India Practically Ralph Moreau

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India Practically Ralph Moreau

  1. 1. High Tech India?<br />ralph.moreau@fitagency.com<br />Technology Attaché, Flanders Investment and Trade<br />Embassy of Belgium, New Delhi<br />
  2. 2. Perception of India today<br />A thriving business environment opening up<br />Population and market of > 1.1 bil. people> 50% < 25 yo<br />Tremendous economic growth<br />Sources: Economist, Newsweek, Businesweek<br />
  3. 3. Perception of India today: mixed signals<br />But…<br />A lot of work to be done on basic infrastructure, education and healthcare capacity<br />Are certain industries overheating? Attrition rates, salary inflation…<br />Middle-class<br />~1000 mil.people <br />~50 mil.?<br />400 mil. ?people <br />Sources: Economist, Newsweek, Businesweek<br />
  4. 4. Also…<br />
  5. 5. Is there reason for the India hype?<br />If you know your facts…<br /><ul><li>India is not 1 country, but a sub-continent, with strong regional tendencies, powerful states
  6. 6. Complex society, mix of religions, legacy of caste system
  7. 7. Young democracy, with the legacy of the ‘socialist’ period, with a heavy bureaucracy, related corruption, …
  8. 8. Local way of doing business, long vsshort term, …</li></ul>… the potential is there!<br /><ul><li>India has come a long way, since the mid 90’s,things are changing!
  9. 9. Industries that have been liberalized have boomed!
  10. 10. The potential is in the numbers!</li></li></ul><li>Number Champion: Telecom!<br />3rd largest telecom market in the world<br />Revenue > US$ 22 Bn<br />Subscriber growth 45%, revenue growth 25%, 2.83% of GDP<br />15<br />E.g. Nokia plant in Chennai : 100 mil. mobile handsets / year.<br />Sources: TRAI, DIPP, FICCI, PWC, GOI<br />
  11. 11. The magic is in the numbers!<br />500 million people under the age of 25 (“the future belongs to India”)<br />World Bank & UN predict the following GDP scenario, based on the positive Indian demographic situation<br />Every year India produces:<br />6,000 New PhDs<br />200,000 New Engineers<br />300,000 New Science Grads<br />
  12. 12. Where do Indians live? What do they do?<br />
  13. 13. Where do Indians live? What do they do?<br />~ $1.209 trillion<br />Agriculture, 20% of GDP, ~70% of population<br />ICT, 5% of GDP, ~0.2% of population<br />
  14. 14. IT, Technology, R&D, … in India, what to expect?<br />?<br />
  15. 15. What about R&D ? IP ? Products ?<br />Dec 24 2007<br />Feb 4 2008<br />
  16. 16. Some facts…<br />Public/Private ratio of contribution to R&D,in Belgium (and Western/developed world): 1 to 2 | in India: 6 to 1<br />People in “research” related jobs / 1,000 persons employed:India 21 / 1,000 | China 85 / 1,000 | US 285 / 1,000<br />Direct Relationship between the R&D investments of any nation and its prosperity. in USA 2.6% of GDP | in India 0.8% of GDP | in Belgium ~2% <br />In 2005, India filed 17,000 patents, but… <br />Most by foreign companies or subsidiaries, <br />only 3,500 by ‘Indians’, and top 5 ‘Indian’ filers were government sponsored institutes<br />
  17. 17. Initial conclusion of the facts<br />R&D is Business, Western countries have since long treated R&D as Business<br />In India R&D has long been considered primarily an academic exercise. <br />Until recently there was practically no link between research and industry. <br />Research primarily done at government institutions, private companies carry out some R&D, mostly to solve their own production problems.<br />There are very few R&D-driven companies in India.Industries that are the exceptions are mostly active in:- ICT, Pharma, Biotechnology, Medical, Clinical testing, Renewable energy, ‘Water’-technology. <br />World Bank report states “India’s national output could be 5 times bigger today, if only enterprises were to absorb and use knowledge that already exists”This means, major productivity increases, based on adopting existing IP.<br />
  18. 18. Why should we work with India ?<br />“The future growth markets are likely to be in countries like India, which have different consumer markets than the West. <br />Working with Indian partners allows you to better tailor your products to these emerging markets.”<br />Everybody (neighbouring countries, companies, …) is going to India, we need to catch up now!<br />
  19. 19. What are the challenges, for India? Partners working with India?<br />Regulatory environment discourages risk taking<br />Business climate, short vs long term perspective<br />Skills and industry knowledge<br />Quality control<br />Government hurdles, red tape<br />Low absorption of technology by SMEs, and the informal sector. 90% of workers are in the informal economy<br />Mother of all challenges = Infrastructure!<br />
  20. 20. Conclusion<br />Success of IT, BPO, KPO, … industry  created the “India brand” <br />Cost pressure triggered the need to move up the value ladder<br />This inspired multinational firms to set up R&D centers<br />Catapulted India from being adaptor to an innovator<br />Even though conventional metrics (# of patents, product companies, etc …) do not yet show the importance of India, a non-linear model of development and growth is expected (as soon as a number of basic building blocks will come in place)<br />Collaborative product development is an opportunity for our companies, bringing process skills and domain expertise to the table<br /><ul><li>If you come to India with your product, service, … make sure it is geared for the Indian market (specifications, market size, buying power, … ! )
  21. 21. Do your homework, as you would do with any other market !</li></li></ul><li>

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