How can INDIA be globally competitive wrt Global competitive index

1. How can India become Globally
Competitive? (w.r.t-GCI)
Presented by -
Shwetan Burkule

2. Flow of Presentation
 Definition - Global Competitiveness
 Importance
 About GCI
 12 Pillars for determination of GCI.
 India vis-à-vis the world
 Obstacles for India to be globally competitive
 Steps for Attaining Competitiveness
 Solutions for becoming globally competitive
 References

3. Global Competitiveness
 Global Competitiveness definition - Ability
of nation to provide quality products and
services at competitive prices thereby
providing adequate returns.
 Competitiveness is the Comparative
concept of the ability and performance of a
firm, sub-sector or a country

4. Importance of global
competitiveness
 To increase Productivity.
 To encourage FDI’s.
 To increase the living standards.
 To maintain the balance of trade between import
and export of an country.
 To gain macro economic stability.
 For the economic development of the country.

6. Global Competitive Index - GCI
 GCI Definition - An international ranking of countries which
uses economic and other information to list countries in order
of their competitive performance.
 Developed for the World Economic Forum by Columbia
University Professor Xavier Sala-i-Martin and originally
introduced in 2004.
 The Pillars include:
Institutions, Infrastructure, Macroeconomic Stability, Health &
Primary Education, Higher Education & Training, Goods
Market, Efficiency, Labor Market Efficiency, Financial Market
Sophistication, Technological Readiness, Market Size,
Business Sophistication & Innovation.

7. 12 Pillars which determine GCI
of any country

8. 1. Institutions
 Public Institutions
 Private Institutions
2. Market Size
The PPP decides Market size of the country.
The Consumption pattern of the consumer.

9. 3. Infrastructure
 Overall infrastructure quality
 Railroad infrastructure development
 Quality of port infrastructure
 Quality of air transport infrastructure
 Quality of electricity supply
 Telephone lines

10. 4. Macro economic stability
 Government surplus/deficit
 National savings
 Inflation
 Interest rate spread
 Government debt
 Real effective exchange rate

11. 5. Health and primary education
 A. Health
 Infant mortality
 Life expectancy
 Tuberculosis prevalence
 Malaria prevalence
 HIV prevalence
 B. Primary education
 Primary enrolment

12. 6.Higher education and training
 Quantity of education
Secondary enrolment ratio
Tertiary enrolment ratio
 Quality of education
 Quality of the educational system
 Quality of math and science education
 Quality of management schools
 On-the-job training
 Local availability of specialized research and training
services
 Extent of staff training

13. 7. Goods Market efficiency
 Distortions
- Efficiency of legal framework
- Extent and effect of taxation
- Number of procedures required to start a business
- Time required to start a business
 Competition
- Intensity of local competition
- Effectiveness of antitrust policy
- Imports
- Prevalence of trade barriers
- Foreign ownership restrictions
 Size (Export & Import)

14. 8. Labor Market Efficiency
 Flexibility
- Hiring and firing practices
- Flexibility of wage determination
- Cooperation in labor-employer relations
 Efficiency
- Reliance on professional management
- Pay and productivity
- Brain drain
- Private sector employment of women

15. 9. Financial Market Sophistication
 Ease of access to loans
 Venture capital availability
 Soundness of banks
 Local equity market access

16. 10.Technological readiness
 Firm-level technology absorption
 FDI and technology transfer
 Cellular telephones
 Internet users
 Personal computers

17. 11. Business sophistication
 Networks and supporting industries
- Local supplier quantity
- Local supplier quality
• Sophistication of firms’ operations and strategy
- Production process sophistication
- Extent of marketing
- Control of international distribution
- Willingness to delegate authority
- Nature of competitive advantage
- Value-chain presence

18. 12.Innovation
 Quality of scientific research institutions
 Company spending on research and development
 University/industry research collaboration
 Government procurement of advanced technology
products
 Availability of scientists and engineers
 Utility patents
 Intellectual property protection
 Capacity for innovation

19. How to be Globally Competitive
 Need to address one basic question:
Why are the heavyweights of India so lightweight globally?
Reason is that either we have not aspired to go global or we do not have global orientation.
Global Repositioning of India Competing in Global Market

20. Competitiveness among
BRIC and India
 According to Goldman Sachs
report on 22nd Feb 2008, India
is the more economic growth
engine among the BRIC
nations.
 This is because of
improvement in the ranking of
PPP (Purchasing Power
Parity) of India from 5th to 4th
position.
 Also India is the youngest
country in the world as
compared to BRIC and other
developed economies like US
and JAPAN.

21. Contd.
 In order to emerge as a global hub, India would face
competition from other low cost countries such as
• China
• Thailand
• Brazil
IMaCS has compared the cost competitiveness of India
with respect to these countries in terms of factors like
• Taxes and duties
• Cost of manufacturing
• Economies of scale

22. Obstacles to India for being
Globally competitive
 Ever Increasing Population
 Widespread Corruption related to tax collection,
exports, custom duties, government offices.
 Poor Basic infrastructure such as roads, water
and electricity.
 Inaccessibility to internet, telephones, mobiles.
 Poverty and apathy towards education.
 Apathy towards R&D and non parallelism
between industries and education undertaken.

23. Steps for Attaining Competitiveness
 Growing Trend of acquiring Foreign Companies.
 Competitiveness is mainly attained by India in sectors
like:
IT & ITES, Pharmaceuticals, Textile
eg- SWITCH companies and Pharma gaints like
Ranbaxy, Dr.Reddys, Piramal etc.
 Competitiveness is yet to be attained in major sectors
like:
Agriculture and Allied Business Industry, Manufacturing,
Automotive, etc.

24. Solutions for becoming Globally
Competitive
 As lndia integrates into the world economy, there is a
need to reposition itself as a country.
 Branding of India has thus become the necessity.
The casual approach needs to be shredded off and
professionalism be developed.
 To achieve this objective, lndia needs to reengineer
itself in the following areas:

25. Solutions Contd.
 Privatization of public enterprises;
 Incentives for quality;
 Innovation and productivity;
 Employment through growth;
 Globalization of domestic markets;
 Investment in quality and innovation;

26. Solutions Contd.
 Process reengineering;
 Reduction in unorganized sector.
 Up gradation of transport and logistics;
 Special economic zones and energy reliability. Strengthening rural
sector growth
 Improving access to assets and sustainable natural resource use:-
 Balancing poverty reduction and conservation priorities

27. References
 http://www.thehindubusinessline.com/2007/08/03/stories/
2006070300540900.htm
 http://www.npcindia.org/productivity%20for%20global
%20competitiveness.htm
 www.ibef.org
 http://en.wikipedia.org/wiki/globalcompetitiveness
 Indian Economy – Ruddar Dutt and KPM Sundharam,
S.Chand Publication, 51st Revised Edition.

28. Thank you !