment in Higher Education to grow at Faculty in Millions in India 2008 5.6% CAGR 20.0 18.0 18.0 17.0 0.06 0.16 16.1 16.0 15.3 0.34 Veterinary Sciences 14.4 0.02 13.7 0.35 Agriculture 14.0 13.0 0.34 12.3 0.8 Education 11.6 12.0 11.0 4.98 Law 1.99 Medicine 10.0 2.26 Law 8.0 Engineering 6.0 Management Science 4.0 Arts 2.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2018Source: Marketing Whitebook 2011-12, Businessworld.
  • Degree graduates breakup and manpower requirements in India Other Business 0.5 Services BA Public Admin & 2.5 defence B.Sc Agriculture 32 B.Com Manufacturing 13 Open Universities Healthcare 1.53.40% 20.80% 26% Polytechnic Courses Transportation and0.30% 2 Medicine and Storage1.10% Pharma Hospitality 31.60% B.Ed 21.60%1.70% Communication 2 10.20% M.Sc2.10%4.80% M.Com Banking and Insurance 3 5.40% Ph.D and higher IT/BPO 3 MA Community Services 6 Others Wholesale and Retail 6 Construction 17 0 10 20 30 40 Manpower Intake from 2011-16 (Millions)Source: IGNOU and CII
  • Global Players Operation in India and IT service expors Global Players Revenues (In 2009-10) 30 HP $126 billion 25.8 25 IT Service Exports in US $ billion Oracle 27881.71 million Rs 20 17.5 16.67 15.95 Cognizant $4.6 billion 14.15 15.12 15 14 13.3 13.4 11.6 Accenture $21.6 billion 10.4 11.2 10 9.4 8.8 6 Dell $61.5 billion* 5 1.7 1.8 2.1 Lenovo $21594 million* 0 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 WNS $154.2 million* Project Oriented Outsourcing Support & Training * Revenues are for 2010-11Source: Company reports Institute for Competitiveness Analysis Figures for 2011-12 are projected
  • IT Enabled Service Sector : Exports Driven18 16.516 14.814 12.412 11.7 10.9310 8.4 Domestic Market 8 Exports 6.3 6 4.6 4 3.0 2.6 2.3 2 1.6 1.9 0.9 1.1 0.5 0 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Source: Company reports Institute for Competitiveness Analysis and NASSCOM Strategic Review 2010 The IT–BPO sector in India
  • IT Enabled Service Sector : Exports DrivenAt Present , Indias BPO industry is Manufacturing 45 Business Domains in which BPO service are offeredfacing a stiff competition fromcountries like Automobiles 45Mexico, Philippines, Malaysia, China, Infrastructure 45Canada and Ireland Attrition Rates have Increased to FMCG 45 55% from about 40% from December 2010-April 2011 IT Sectors 55 Reasons:1. Campus recruitments Retail 55 2. Ample employment Financial Services 60 opportunities 3. Part time Jobs Pharmaceuticals 60 0 20 40 60 80Source: Deccan Herald, Business Standard, Assocham Study on BPO and Institute for Competitiveness Analysis
  • Number of Engineering Education Institutions in India Employbility - Diploma Holders after Degree Completion 0.6 0.5 0.4 0.3 0.2 0.1 0 < 12 Months 12-20 Months > 21 Months Employbility - Engineering Graduates after Degree Completion 0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0Source: Handbook of skill scenario in India, 3rd global summit < 12 Months 12-20 Months >21 Months Source : ENGINEERING EDUCATION IN INDIA, 2007 IIT Bombay
  • IT companies in India 35,000.00 Rolta India 1.58 Ltd Tech 30,000.00 8.43 Mahindra Patni 3.69 25,000.00 Computers Operating Income Year on year Oracle Fin 15.04 20,000.00 Mphasis 7.39 15,000.00HCL Techno 26.44 Wipro 78.03 10,000.00 TCS 198.07 5,000.00 Infosys 128.31 0.00 0.00 50.00 100.00 150.00 200.00 250.00 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Thousands Infosys TCS Wipro Oracle Fin Tech Mahindra Market Cap in Rs Crore Institute for competitiveness Analysis
  • IT Offshoring Structure in India India Offshoring Industry Structure (2009) India Offshoring Industry Structure (2020) Automative Automative Telecom Telecom 3%1%2% Consumer Consumer 11% 16% 4% Electronics 17% Electronics 5% Semi-conductors Semi-conductors 1%8% Aerospace 3% Aerospace 4% 13% Construction Construction7% 32% 5% Computing Systems Computing Systems 5% 5% Infrastructure 11% Infrastructure 8% 19% Energy Energy 4% 8% 10% Medical Devices Medical Devices Industrial Automation Industrial Automation Source : NASSCOM
  • Labor Productivity in India Labor Productivity ( Services in US $) 4000 3500 3000 2500 2000 1500 1000 500 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Institute for competitiveness Analysis
  • ICT service exports, service exports Services exports in Gross US$ current terms ICT Services exports in Gross US$ current terms 34% 33% 45% 43% 7% 14% 15% 2% 4% 3%European Union China India United States Rest of the world European Union China India 60 ICT Exports as a percentage of Total service Exports 50 40 30 20 10 0 2005 2006 2007 2008 2009 European Union World China India United States Source: WDI and Institute for Competitiveness Analysis
  • High Technology and Low Technology futures The Competitive Economy Hi Tech Low Tech
  • Apple Economy Purchas Cost of Goods ed Inputs sold Direct Labor Value Gross SG&A Profit SG&A Sales Added (Value Price Capture R&D R&D d) Deprecia Depreciation tion Net Net Profit Profit G Gross Cost r o sRetail $30 Dist. s $45 Retail Margin Margin $ 224 Wholesaler Price to Apple USA Japan Kore TotalPrice$299 a m aWholesale $80 Apple Gross Distribution $75 $74 r $ 144 cost of all InputsPrice $299 margin g and Retail i n Apple $80 $80Cost of Gross margin for $ 83 cost of goods Cost of 444 $28Inputs 7 Key inputs $33 f for 7 Key Inputs still to be Seven $7 $26 $1 $34$144 o analyzed Identified $78 still to be r InputsCost of sales for Gross margin for $4 other cost analyzed cost11 key inputs 7 Key inputs $33 Portal player Chip for 6 Key 7 Portal Player $1 $1$102 Inputs suppliers K Source: Institute for Competitiveness Analysis e
  • Apple EconomyComponent Supplier Company Manufacturing Estimated Cost as % of Gross Profit Estimated HQ Location Location Factory Price all iPod Parts Rate Value CaptureHard Drive Toshiba Japan China $73.39 51% 26.5% $19.45Display Module Toshiba- Japan Japan $20.39 14% 28.7% $5.85 MatsushitaVideo/ Multimedia Broadcom US Taiwan/Singapo $8.36 6% 52.5% $4.39Processor rePortal Player CPU Portal US US or Taiwan $4.94 3% 44.8% $2.21 PlayerInsertion, test and Inventec Taiwan China $3.70 3% 3.0% $0.11assemblyBattery Pack Unknown $2.89 2% $0.00Display Driver Renesas Japan Japan $2.88 2% 24.0% $0.69Mobile SDRAM Samsung Korea Korea $2.37 2% 28.2% $0.67Memory- 32 MBBack Enclosure Unknown $2.30 2% 26.5%Mainboard PCB Unknown $1.90 1% 28.7%Subtotal of 10 most $123.12 85% $33.37expensive inputsAll other inputs $21.28 15%Total all iPod inputs $144.40 100% Source: IFC AnalysisSource: Case study on Apple ipod Ecosystem by University of Berkeley
  • Population : Complex Perspectives Total Urban Population 2010 Total Urban Population 2010 - 2050 300 6000 274 250 5000 4888 200 3958 Population in Millions 178 4000Population in Millions 150 136 3000 100 84 2000 62 58 1614 1354 1417 50 34 38 1215 32 27 1000 0 City City City City City population population population population population 0 (< .5 (.5-1 (1-5 (5-10 (> 10 PRC India Asia millions) millions) millions) millions) millions) 2010 China India Source: United Nations, World Urbanization Prospects, The 2009 Revision, Asia 2050, Asian Development Bank
  • Urban Perspectives 182 80% Central asia 74% 96 70% 67% 64% 65% 520 South east asia 252 60% 55% 52% 50% % Urban Population 50% 1261 42% South Asia 41% 496 40% 30% 1284 30% Northeast Asia 805 20% 3247total urban population (mn) 10% 1649 0% 0 500 1000 1500 2000 2500 3000 3500 2050 2010 Source: US. Bureau of Labor Statistics, Boston Consulting group , IFC Analysis
  • Demographic Shifts for India 1400 1400 1200 1200 1000 1000Population in Millions Population in Millions 800 800 600 600 400 400 200 200 0 0 0-14 15-24 25-49 50-59 60+ Years All ages 0-14 15-24 25-49 50-59 60+ All ages Years Years Years Years Years Years Years Years Years Year 2000 Year 2000 Year 2020 Year 2020
  • Health Expenditure Per Capita in Current US $ 1000 3000 4000 5000 6000 7000 8000 9000 2000 0 India 1995 1996 1997 European Union 1998 1999 2000 2001 World 2002 2003 United States 2004 2005 2006 2007Source: WDI and Institute for Competitiveness Analysis 2008 China 2009 Health Expenditure and Life Expectancy 2010 Life Expectancy at Birth In number of Years 10 20 30 40 50 60 70 80 90 0 1990 India 1991 1992 1993 1994 European Union 1995 1996 1997 1998 World 1999 2000 United States 2001 2002 2003 2004 2005 China 2006 2007 2008 2009 2009
  • Trade in the World Economy 80 India - EU trade Billions Transactions in Billions of Euros 70.0 70Trade to GDP ratio (2007- 58.7 60.0 51.4 60 47.5 50 50.0 40.0 40 09) 28.9 27.6 30 30.0 24.8 20 20.0 10 10.0 0 0.0 2005 2006 2007 2008 2009 2010 EU 27 Brazil China Russian India USA Federation EU imports from India EU exports to India EU trade with India 14 000 12 849 Trade in the worldTrade Per capita (US$, 2007- 12 000 10 016 10 000 8 000 5 064 16% 6 000 4 000 09) 1 969 1 921 2 000 522 0 13% 55% 2% 14% Source: WDI, WTO and Institute for Competitiveness Analysis European Union China India
  • Trade in the World Economy 10000 9000 8697 8275 8000 7000 World 3.0 6000 5000 4000 World 1.0 World 2.0 3000 Yes Yes 2000 1413 1457 1220 1168 964 944 World 0.0 1000 Market Market 255 155 Regulation Integration 0 No No European China India United World Union States Imports (Billions of Euro) Exports (Billions of Euro) Source: World 3.0, fig 1.2, pp. 18, by Pankaj Ghemawat Source: WDI, WTO and IFC analysis
  • Barriers to Entry or Areas of ProgressSource: Photo 1. Great Wall of China, accessed from www.crestock.com Photo 2. Researchers/ People carrying nose cone of a rocket to Thumba, www. Skyscrapercity.com
  • Trade Projections by WTO And ADB Sectoral Distribution of FDI Projects, 2009-10 According to a press release of WTO on 600 7 April 2011 following the 554 14.5% surge in the volume of exports in 2010 world trade growth should settle to a more modest 6.5% 500 expansion in 2011. 449 392 400 Trade openness of the region, measured by the 361 trade-to-GDP ratio, is projected to increase for 338 Asian Developing regions sharply from 39.4% in 2010 to 74.4% in 2030 . Among the 12 300 2009 economies, Hong Kong, China Malaysia Singapore 254 2010 and the Philippines are notable for maintaining very high trade/GDP ratios for a long period of time 200 (Krugman 1995). By the end of the projection period, Thailand and Viet Nam too are likely to join this group of “super trading economies”. 100 People’s republic of China’s trade/ GDP ratio is projected to grow from 41.7% in 2010 to 81.9% in 2030. 0 Primary Manufacturing Services Source: Asian Trade Flows: Trends, Patterns, and Projections Prema-chandra Athukorala No. 241 | January 2011
  • Competitiveness and World Economy Context for Firm Strategy and Rivalry • Local rules and incentives that encourage investment and productivity e.g. - salaries, Factor - incentives for capital investments, Demand Conditions - intellectual property protection Conditions • Vigorous local competition i.e., - Openness to foreign and local competition; Access to high quality business inputs - Sophistication of company operations Sophisticated and demanding local i.e., customers and needs e.g., - Natural endowments, - Strict quality, safety, and environmental - Human resources, standards - Capital availability, – Consumer protection laws - Physical infrastructure, Related and – Government procurement of - Administrative infrastructure, Supporting advanced technology - Information infrastructure, Industries – Early demand for products and - Scientific and technological infrastructure Services. Local availability of suppliers and supporting industries Presence of clusters instead of isolated firms • Many things matter for competitiveness • Successful economic development is a process of improving the business environment to enable increasingly sophisticated ways of competing Source: The Competitive Advantage of Nations, Michael. E. Porter
  • Stages of the Economy – Indian Context Factor-driven economies: Factor-driven economies focus on low-cost basic factor conditions, such as low-skilled Stage 1 labour, natural resources and geographic location. Factor- driven economies need to focus on input costs, macro, political and legal stability, efficient basic infrastructure and lowering the regulatory cost of doing business. Investment-driven economies: Investment-driven economies would have the ability to produce standard products and services of high quality using efficient methods but at lower Stage 2 wages than advanced economies. Investment-driven economies need to focus on building efficiencies, enhancing local competition, market openness, incentives and rules for encouraging productivity. Innovation-driven economies: Innovation driven economies would focus on innovative products and services at the global Stage 3 technology frontier. Innovation driven economies would need to focus on advanced skills, advanced infrastructure, incentives and rules encouraging innovation.
  • Competitiveness and World Economy Regional Local / State National Global (e.g., Scandinavia, Western Europe) • Separate local value chains • Integrated global value chain Firm Infrastructure (e.g. Financing, Planning, Investor Relations) Human Resource Management (e.g. Recruiting, Training, Compensation System) Support Activities Technology Development (e.g. Product Design, Testing, Process Design, Material Research, Market Research) M Procurement Value a (e.g. Components, Machinery, Advertising, Services) ` r What Inbound g buyers are Outbound Marketing After-Sales Logistics Operations i willing to Logistics & Sales Service (e.g. n pay (e.g. Incoming (e.g. Order (e.g. Sales (e.g. Assembly, Com Material Processing, Wa Force, Promotion, Installation, Cus ponent Storage, Data rehousing, Rep tomer Fabrication, Br Collection, Ser ort Preparation) Advertising, Prop Support, Compl anch vice, Custome osal Writing, Web aint Operations) r Access) site) Resolution, Re pair) Primary Activities• Geographic scope of competition is determined by the ability to leverage activities in the value chain across borders Industries differ greatly in the scope of competition Source: The Competitive Advantage of Nations, Michael. E. Porter
  • Country Equivalents Source: Economist Intelligence Unit, National Statistics
  • Country Equivalents Source: Economist Intelligence Unit, National Statistics
  • Country Equivalents - Brazil Source: Economist Intelligence Unit, National Statistics
  • Consumption in India : Fuelled by new models 2010 2020 United States 169 GDP 850 billion Pounds GDP 1920 billion Pounds ATM Machines per 100,000 adults in 2009 Private Consumption 490 Billion Private Consumption 490 Billion Pounds Pounds India 4 Non Retail 590 Retail 270 Non Retail 225 Retail 270 Billion Pounds Billion Pounds Billion Pounds Billion Pounds (50-55%) (55%) (45%) (55%) World 32 Urban 120 Rural 150 Billion Urban 280 Rural 245 Billion Pounds Pounds Billion Pounds Billion Pounds (45%) (55%) (50-55%) (45- 50%) Organized Retail 13 Billion Pounds Organized Retail 125 Billion Pounds European Union 77 (5%) 24% Source: WDI, Marketing Whitebook 2011, Businessworld and Institute for Competitiveness 0 50 100 150 200
  • Shifts in the Consumer Market in India Household Income Growth to Accelerate India will see a reduction of poverty and Across India growth of It‟s Middle Class The Shape of India‟s Income Pyramid will Change dramatically as Income‟s grow India‟s Aggregate consumption will Quadruple over the next 20 yearsSource: Bird of Gold: The rise of India’s Consumer Market, McKinsey Global Institute
  • Shifts in the Consumer Market in India Services growth has been broad based Food will remain the largest Consumption Category while communications will grow the fastestSource: Bird of Gold: The rise of India’s Consumer Market, McKinsey Global Institute
  • Emerging Economies: Opportunity Areas Description Impact Geography Type of investment Irrigation Raises productivity in certain regions Regional, global Technology, manufacturing Fertilizer Raises productivity in certain regions Regional, global Technology, manufacturing Machinery Enables more efficient farming Local Engineering, manufacturing Commercialization Raises productivity in certain regions Global Logistics, manufacturing Major challenge to agricultural expansion, Infrastructure Global Governments, engineering especially in emerging economies Land expansion Increases acreage for production Global Private lands, public lands Crop protection, drought resistance, disease Biotech crops Choice by region Biotech, agronomic resistance, lower water and fertilizer input Source: World Bank Report on Sustainable futures
  • Chinese Productivity 45 30 40 Fully loaded factory-worker wages ($/hour) 26.1Chinese productivity relative to US (%) Productivity 40 25 35 22.3 30 29 18.8 Ratio of 20 average 16.6 25 Chinese to average 15 17 % 20 U.S. wage 20 9% rates 15 13 10 4% 3% 10 4.5 5 5 2 0.5 0.8 0 0 2000 2005 2010 2015 2000 2005 2010 2015 E US China Source: Why manufacturing will return to America, Economist Intelligence Unit, US. Bureau of Labor Statistics, Boston Consulting group , Institute for Competitiveness Analysis
  • 10000 20000 30000 40000 60000 70000 80000 90000 50000 0 2000 2001 2002 2003 2004 2005 GDP Projections China 2006 2007 2008 2009 2010 India 2011 2012 2013 2014 2015 2016 France 2017Source: Dreaming with the BRICS, Goldman Sachs. 2018 2019 2020 2021 2022 Germany 2023 2024 2025 2026 Italy 2027 2028 2029 2030 UK 2031 2032 2033 2034 US 2035 2036 2037 2038 2039 2040 BRICs 2041 2042 2043 2044 G6 2045 2046 2047 2048 2049 2050
  • Projections according to IMF Contribution to global growth (2006-20, %) 0 5 10 15 20 25 30 4.5 4.2 China 26.7Increase in a country‟s real GDP, at constant 2005 PPP US$ 4 3.8 United States 15.9 3.5 India 12.2 3.5 3.4 3.3 Brazil 2.4 3 Russia 2.3 Indonesia 2.3 2.5 South Korea 2.1 2 UK 1.9 Germany 1.9 1.5 France 1.5 1 Mexico 1.4 Canada 1.3 0.5 Turkey 1.3 0 Japan 1.1 1971-1980 1981-1990 1991-2000 2001-2005 2006-2020 Source: IMF and Economist Intelligence Unit for 1970-2005: Economist Intelligence Unit forecasts for 2006-20
  • China, India, EU and USA : A comparative Analysis Brazil Russia India China Population Population Basic Facts and Population of about Population of about Approximately 1.2 Approximately 1.3 figures 19 Million 14 Million billion billion Moderate per Moderate per Large GDP as an capita income capita Income Large service Uniqueness about aggregate but Low levels but inflation levels Growth sector given the the Economy per capita Income has been a dependent on Level of Income levels consistent problem commodities Urban Economic Infrastructure, Economic slowdown, governance Carbon Intensity, Challenges being slowdown, Growth corruption and challenges, Middle Income faced momentum, overt dependence Management of transition inflation on commodity Inbound Capital exports flows Targeting Inflation Opportunities in Domestic demand+ Domestic demand+ and other emerging markets+ Growth strategies external FDI FII external FDI FII Emerging markets Commodity exports flows flows in long term to EUSource: Institute for Competitiveness Analysis
  • Asian century scenario versus middle income trap scenario 120000United 21% 98600 98600 GDP per capita in $ at PPPStates 14% 100000 6% 80000 India 14% 60000 47800 11% 38600 41700 PRC 22% 40000 36600 25900 23700 17800 20000 20300 32% Asia 51% 0 0% 10% 20% 30% 40% 50% 60% Asia PRC India United World States Share in World GDP at MER 350 292 300 250 GDP (trillions $ MER) 191 200 Asian Century 148 150 Middle 100 Income Trap 61 63 40 40 40 50 21 12 0 Asia PRC India United States World Source: Report by ADB 2050
  • Asian century or Middle Income Trap Asian Century Scenario Middle Income Trap Scenario 1% 2% 5% 3% 19% 27% 10% 33% 52% 9% 15% 24% Middle East and North Africa Rest of the World Middle East and North Africa Rest of the World Asia North America Asia North America Latin America & Carribian Sub Saharan Africa Latin America & Carribian Sub Saharan Africa Source: Report by ADB 2050
  • Income Levels in 2050 6 China 5 India Russia MalasiaGrowth rates (2010-50), CAGR 4 Indonesia Turkey Thailand Colombia Poland Iran Mexico 3 Egypt Brazil S.Korea Argentina Soudi Arabia South Africa Venezuela Spain Germany Hong KongSwitzerland 2 Italy Australia Canada UK Netherland France Japan US 1 0 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 Income per capita in constant 2000 USD Source: Report by ADB 2050, Institute for competitiveness Analysis
  • Population Levels and Growth 2000 India China 1500Population in Milions in 2050 1000 US 500 Indonesia Brazil Japan Mexico UK Germany Egypt Turkey Russia France CanadaItaly Spain S.Korea Iran Argentina Colombia Thailand Australia Soudi Arabia South Africa Malasia Netherland Venezuela Poland switzerland Hong Kong 0 0 1 2 3 4 5 6 -500 Income per capita growth rates 2010-2050 Source: Report by ADB 2050, Institute for competitiveness Analysis
  • Structural shift in Indian Economy (1994-2000) Services 10 8 6% Change in the Contribution to GDP (1994-2000) Community and Personal Services 4 Finance, Business & Real Estate Services Transport, Storage & Communication Construction 2 Industry 0 Manufacturing -10 0 10 20 30 40 50 60 -2 Agriculture and Allied -4 -6 -8 -10 Percentage Contribution in GDP (2000) Institute for competitiveness Analysis
  • Structural shift in Indian Economy (2000-2010) 15 Services(% change in contribution 2000-2010) 10 Industry Transport, Storage & Communication Finance, Business & Real Estate Services Construction 5 Manufacturing Electricity, Gas and Water Supply Community and Personal Services 0 -10 0 10 20 30 40 50 60 70 Agriculture and Allied -5 -10 -15 Percenatge Contribution in GDP (2010) Institute for competitiveness Analysis
  • Debt to GDP ratio Debt to GDP Ratio of Indian States West Bengal 42.8 41.1 Prescribed limit according to Uttar Pradesh 43.5 42.2 the growth and stability Pact of Tamil Nadu 25.5 EU 80.6 Rajasthan 41.1 35.2 Orissa 30.6 59.4 Mizoram 109.1 37.3 Manipur 77.4 25.1 Madhya Pradesh 34.4 34.3 Karnataka 24.3 33.6Jammu & Kashmir 70.1 55.7 Haryana 19 32.1 Goa 35.5 13.8 Prescribed limit Chattisgarh 15.2 according to WTO for 39.7 28 developing economies Assam 115.9 Andhra 30.1 0 20 40 60 80 100 120Source: State Profiling 2010, Institute for Competitiveness Analysis
  • Credit Ratings for Indian States Arunachal 51.08 Mizoram 52.87 West Bengal 54.93 Tripura 55.48 Rajasthan 55.85 S&P India Rating: BBB - from 2007-10 Sikkim 56.07 Moodys India Rating: BAA3 from 2004-10 Manipur 57.21 Assam 57.59 J&K 58.36 Meghalaya 59.45 Himachal 59.53 Andhra 59.8 Jharkhand 60.3 Credit Score Rating Index Kerala 60.43 Uttaranchal 60.44 Credit Score Rating Investment Perspective Punjab 61.21 90 + A+ Very Attractive Uttar Pradesh 61.57 81-90 A Attractive Tamil Nadu 62 Karnataka 62.36 71-80 B+ Sensible Bihar 62.57 61-70 B Modest Maharashtra 63.06 51-60 C+ Vigilant Goa 63.26Madhya Pradesh 63.42 41-50 C Risky Gujarat 64.87 < 40 D Not to be invested Haryana 65.36 Orissa 65.36 Chhattisgarh 72.37 Delhi 80.56 0 20 40 60 80 100Source: Institute for Competitiveness Analysis
  • Constraints being faced by Indian StatesConstraints being faced by IndiaGovernanceLow literacy ratesUniversity systemInflationFiscal PolicyFinancial Markets :In transitionTrade: Intraregional tradeAgricultural ProductivityEnvironmental Quality
  • Some Plausible SolutionsSolutions to the constraintsImprove Governance ( Focus on PPPs, Greater Information sharing, and Decentralization as a model)Raise Basic Educational Achievement (Implementation and policy making need to go hand in hand)Increase Quality and Quantity of Universities (More needs to be done for the larger number of people in the age bracket 16-25 years)Control Inflation: Why not monitor inflation periodicallyIntroduce a Credible Fiscal Policy (Having a medium term action plan will help to stimulate growth)Liberalizing Financial Markets to a greater extent will benefit India greatlyPercentage of Intraregional trade to Interregional trade needs to grow to increase benefits from tradeUsing modern tools and techniques (think tractors, drip irrigation) will greatly improve Agricultural ProductivityImprove Environmental Quality (Afforestation schemes and sustainable development hold the future for a green and aprosperous India)
  • India City Competitiveness
  • INDIA IS THRIVING – NOW AND WILL IN FUTURE % contribution in World‟s GDP 12 2010 European Others Union 30% 9.82 26% 10 9.32 9.10 8.81 8.37 9.27 United GDP growth (annual %) India Japan China States 8 9% 7.80 3% 9% 23% 8.28 6 5.22 5.30 2030 Projection 4 4.93 European 4.03 Others Union 3.77 35% 18% United States 2 16% India China 4% Japan 9% 18% 0 *value for 2012 and 2011 is for Q1 Source:- World Bank and Institute for Competitiveness AnalysisInstitute for Competitiveness, India
  • MAIN CONTRIBUTORS IN INDIA‟S GROWTH Mumbai, Pune 800,000 2010-11 nominal GDP (in crores of rupees) 700,000 Lucknow, Kanpur 600,000 Chennai Hyderaba Ahmedabad, Sur 500,000 d Kolkat 400,000 Bengaluru Thiruvananthapura 300,000 Jaipur 200,000 100,000 0 Source:- RBI and Institute for Competitiveness AnalysisInstitute for Competitiveness, India
  • TREND IN POPULATION SIZE AND GROWTH RATE (1901-2011) 1800 30 1650.62 1600 24.8 24.66 1494.63 25 23.85 1400 21.51 1338.64 21.34 Decadal Growth Rate (in %) 1210.19 20 Population (in millions) 1200 1028.74 17.64 14.22 15 1000 13.31 846.42 11 800 10 683.33 600 5.75 548.16 439.23 5 400 361.09 318.66 0.1 278.98 238.4 252.09 251.32 0 200 -0.03 0 -5 1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011 2021 2031 2041 Population (in millions) Decadal Growth rate (in %) Source:- Government of India Census and Institute for Competitiveness AnalysisInstitute for Competitiveness, India
  • THE RURAL-URBAN DIVIDE 100% 90% 80% 70% 71.5 68.8 76.7 74.3 60% 82.7 82.1 80.1 89.2 89.7 88.9 88 86.2 50% 40% 30% 20% 28.5 31.2 25.7 28.5 31.2 23.3 23.3 25.7 10% 17.9 17.9 19.9 19.9 13.8 17.3 17.3 10.8 10.8 10.3 10.3 11.1 11.1 12 12 13.8 0% 1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011 Rural Urban Source:- Government of India Census and Institute for Competitiveness AnalysisInstitute for Competitiveness, India
  • INCREASE IN NUMBER OF TOWNS, UAS AND VILLAGES (1971-2011) Towns (in Numbers) Urban Agglomerations (in Numbers) 8000 7935 400 381 382 384 6000 300 276 4689 5161 231 4029 4000 2921 200 2000 100 0 0 1971 1971 1981 1981 1991 1991 2001 2011 2001 2011 Villages (in Numbers) 620000 Number of Villages 608789 600000 593732 580000 579688 556561 556014 560000 540000 520000 1971 1981 1991 2001 2011 Source:- Government of India Census and Institute for Competitiveness AnalysisInstitute for Competitiveness, India
  • URBANISATION: SIGN OF A DEVELOPING EOCONOMY 90 80 70 74 64.8 60 52.21 50 43.57 40 34.45 30 28.3 18.33 20 10 0 1951 1961 1971 1981 1991 2001 2011 Degree of Urbanization Literacy Rates (%) Registered Motor Vehicles (No.) Mobile Cellular Subscription (per 100 people) Source:- Government of India Census, World Bank, Road Transport Year Book& Figure and Institute for Competitiveness AnalysisInstitute for Competitiveness, India
  • INDIAN STATES WITH HIGH GROWTH HAVE HIGH URBANIZATIONRATE 120.00 Delhi 100.00 80.00 Goa Maharashtra Tamil Nadu Urbanization level 60.00 Kerala Mizoram Gujarat Karnataka Punjab Andhra Pradesh Haryana West Bengal 40.00 Uttarakhand Madhya Pradesh Uttar Pradesh Rajasthan Manipur Kashmir Jammu & Jharkhand Nagaland Chhattisgarh Tripura Sikkim Arunachal Pradesh Orissa Meghalaya Assam Bihar 20.00 Himachal Pradesh 0.00-200000 0 200000 400000 600000 800000 1000000 1200000 -20.00 GDP (Dec-11)Institute for Competitiveness, India
  • DISRIBUTION OF TOWNS BY SIZE CLASS Cities Classificati Population 1951 1961 1971 1981 1991 2001 2011 on Class I > 1,00,000 76 102 148 218 300 393 50,000- Class II 91 129 173 270 345 401 1,00,000 Class III 20,000-50,000 327 437 558 743 947 1151 Class IV 10,000-20,000 608 719 827 1059 1167 1344 Class V 5,000-10,000 1124 711 623 758 740 888 Class VI < 5,000 567 172 147 253 197 191 Greater Mumbai UA Class I UAs/Towns 468 (12.05%) Million plus UAs/Towns 53 Delhi UA Mega Cities 3 (26.69%) Kolkata UA (6.87%) Source:- Government of India Census and Institute for Competitiveness AnalysisInstitute for Competitiveness, India
  • SNAPSHOT OF URBAN INDIA IN 2011 Cities Size Class By Population 10 - 30 million 5 - 10 million 1 - 5 million 0.1 – 1 million Source:- India Urban Conference 2011: Evidence & Experience - IIHSInstitute for Competitiveness, India
  • ENHANCING THE PROSPERITY OF URBAN INDIA viaCOMPETITIVENESS  Competitiveness is the productivity with which a region utilizes its human, capital, and natural resources  Productivity determines wages and the standard of living – Productivity growth determines sustainable economic growth  It is not what industries a nation competes in that matters for prosperity, but how productively it competes in those industries  Productivity in an economy depends on a combination of domestic and foreign firms  Innovation in products and processes is necessary to drive productivity growth  Only productive businesses can create wealth and jobs States compete to offer the most productive environment for business  The public and private sectors play different but interrelated roles in creating a productive economy Leading to the prosperity of the regionInstitute for Competitiveness, India
  • INFLUENCES ON COMPETITIVENESS Multiple Geographic Levels WORLD ECONOMY BROAD ECONOMIC AREAS GROUP OF NEIGHBOURING NATIONS NATIONS STATES, PROVINCES METROPOLITAN AREAS, RURAL AREAS [Our Focus] Source:- Institute for Strategy and CompetitivenessInstitute for Competitiveness, India
  • DRIVER OF COMPETITIVENESS Quality of overall Concentration of Policy Coordination among Multiple Levels business environment resources and urban of growth Geography/GovernmentInstitute for Competitiveness, India
  • MEASURING COMPETITIVENESS: THE FRAMEWORK Context for Firm Strategy and Rivalry • Local rules and incentives that encourage investment and productivity . - E.g. performance based salaries, incentives for capital investments, intellectual property protection Factor Demand • Vigorous local competition i.e., Conditions - Openness to foreign and local Conditions competition - Sophistication of company operations Access to high quality business inputs i.e., Sophisticated and demanding local - Natural endowments customers and needs e.g., - Human resources - Strict quality, safety, and environmental - Capital availability standards - Physical infrastructure – Consumer protection laws - Administrative infrastructure – Government procurement of - Information infrastructure Related and advanced technology - Scientific and technological infrastructure Supporting – Early demand for products and Services. Industries • Local availability of suppliers and supporting industries • Presence of clusters instead of isolated firmsInstitute for Competitiveness, India
  • HIERARCHY OF CITY COMPETITIVENESS INDEX Overall Competitiveness Factor Demand Context for Related & Conditions Conditions Strategy & Supporting Rivalry Industry 1. Financial 1. Demographics 1. Competition 1. Supplier 2. Physical 2. Income Distribution Intensity & Sophistication 3. Communication and Spending Diversity 2. Institutional 4. Administrative Pattern of Firms Support 5. Human 2. Business Capacity Incentives 6. Innovation Nearly 200 IndicatorsInstitute for Competitiveness, India
  • CITIES THAT WE STUDY Srinagar Jammu Shimla Amritsar Ludhian Dehradun a Chandigarh Faridabad Delhi Meerut Gurgaon Noida Agra Jaipur Kanpur Luckno Guwahat w Allahabad Patna i Varanasi Asansol Jabalpur Dhanba Bhopal Ranchi Kolkata d Ahmedabad Indore Jamshedpu Vadodar Raipur r Rajkot aSurat Nagpur Bhubaneswar Nashik Mumbai Pune Vishakhapatna Hyderabad m Vijayawada Bengalu Mysore ru Chennai Coimbatore Puducherry Kozhiko de Madurai Kochi Thiruvananthapur amInstitute for Competitiveness, India
  • EVERY CITY HAS A DIFFERENT STORY Crucial to understand each city as what is right for one city will not necessarily be right for another. “Mega Cities” “Million plus Cities” Indicators DELHI KOLKATA JAMSHEDPUR KOCHI Population 16753235 4486679 2291032 3279860 No. of Branches of Commercial 2177 1121 179 634 Banks Literacy Rate: Female 80.93 84.98 67.33 94.27 No. of GSM users (per lakh) 265 145 11 19 Molestation Incidence 550 226 6 67 Ownership of consumer durable- 23 25 19 31 Home Theater Share of total passenger traffic 21.8 15.1 0.7 1.1 (airways) Consumer Price Index for 169 178 103* 158 Industrial Workers Starting a business cost (% per 51.1 39.6 51.5 47.2 capita income)Institute for Competitiveness, India
  • LOOK AT THE ENTIRE PICTURE For instance, Mumbai Weak Areas Strong Areas 20925 Paying Taxes (Time) 271 Population density Total-corruption cases registered 1228 Work Force Participation Rate (per 434 1000) Number of accidental deaths 9093 Literacy rate: Males 94.28 Number of slums 61300 Media Reach-Press 98.8Institute for Competitiveness, India
  • A GLIMPSE: CITY COMPETITIVENESS RANK First 25 Cities Overall Competitiveness Context for Firm Related & Supporting Rank City Factor Conditions Demand Conditions Score Strategy & Rivalry Industries 1 Delhi 69.732 1 1 1 10 2 Mumbai 67.856 2 2 2 4 3 Chennai 62.323 4 5 5 2 4 Hyderabad 61.782 3 12 7 1 5 Kolkata 61.464 6 11 6 3 6 Gurgaon 61.167 7 7 4 23 7 Bengaluru 61.100 5 3 8 18 8 Noida 60.406 9 38 3 5 9 Pune 59.854 8 4 9 8 10 Ahmedabad 58.036 15 8 15 7 11 Nagpur 56.942 17 15 12 14 12 Chandigarh 56.842 10 17 25 15 13 Jaipur 56.263 18 6 19 26 14 Coimbatore 55.955 29 45 10 6 15 Kochi 55.884 28 23 14 11 16 Surat 55.726 26 10 17 20 17 Nashik 55.651 33 9 21 9 18 Indore 55.637 11 35 22 37 19 Thiruvananthapuram 55.434 22 18 18 28 20 Kozhikode 55.212 35 19 11 32 21 Mysore 55.118 12 39 30 33 22 Bhubaneswar 54.642 13 42 27 43 23 Vadodara 54.627 32 25 16 25 24 Rajkot 54.607 36 14 20 27 25 Lucknow 54.584 23 16 39 22Institute for Competitiveness, India
  • A GLIMPSE: CITY COMPETITIVENESS RANK Next set of 25 Cities Overall Competitiveness Context for Firm Strategy Related & Supporting Rank City Factor Conditions Demand Conditions Score & Rivalry Industries 26 Madurai 54.570 38 36 13 24 27 Bhopal 54.322 16 40 28 40 28 Kanpur 54.318 19 49 38 12 29 Faridabad 54.097 20 32 36 34 30 Ludhiana 54.022 27 28 23 42 31 Vijayawada 53.964 30 20 32 30 32 Guwahati 53.961 14 46 31 46 33 Raipur 53.849 25 31 26 38 34 Vishakhapatnam 53.741 34 22 33 31 35 Patna 53.580 37 21 42 21 36 Jabalpur 53.249 24 50 34 35 37 Agra 53.157 39 29 46 16 38 Varanasi 53.039 45 41 37 13 39 Meerut 52.975 43 34 40 17 40 Puducherry 52.905 42 27 29 39 41 Asansol 52.813 47 13 35 36 42 Dehradun 52.725 31 30 47 41 43 Ranchi 52.575 40 33 41 29 44 Allahabad 52.573 46 26 48 19 45 Shimla 52.295 21 43 43 49 46 Amritsar 52.181 41 24 24 47 47 Jammu 50.621 44 47 49 48 48 Jamshedpur 50.475 49 44 44 44 49 Dhanbad 49.829 50 48 45 45 50 Srinagar 49.732 48 37 50 50Institute for Competitiveness, India
  • TOTAL POPULATION VERSUS COMPETITIVENESS 18000000 Del 16000000 14000000 Mum 12000000 y = 49162x - 2E+07Total Populaiton R² = 0.456 10000000 Pun Ben 8000000 Asa Jai Ahm Sur 6000000 All Pat Nas Kan Vij Luc Agr Vis Vad Kol Che Rai Nag Var Raj 4000000 Mee Lud ThiCoi Koc Ind MadKoz Mys Hyd Dha Ran Jab Bho Jam Amr 2000000 Far Bhu Sri Deh Cha Noi Gur Jam Pud Guw Shi 0 48.00 53.00 58.00 63.00 68.00 Microeconomic Competitiveness Score Institute for Competitiveness, India
  • TEACHERS IN GOVERNMENT SCHOOL VERSUS COMPETITIVENESS 9000 All Vis 8000 Pun Agr 7000 Nas KolTeachers in Government School Guw Kan 6000 Pat Del Var Luc Jai Vij 5000 Mee Jab Vad Ind 4000 Lud Coi Cha y = -26.06x + 5060. Ran Shi R² = 0.001 Dha Amr Nag 3000 Jam Bho Mys Mad Thi Hyd Bhu 2000 Noi Deh Mum Jam Ahm Far Sur Koz Koc Gur Che Asa Ben 1000 Sri Pud Raj 0 48.00 53.00 58.00 63.00 68.00 Microeconomic Competitiveness Score Institute for Competitiveness, India
  • FEMALE LITERACY RATE VERSUS COMPETITIVENESS 100 95 Koc Koz Thi y = 1.001x + 20.11 90 R² = 0.232 Che Mum Kol Guw Ben 85 NagFemale Literacy Rate Sur Cha Bhu Pun Del Coi Ahm 80 Pud Lud Deh Kan Mad Bho Gur Jab Raj Ind Hyd Jam Shi Vad Far Luc 75 Amr Nas Noi Vij Asa 70 Var Jam Ran Mys Mee Rai Jai 65 Dha Pat Sri All Vis Agr 60 55 48.00 53.00 58.00 63.00 68.00 Microeconomic Competitiveness ScoreInstitute for Competitiveness, India
  • EDUCATION DEVELOPMENT INDEX VERSUS COMPETITIVENESS 0.8 Koz Koc Thi Mad Coi Che y = 0.010x + 0.020 0.75 Lud Cha R² = 0.159 Amr Del 0.7 Far Gur Education Development Index Vis Vad Sur Vij Raj Mys Pun Mum Nas NagAhm Ben 0.65 Pud Hyd Shi 0.6 Deh Jai 0.55 Agr Var Kan Mee Luc Sri All Noi Rai Kol Jam Asa Jab Bho Ind 0.5 Bhu 0.45 Dha Jam Ran Guw Pat 0.4 48.00 53.00 58.00 63.00 68.00 Microeconomic Competitiveness ScoreInstitute for Competitiveness, India
  • CHEATING INCIDENCE VERSUS COMPETITIVENESS 1420 y = 105.8x - 5342. R² = 0.283 Kol 1220 Bhu 1020 Cheating Incidence 820 Luc Thi Pun 620 Che Kan Lud 420 Vij Vis Koz Koc Agr Amr Mee Gur Var Rai Nag Ahm 220 Deh PatBho Guw Coi Cha Ind Ran FarMad Sur Vad Nas All Jab Sri Jam Jam Asa Raj Dha Pud Noi 20 Shi 48.00 53.00 58.00 63.00 68.00 Microeconomic Competitiveness ScoreInstitute for Competitiveness, India
  • DECADAL GROWTH RATE VERSUS COMPETITIVENESS 60 Noi 50 Ben Sur % decadal growth rate (2001-11) 40 Rai Ind Deh Far Bho Pun 30 Jai Luc y = 0.392x - 1.341 Pud R² = 0.014 Sri Ran Agr Pat Ahm Del All Raj Nas Mad Coi 20 Var Cha Mee Bhu LudGuw Jam Amr Jab Vad Mys Vis Nag Dha Asa Jam Kan Shi Vij Che 10 Koz Mum Koc Thi Hyd 0 48.00 53.00 58.00 63.00 68.00 Microeconomic Competitiveness ScoreInstitute for Competitiveness, India
  • OWNERSHIP OF CONSUMER DURABLES - MOBILE VERSUSC100.5 OMPETITIVENESS Sri Jab Luc JaiCha Kol Del Asa Ben Gur 100 Deh Shi IndNasOwnership of Consumer Durables- Mobile Jam Pud Guw Far Mum VisKan Mys Vij Mad Bho Che All Nag y = 0.016x + 98.61 Amr Raj Sur R² = 0.019 Pun Hyd 99.5 Var Ahm VadKoz Koc Thi Dha Jam 99 Mee Agr Rai Lud Pat Coi Ran Bhu 98.5 Noi 98 48.00 53.00 58.00 63.00 68.00 Microeconomic Competitiveness ScoreInstitute for Competitiveness, India
  • THE UNTAPPED ASSET OF COUNTRY: TIER 2-3 CITIES  Consists of pool of opportunities  Avoids the pitfalls of the megacities  More people are moving towards them as they are facing scarcity of land in Mega cities  Each city has its own competitive edge  Still preferred by many people  For instance, Growth of organized retail 50% 40% 50% 30% 35% 20% 10% 0% Tier I cities Tier II and III citiesInstitute for Competitiveness, India
  • URBANIZATION LEVEL OF TIER 2 CITIES Vishakapatnam 47.51 Vijaywada 41.01 Varanasi 43.43 Vadodara 49.54 Thiruvananthapuram 53.80 Surat 43.48 Rajkot 43.48 Patna 43.48 Nashik 42.53 Nagpur 68.30 Meerut 51.13 Maduari 60.64 Ludhiana 59.14 Lucknow 66.20 Kozhikode 67.15 Kochi 68.07 Kanpur 65.93 Jamshedpur 55.55 Jaipur 52.51 Indore 74.09 Dhanbad 58.13 Coimbatore 75.83 Bhopal 80.84 Asansol 66.93 Agra 45.87 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 Source:- Census 2011 and Institute for Competitiveness AnalysisInstitute for Competitiveness, India
  • UNTANGLING THE LINKAGES BETWEEN CITY, COMPETITIVENESS &ECONOMIC GROWTH  More advanced economies are more urbanized economies  Cities tend to be the only place where companies and individuals find opportunities for successful economic activity  Rise of cities is seen as an inevitable part of development but also as a policy challenge  Avoid a political schism between metropolitan and rural regions  Cities have a different role to play in advanced economies  Cities are the places where different types of proximity benefits can reinforce each other  From the competitiveness perspective, the policy imperative is crucial for cities as well as rural regions and also the same  Cities and the rural regions around them should cooperate closely The case with Mumbai  Tried to manage the growth by creating artificial boundaries  The approach failed and made living conditions worse  Different policy approach is required that focuses on better public services and land use inside the city  Competitiveness-oriented policy approach can be used that changes the economic fundamentals of where people live and workInstitute for Competitiveness, India
  • SECTORWISE TOTAL INVESTMENTS IN PPP PROJECTS IN INDIA :2011 99324.61 Urban Development Roads 244289.176 Railways 3913.03 Ports 82402.67 Health Care 1887.2 Energy 85141.18 Education 1922.47 Airports 19131 0 50000 100000 150000 200000 250000 Project Cost (Rs. Crore) Source:- PPP Database and Institute for Competitiveness AnalysisInstitute for Competitiveness, India
  • URBAN INFRASTRUCTURE: TRANSPORTATION IN INDIAN CITIES Chaotic situation in most cities except the mega cities where the number of commuters is so high that the transportation seems weak Challenges: - Vast gaps between demand and supply - Poor infrastructure such as insufficient routes and roads - Increase in private vehicles which leads to congestion and also slows down the speed of other vehicles such as buses etc. to 10-12 km - Leads to environmental pollution - Absence of comprehensive parking facilities in the city Operations of Road Transportation in Major Cities: 2010-11 7000 300 278.59 6110 6000 5771 250 5000 205.38 4652 200 4000 154.02 3414 152.71 138.66 150 3000 99.9 100 2000 942 956 50 1000 0 0 Chennai Bengaluru Mumbai Ahmedabad Kolkata Delhi Total Fleet Held Vehicle Productivity (km/Bus/Day) Source:- Road Transport and highways Ministry, 2010-11 and Institute for Competitiveness AnalysisInstitute for Competitiveness, India
  • OTHER MODES OF TRANSPORTATION • The other major mode of transportation in cities is Railways • Though it is dominant for the inter city transportation only in cities • Also has a different face in every region such as in - Delhi – Metro Rapid Transit System (MRTS) is main lifeline but Local Rails are also present - Kolkata – The Underground Metro, The Local Rails and the tram, all are widely used by commuters - Mumbai – Local Trains however, metro will be operational after short period, as reported by authorities - Bengaluru – The introduction of Metro in the city has change the travelling experience of the commuters Passengers carried by railways (million passenger-km) South Africa 18865 India 903465 China 791158 Germany 78582 Japan 244235 United States 9518 United Kingdom 55019 Source:- World Bank and Institute for Competitiveness AnalysisInstitute for Competitiveness, India
  • URBAN INFRASTRUCTURE: WATER 0.9 14 0.8 12 12 Production/Population (m3/d/c) 11 0.7 10 Water Availability (hours) 0.6 0.808 8.3 0.5 8 7 0.4 6 6 4.5 5 5 4.3 0.3 4 3.5 4AVERAGE=0.244 0.2 2 3 2.5 3 0.305 1.5 0.332 0.246 0.217 0.244 2 0.75 0.1 0.131 0.286 0.246 0.267 0.248 0.146 0.22 0.185 0.108 0.188 0.168 0.213 0.182 1 0.3 0 0 Production/Population (m3/d/c) Water availability (hours) Source:- India Infrastructure Report 2011 and Institute for Competitiveness Analysis Institute for Competitiveness, India
  • URBAN CLUSTERS “Geographical concentrations of industries that gain performance advantage through co-location”  Brings together companies, suppliers, service providers and associated institutions in a particular field  The close proximity – by geography and activities - provides economic benefits  Facilitate commercialization and new business formation through spinoffs and startups  Cluster initiatives can act as policy catalysts for competitiveness  Growth of one competitive firm generate demand for other related industries  Forces firms to improve and innovate  Facilitate technology and knowledge transfer that strengthens the cluster and promotes future growth  Few examples: City Industrial Cluster Raipur Iron & Steel Cluster Ahmedabad Chemical Cluster Surat Gem & Jewelry Cluster Nashik Engineering cluster Guwahati Bamboo Cluster Vijayawada, Auto Components Cluster Chennai Bangalore Machine Tools Cluster Hyderabad Pharma Cluster Kanpur Leather Cluster Ludhiana Textile ClusterInstitute for Competitiveness, India
  • SUCCESS STORY OF CLUSTER IN BENGALURU The ICT Cluster in Bengaluru has attracted people and is also known as the Silicon Valley of India Currently Boasts of over 1500 IT firms out of about 3500 IT firms in India Indian companies such as Infosys, Wipro, Iflex have strong presence Wholly-owned subsidiaries of MNCs such as Motorola, Texas Instruments and Hewlett Packard have their base in the city Around 1/3rd of all of India’s software exports are from the city United Nations Human Development Report has ranked the city as the 4 th in the category of global hub of technological innovationFactors that contribute Educational Institutions and training centers (IISC, IIIT, IIM etc.) Research Institutions (ISRO) Government policies (central and local) Y2K Problem (resulted in giving an important impetus to IT development) Quality issues Jobs creation “Bangalore is a model of how an agglomeration can bring prosperity to a poor country” - Edward Glaeser, Harvard UniversityInstitute for Competitiveness, India
  • ESTABLISHED IT/ITES HUBS IN INDIATotal STPI Registered Units by 2006-07: 1400IT/ITeS Majors: IBM, Genpact Oracle, American Total STPI Registered Units by 2006-07: 166Express, Convergys, HP, General Motors IT/ITeS Majors: IBM, Cognizant, TCS, Infosys, Wipro NCR Delhi Total STPI Registered Units by 2006-07: 630 IT/ITeS Majors: TCS, Infosys, Wipro, Siemens, Accenture Kolkata Total STPI Registered Units by Mumbai 2006-07: 635 Total STPI Registered Units by 2006-07: 1060 IT/ITeS Majors: Cognizant, Pune IT/ITeS Majors: Convergys, EXL, KPIT, Hyderabad Hp, Amazon, Verizon, Convergys, EXL, Infos Msource ys, TCS Total STPI Registered Units by 2006-07: 1700 Bangalore IT/ITeS Majors: Wipro, TCS, Chennai HP, Siemens, HSBC, Compaq Cumulative software exports from Bangalore are Total STPI Registered Units by 2006-07: 900 estimated to be US$ 11 IT/ITeS Majors: Infosys, Wipro, Accenture, Cognizant billion, positioning it as the Source:- Paper on “Knowledge-based Custer Development in India Opportunities and leading IT hub of India Challenges”, MIT Institute for Competitiveness, India
  • AUTOMOTIVE CLUSTERS IN INDIA NORTH EAST Maruti Himachal TATA, HMSuzuki, Honda, Hero, Yamaha, Pradesh LML Haryana DEL HI West Bengal Gujarat Kolkata MumbaiGM, TATA, Fiat, Bajaj, Mahind Maharashtra ra, Mercedes AndhraBenz, Volkswagen, Eicher, For Pradesh ce, Skoda, Audi, Mahindra Karnata Hyundai, Ford, Mitsubishi ka Renault, Swaraj Mazda Bangalor Chennai Motors, TVS, Toyota, Volvo, e Royal Enfield, BMW, Nissan, Tamil Renault Nissan Naidu Source:- Harvard Business School – Spring 2012Institute for Competitiveness, India
  • ENHANCING CITY COMPETITIVENESS Focus on - Increases the ease of business, fetches innovative ideas, provide potential for financing 1. Public-Private - One of the successful model is the Delhi Noida Bridge Partnerships - Understand the city challenges & search their solutions, improve internal & external 2. Dealing with environment Urbanization - Some Tier-2 & 3 cities like Guwahati, Bhopal, Faridabad, Coimbatore are urbanizing at a - Leads to vulnerable conditions, create issues with respect to sanitation, water, health fast pace 3. Urban Poverty , education etc. - Government programmes: Swarna Jayanti Shahari Raozgar Yojana (SJSRY), JNNURM, Rajiv Awas Yojana - Engage major stakeholders in most of the development activities 4. Transparency and Civic - A tool for the betterment of the democracy and thus the city Engagement 5. Other Common Areas - Includes basic amenities, infrastructure, facilities etc. required for a decent standard of livingInstitute for Competitiveness, India
  • GOVERNANCE Movement of power Center State Urban Local Government City Mayor City Service Delivery Agencies Therefore, Management  Clear boundaries between Metropolitan governance body and municipal corporation  Need to make institutional arrangements  Empower Local bodies  Create well defined model for governance structure  Focus should be on managing the change wherein expectations of all stakeholders is taken into consideration provide quality services in adequate quantities to the residents A „GOOD‟ City = sound political and governance system are responsive towards the requirements of the businessesInstitute for Competitiveness, India
  • CITY BRANDING FROM WITHIN Focus on - Governed by planning norms, building controls and urban policy 1. Built Character - Immediate spatial and visual impact of city’s “Hardware” positively influence the psyche of people - Urban contexts of the city strike a deep chord with its residents 2. Urban identity - Characteristics such as historicity, accessibility, multi-vocal qualities and inclusive nature are valued - It replicates itself in recognizable pattern at multiple scales 3. Urban behavior - Helps to openly engage, individually and collectively - Adds immeasurable value to the city 4. Interstitial urbanism - Vitalizes a city, encourage a sense of belonging amongst residents and their engagement with the city Delhi can be branded if following possibilities are looked upon:  Innovatively utilizing the old structures even when urban infrastructure are being constructed  Enhancing the inclusiveness of the city via urban villages & historic settlements so as to make them vibrant contributors to Delhi’s urban experience  Improving the basic amenities within the city etc.Institute for Competitiveness, India
  • INDIA CITIES ON GLOBAL BENCHMARK Delhi (46.7) Ahmedabad (41.9) Mumbai (46.6) Kolkata (37.8) Hyderabad Bangalore (39.4) (44.6) Chennai (38.1) London Zurich (66.8) (70.4) Chicago Paris(69.3) (65.9) New York (71.4) Los Angeles Shanghai (55.2) Tokyo (68) (61.5) Hong Kong (69.3) Singapore (70) Source:- Economist Intelligence Unit and Institute for Competitiveness AnalysisInstitute for Competitiveness, India
  • KEYS FOR SUCCESSFUL CITIES ambition for future + Vision desire + shared value system Include principles such as, participation, coherency, c shaping people and not ompetitiveness, subsidiarity, s Governance Entrepreneurship merely “shaping ustainability knowledge” Creative city planning understand every city’s unique which, addresses social issues Social cohesion Specialization characteristicsInstitute for Competitiveness, India
  • THE CITIES OF FUTURE  Present cities seems stressed on multiple accounts that is, overpopulation, sketchy resources, exorbitantly high cost of living index, mal governance etc.  So the cities of future would primarily be an itsy-bitsy variation of current cities  Current cities have built in so many contra forces that they are now leviathan white elephants. However it is being suggested that city of future would be fragmentisation of population clusters  Every employee shall serve many firms  Geography and power would no longer correlate  21st century man is absolutely asocial  Technology will keep on pouring and will make one city advanced and other obsolete  Therefore, cities needs to see their future and then address the stresses bothering them and should not depend on the vacuous pronouncements of politiciansInstitute for Competitiveness, India
  • Indian Market is Highly Regional Cultures & Languages Seasonality Uneven Pattern of Wealth Distribution
  • Strategizing for Success in India Who are the Where successful should we players focus Is it an easy market to crack
  • Local Mom and Pop Store
  • The End