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