The power of I (India) in BRICS

2,900 views

Published on

Presented by Dr. Amit Kapoor

Published in: Travel
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
2,900
On SlideShare
0
From Embeds
0
Number of Embeds
65
Actions
Shares
0
Downloads
96
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide
  • 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

    1. 1. INSTITUTE FOR COMPETITIVENESS -RESEARCH
    2. 2. Cloud Power Opportunit y BRICS India Threat
    3. 3. Cloud Power Opportunit y BRICS India Threat
    4. 4. Microeconomics of Competitiveness and Macroeconomics of Competitiveness MIcroeconomics of Competitiveness MAcroeconomics of Competitiveness Aggregate Individuals s
    5. 5. 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
    6. 6. 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
    7. 7. 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
    8. 8. 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
    9. 9. 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)
    10. 10. 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
    11. 11. 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
    12. 12. 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
    13. 13. 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
    14. 14. 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
    15. 15. 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
    16. 16. 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
    17. 17. 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
    18. 18. 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
    19. 19. 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
    20. 20. 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
    21. 21. Geopolitical Hotspots China Kashmir Conflict Tibet Conflict Cross-strait India relations Offshore Oil reserves Source: Deutche, Institute for Competitiveness Analysis
    22. 22. 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
    23. 23. 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.
    24. 24. 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. $.
    25. 25. 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
    26. 26. 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.
    27. 27. 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
    28. 28. 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
    29. 29. 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
    30. 30. 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
    31. 31. 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
    32. 32. 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
    33. 33. 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
    34. 34. Labor Productivity in India Labor Productivity ( Services in US $) 4000 3500 3000 2500 2000 1500 1000 500 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Institute for competitiveness Analysis
    35. 35. ICT service exports, service exports Services exports in Gross US$ 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
    36. 36. High Technology and Low Technology futures The Competitive Economy Hi Tech Low Tech
    37. 37. 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
    38. 38. 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
    39. 39. 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
    40. 40. 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
    41. 41. 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
    42. 42. 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
    43. 43. 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
    44. 44. 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
    45. 45. 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
    46. 46. 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
    47. 47. 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
    48. 48. 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.
    49. 49. 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
    50. 50. Country Equivalents Source: Economist Intelligence Unit, National Statistics
    51. 51. Country Equivalents Source: Economist Intelligence Unit, National Statistics

    ×