Subsequent to a huge shift of economic growth and opportunities to emerging economies, particularly in Asia, managing and retaining key talent has become important for sustainable growth. Organizations are being forced to rethink their talent pipeline and transform their HR function to deal with new priorities and risks.
The impact of technology and the need for innovation continue to demand new skills in new places. A clear plan for global talent mobility alongside the development of strong local talent is vital. The paradigm shift has also brought new regulator y obligations, transformed our view of pay and incentives, and refocused our definition of employee engagement.
2. • India - Preferred Investment Destination
• Gujarat – Preferred Investment Destination in India
• R&D, Human Capital
• Investment Opportunities
• Advantage Gujarat
• Doing business in Gujarat
• Key Government Agencies
Table of Contents
4. 15.0%
10.0%
5.0%
2011-12
(A)
2010-11
(Q)
2009-10
2008-09
2007-08
02
INDIA - PREFERRED INVESTMENT DESTINATION
9th largest economy in the
world by nominal GDP and
3rd largest by purchasing
power parity (PPP)
Recorded the highest growth
rates in the mid-2000s
One of the fastest growing
economies in the world (GDP
growth rate – 8.6% in 2011)
GDP growth rate
Sectors’ contribution to GDP
CAGR
Exports
14%
CAGR
Imports
14%
India is one of the
major G-20 economies:
400
350
300
250
200
150
100
50
th the 17 largest exporter and
th 11 largest importer in the world
Main Export Partners
1.73
1.6
1.52
Automobile
industry
Construction
activities
nd The 2 preferred global
investment destination
China
India
Brazil
US
10%
Growth
Decline
No Change
(World Investment Prospects Survey
2010-2012 by UNCTAD)
USD 254 billion of FDI inflows
between April 2000 and
March 2012
US
13%
UAE
12%
China
8%
Hong Kong
4%
Main Import Partners
China
12%
UAE
7%
Saudi Arabia
6%
US
6%
Australia
5%
FDI Confidence Index, 2012
A.T. Kearney Survey
FDI - Top Sectors
9.5% 9.6% 9.3%
6.8% 8.0% 8.6%
0.0%
2006 2007 2008 2009 2010 2011
1.52
1.87
0 0.5 1 1.5 2
Germany
Services
30%
Telecommunications
12%
Computer software
and hardware
11%
Real estate
11%
Power
7%
6%
Metallurgical
industries
5%
Pharmaceuticals
5%
Petroleum
and natural
gas
3%
- 200 400 600 800 1,000 1,200
Agriculture Industry Services
USD, billion
16%
17%
17%
18%
19%
20%
25%
26%
26%
26%
25%
26%
59%
58%
57%
56%
56%
2006-07 54%
Trade Scenario, USD billion
0
1990-91 1994-95 2000-01 2004-05 2010-11
Export Import
5. 03
World's largest
democracy with
1.2 billion people
Land of abundant
natural resources
and diverse
climatic conditions
Enabling business
environment
with greater global
participation
Strong Market
Fundamentals
Access to
technology as
a result of the
IT revolution
Impetus on
Infrastructure
Development
Progressive
simplification and
rationalization of
direct and indirect
tax structures
Competitively
priced skilled
labour
ADVANTAGE INDIA
6. 04
GUJARAT - PREFERRED INVESTMENT DESTINATION IN INDIA
2
7. GUJARAT HAS BEEN RANKED 1ST AS PER THE “ECONOMIC FREEDOM RANKINGS
05
FOR THE STATES OF INDIA, 2012” REPORT
Double digit growth rate with Gross State
Domestic Product of USD 75 billion
(2010-11) growing at a five year average of 10%
Growth in agricultural output in
the state over the last 10 years 11%
A highly industrialized state - Gross State
Domestic Product contribution from
manufacturing sector 28%
Gujarat’s Degree of Openness
(ratio of exports from state to
Gross State Domestic Product) 53%
A state with a population of 60 million and
one of the highest urbanization levels 43%
Increase in seat availability in
technical institutions over last 3 years 100%
A state with a high and
growing literacy rate 79%
26% A state with one of the highest share in
investments under implemented projects
in India
9. Region-wise R&D Spending – 2011 Region-wise Spending Growth Region-wise R&D spending as % of GDP
07
GLOBAL PERSPECTIVE – R&D
• Positive macro-economic outlook and attractive incentives stimulus lead R&D spending growth by almost 7% in
2011 to USD 1.3 trillion (Gross expenditure on R&D, purchasing power parity)
• Funding growth continues to be driven by Asia, with China emerging as the second largest country after U.S in
R&D spending
• R&D growth in the medium term to be driven by innovation focused economies and countries with R&D
spending less than 1% of the GDP (India, Malaysia, Indonesia, Saudi Arabia)
• Global R&D spending to augment by about 5% in 2012 to USD 1.4 trillion
Asia
35%
Europe
25%
Row
3%
Americas
37%
Asia Europe North
America
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
Growth 9% 4% 3%
0% 10% 20% 30% 40%
RoW
Europe
Asia
Americas
Americas
Asia Europe RoW
R&D
Spending 37% 36% 25% 3.10%
Source: Battelle, R&D Magazine 2012
10. % of employers finding difficulty
hiring the right talent
Construction/engineering
Transportation logistics
Chemicals
Automotive
Industrial manufacturing
08
GLOBAL PERSPECTIVE – HUMAN CAPITAL
• Subsequent to a huge shift of economic growth
and opportunities to emerging economies,
particularly in Asia, managing and retaining key
talent has become important for sustainable
growth. Organizations are being forced to
rethink their talent pipeline and transform their
HR function to deal with new priorities and risks
• The impact of technology and need for
innovation continue to demand new skills in
new places. A clear plan for global talent
mobility alongside the development of strong
local talent is vital. The paradigm shift has also
brought new regulator y obligations,
transformed our view of pay and incentives, and
refocused our definition of employee
engagement.
Globally, what the CEOs say
Looking for global growth
• 83% of CEOs expect to grow their operations in South-
East Asia, 80% will grow in South Asia. 77% in East Asia
and 77% in South America
• 59% say they see emerging markets as more important
than developed markets to their future.
Making talent strategic
• Integrating HR with business planning: 79% of CEOs
say the chief human resources officer is a direct report.
• More than three-quarters of CEOs are making a
change to their strategy for managing talent. The top
target for change for the second year running.
Skills shortages are a top threat to growth and
profitability
• 53% of CEOs see lack of key skills as a major challenge.
Only 30% of CEOs are ‘very confident’ that they will
have access to the talent they need over the next three
years.
• Talent shortages are already biting: over half of CEOs
say lack of talent meant they either, cancelled/delayed
a strategic initiative, were unable to pursue a market
opportunity or could not innovate effectively.
• 43% say it is now more difficult to hire workers in their
industry.
• 53% of business leaders say that they have the greatest
challenge recruiting and retaining high potential
middle managers. This talent pool is the most elusive.
0% 10% 20% 30% 40% 50% 60%
Pharma, life sciences
Source: PwC Global CEO Survey 2012 Source: PwC Global CEO Survey 2012
11. 09
INDIA PERSPECTIVE – R&D
• India’s R&D expenditure augmented
from USD 28 billion in 2009 to USD 36
billion in 2011, indicating a growth of
over 25%
• R&D expenditure in 2011 stood at USD
36 billion (PPP), accounting for 0.9% of
the GDP. Industry sector accounts for
25% of the expenditure
• About 75% of R&D is undertaken by
public sector, followed by private sector
and universities
• Key R&D focus sectors include
pharmaceuticals, biotechnology,
IT/ITES, auto components
• Number of R&D centres and talent pool
have grown at an impressive rate of 14%
CAGR from 2005 to 2010
• Recognizing the need for growth in
competitiveness, employment and
economy, the Government has
declared 2010-2020 as ‘decade of
innovation’ giving impetus to R&D
Spending on R&D in USD billion (PPP) - Top ten countries
R&D Spending pattern – 2010-11
Growth of R&D centres and talent pool
Source: Battelle, R&D Magazine 2012
Unite
States
d China Japan Germany South
Korea
France
Unite
d
Kingdom
India Canada Russia
450
400
350
300
250
200
150
100
50
0
Spending 405 154 144 70 45 42 38 36 24 23
Government
spending
75%
Private
sector
spending
25%
600
500
400
300
200
100
0
250,000
200,000
150,000
100,000
50,000
0
2005 2006 2007 2008 2009 2010
R&D Talent Pool R&D Centers
12. 10
INDIA PERSPECTIVE – HUMAN CAPITAL
• For the Indian economy to grow
annually at 8-9%, secondary and
tertiary sectors are required to grow at
10-11%, assuming agriculture grows at
4%. In such a scenario, focus on human
capital becomes imperative as a large
portion of the workforce would migrate
from the primary sector (agriculture) to
the secondary and tertiary sectors
• As of 2010-11, India has one of the
youngest populations in the world,
with a median age of 25. Growth
p ro j e c t i o n s by U n i te d N at i o n s
Population Division indicate that over
the next 30 years, India will have the
largest working group population, in
the age group of 15 to 64. Developed
countries, on the contrary, will face a
severe shortage of working age
population during the same period
• With initiatives of the Government
through National Skill Development
Corporation (NSDC) and various other
institutions, if the skill gaps are
addressed, India has the potential to
emerge as manpower surplus by about
47 million by 2020
Working age population in select
countries (as % of total population)
India China US UK Japan
80
70
60
50
40
30
20
10
0
2010 65 72 67 66 64
2050 68 61 60 59 51
Sector-wise Human capital requirement
in India by 2022 (in million)
Textile
&
Clothing
Building
&
Constru-ction
Auto &
Auto
compon-ents
Real
Estate
Organi-zed
retail
70
60
50
40
30
20
10
0
Source: NSDC, UNESCO population division
Finan-cial
services
IT/ITES
Electro-nics
& IT
hardware
2008 35.4 25.0 13.0 11.0 0.3 4.3 2.2 4.2
2022 61.6 58.0 48.0 25.0 17.6 8.5 7.5 0.9
13. Government offers
200% deduction for
capital and
revenue expenditure
for manufacturers
with in-house R&D
11
KEY STRENGTHS AND GROWTH DRIVERS
Skilled English
speaking
working force
Procedures relating
to investments are
simplified to
encourage FDI
Increasing Government
Support to PSUs and
autonomous bodies
Increasing industry
focus on quality
and specialized
application areas
Setting up of
Centers of
Excellence in
various areas
Setting up of
sector specific
councils for
skill development
Favourable tax regime
providing deductions
for expenditure
on R&D, donations,
customs duty benefits
Impetus to applied research through PPP
• Strengthening linkages between R&D
centers, industry and academia to increase
focus on sector responsive outcomes
Augmentation in R&D spending
• Increase in total R&D spend from 0.9% of the
GDP to 2% by the end of 12th Five year plan
Institutional strengthening and
collaboration with foreign universities
• Increasing the number of Indian Institutes of
Technology (IITs) and Indian Institutes of
Management (IIMs) and Indian Insstitute of
Science, Education and Research (IISERs)
• Foreign universities permitted to enter India
through JVs or own campuses
Low cost base
• Potential investors eyeing India as a favoured
destination for investments in R&D,
attributed to availability of talent pool and
cost competitiveness
14. • Gujarat Government has undertaken speedy and investor-friendly reforms and continues to intensify steps to
accelerate economic growth. With 5% of the total population, the state accounts for 17% of India’s overall
industrial output, 25% of exports and about 9.5% of the total workforce. Gujarat is among the top few states
in India to attract investments and create jobs
• With a strong presence across wide spectrum of industrial activities, the Government recognizes that creation of
employment opportunities would ensure that the benefits of investment are shared by the people of the state
• All the high growth sectors viz. chemicals & petrochemicals, engineering & automobile, financial services, gems
& jewellery, oil & gas, pharmaceuticals & biotechnology, ports & shipbuilding, textiles, infrastructure, will require
over 2,154,571 additional manpower by year 2017
12
GUJARAT PERSPECTIVE – HUMAN CAPITAL
Sr. No. Sector Additional Manpower requirement
Source: Directorate of Employment and Training (DET)
2012 2017
1 Oil & Gas 1,393 5,262
2 Gems & Jewellery 2,43,145 9,75,683
3 Chemicals & petrochemicals 75,873 2,61,954
4 Engineering & automobile 1,08,193 4,02,549
5 Pharmaceuticals & biotechnology 644 8,641
6 Textiles 73,880 2,47,577
8 Financial services 30,828 91,611
9 Infrastructure 51,454 1,61,294
Total 485,410 2,154,571
15. 13
GUJARAT PERSPECTIVE – HUMAN CAPITAL
• Gujarat Government has undertaken several initiatives to enhance skill development through efforts of
Directorate of Employment and Training, Directorate of Technical Education, Education Department,
Tribal Department, Cottage & Rural Development Department and Industries & Mines Department
• The Government has further enhanced initiatives for skilled human resource development to take advantage of
proposed large investments to promote balance regional development and improve Human Development Index
(HDI)
• Gujarat Industrial Policy – 2009 has laid emphasis on creation of opportunities which would directly augment the
levels of employment in the state.
60,000
50,000
40,000
30,000
20,000
10,000
0
CAGR - 25%
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Engineering
Architecture
Pharmacy
MBA
MCA
Engineering
(Diploma)
Pharmacy
(Diploma)
Number of seats in select full time
graduate and post graduate courses
Particulars 2001-02 2010-11
Number of colleges 442 1762
Number of universities 11 42
Engineering and
Management Institutes 119 497
Number of ITIs 274 1,068
Engineering and
management seats 22,535 1,23,592
ITI seats 77,000 500,000
Source: Gujarat Socio-economic review, DET
16. 14
GOVERNMENT INITIATIVES
• Introduction of programs like Kanya Kelavani and Gunotsav, to increase awareness in community about child
right to education, particularly girls education
• For the first time in primary education, Principal’s cadre established and 5,000 Principals appointed
• Establishment of education facilities :
• One Higher Secondary School at every 7 Km. in tribal areas
• One Higher Secondary School at every 10 km in general areas
• Govt. Science stream school in every taluka of the state. Rs. 4.5 lakh given by State Govt. for Lab facility in
each science stream school
• Gujarat is the first state in the country to establish Knowledge Consortium of Gujarat (KCG) for revamping
Higher Education and fostering innovation
• Gujarat Knowledge Society (GKS) for professional vocational course (first in the country). Till date 185,970
youth have received employment oriented training from Gujarat Knowledge Society
• New Syllabi & Reforms: Choice Based Credit System (CBCS)
• New Classroom : Active Learning methodology (ALM) & Sandhan through BISAG
• Integral Education: Saptadhara
% of Engineering & Pharmacy course seats for students from economically weak
sections whose annual income is less than Rs. 2.5 lakh but have secured admission on
merit, given Admission without Fee. Since 2007-08 about 25,000 students have
availed this benefit
17. 15
GOVERNMENT INITIATIVES
The State Government has introduced an industry responsive skill development ecosystem, wherein the Industries &
Mines department has planned to set up training centres in GIDCs, Industrial Parks, SEZ, Industrial Clusters and SIR
Provides training to manpower as per the industry requirement
Sector Anchor Institute
Chemical & Petrochemical
DDU Nadiad (Anchor), LD College of Engg. (co anchor)
Infrastructure CEPT, Ahmedabad
Engg. & Auto SVNIT, Surat
Textile MS University, Baroda
Garment & apparels NIFT, Gandhinagar
Gems & Jewellery Indian Diamond Institute, Surat
Plastic & Packaging CIPET, Ahmedabad
Anchor Institutes
(Apparel, Textiles, Engineering & Auto, Chemicals &
Petrochemicals,Infrastructure, Plastic &
Packaging and Gems & Jewellery)
· Curriculam Revision
· Knowledge Sharing
Industry
Empowering
Industry through
skilled & trained
manpower
· Curriculam Revision
as per the Industry needs
· Capacity building
Empowering the
training institutes by
capacity building
Skill Upgradation Centres at
GIDC Estates/Industrial
Clusters/Industrial Parks/SEZ
Short Term Bridge Courses
under PPP Mode
Specialized Skill
Development Centers
Sector specific Skill
DevelopmentTraining
Institutions & Centers
Textiles & Apparels
Gems & Jewellery
Other Sectors
To set up Specialized Training
centers in the Advance/
Specialized Technologies
& Management areas
To provide platform for
conducting need based
specific training courses
for a definite period in
the existing training centers
To provide platform to run
industry specific training
courses to meet
the industry needs
18. 16
GUJARAT – R&D SCENARIO
• Gujarat accounts for over 10% of the
total R&D spending of India in 2010-11
• The state has attracted maximum
f o r e i g n t e c h n o l o g y t r a n s f e r
agreements from 1991 to 2011, giving
fur ther boost to research and
development
• The state has over 35 R&D and
specialized institutions, focusing on
a p p l i e d r e s e a r c h f o r m a j o r
manufacturing sectors including
pharmaceuticals & biotechnology,
chemicals & petrochemicals, auto &
engineering, renewable energy, etc
• Key sector – Pharmaceuticals and
Biotechnology. The state has 40% of
the Contract Research Organizations in
the country. Key R&D segments include
clinical research, genetic engineering,
drug research and development
Technology Agreements in Gujarat
during 1991 to 2011
59%
31%
Foreign
2%
8% 1%
Engineering
Chemicals &
Petrochemicals
Pharmaceutical
Textile
Glass Ceramics
Others
19. 17
GOVERNMENT INITIATIVES –
SUPPORT FOR RESEARCH AND DEVELOPMENT INSTITUTIONS SCHEME
• Announced by the Government of Gujarat to support
development in the R&D sector
• Operative period – February 2009 to February 2014
• Proposed benefits – up-gradation of facilities and setting
up of new R&D institution, testing facilities, incubation
center, etc
• For assistance to contract/sponsored research work:
• R&D Institutions, including those established by Government
and Private sector Institutions recognized by Department of
Scientific and Industrial Research, Govt. of India and engaged
in sponsored R&D work.
• AICTE approved professional colleges including autonomous
as well as those affiliated to Universities, taking up sponsored
R&D work from industry.
Eligible institutions:
• Specific R&D Project proposals from Research and
Development Institutions, including those established by
Government and Private Sector institutions, recognized by
Department of Scientific and Industrial Research,
Government of India and engaged in sponsored R&D work.
• Proposals from AICTE approved professional colleges,
including autonomous, as well as those affiliated to
Universities, taking up sponsored R&D work from industry.
Assistance for Contract/ Sponsored research work from any
industrial unit / Industry Association to recognized R&D
Institution/ technical colleges approved by AICTE, will be
considered.
• Sponsored R&D Project proposals from Industries
Associations or individual industrial units
For support to R&D Institutions,
assistance of upto 60% of the
project cost is provided (excluding
cost of land and building)
For assistance to contract/sponsored
research work, assistance of upto
50% of the project cost is
provided (excluding cost of land and
building) subject to a maximum
of INR 50 Lakh (USD 100,000)
20. 18
GOVERNMENT INITIATIVES –
INTERNATIONAL CENTRE FOR ENTREPRENEURSHIP & TECHNOLOGY (ICREATE)
• iCreate is the Gujarat government’s initiative to promote innovation. It will develop a world class
innovation centre on a sprawling 34-acre campus, aimed at providing the best environment to young
entrepreneurs to innovate and create businesses which in turn will result in prosperity for the state as
well as for India
21. 19
INVESTMENT SCENARIO
• 5th Vibrant Gujarat Summit was held
on 12-13 Jan, 2011
• Total 8,380 MoUs worth Rs.20.83 lakh
crores were signed during the summit
• 101 countries, over 1,400 foreign
delegates and more than 35,000 Indian
delegates participated in the summit
• Around 460 tie-ups – technical,
institutional and R&D – out of which 70
with leading institutions from across
the globe for exchange of knowledge
• More than 100 eminent political
leaders, diplomats and captains of
industry on the dais showed their
solidarity with Gujarat
500
450
400
350
300
250
200
150
100
50
0
Value of
MoUs signed during Vibrant
Gujarat Summits (USD billion)
2003 2005 2007 2009 2011
15 working groups have been formed to
arrive at possible technology
driven solutions in the sectors of
nano technology, gas and
energy, agribusiness, knowledge
sector, transportation, environment
and social sector
22. 20
RECENT DEVELOPMENTS
• In January 2012, Gujarat government signed
a memorandum of understanding (MoU)
with Yunnan province of China for
cooperation to invest in technical and
research and development (R&D). The
MoU was signed between Industrial
Extension Bureau (iNDEXTb) and Yunnan's
D e v e l o p m e n t R e s e a r c h C e n t r e a t
Sachivalaya
• In April 2012 Swedish Chamber of Commerce
and Industries entered into MoU with
Government of Gujarat (GoG), iNDEXTb and
International Centre for Entrepreneurship
and Technology (iCREATE) in presence of
Sweden’s Ambassador to India Mr. Lars-Olof
Lindgren and Gujarat Chief Minister Mr.
Narendra Modi
• The delegation evinced keen interest in
mutual co-operation in trade and commerce
and human resources development. They
also extended co-operation in the fields of
research and development, high-tech agro
business and technology
“Gujarat is a Vibrant state with fast paced
development and ties between Gujarat and
Yunnan will bring mutual cooperation for
investment and industrial development”
– Mr. Li Chon, Deputy Director – Yunnan
Development Research Centre
24. 22
SECTORS FOR INVESTMENTS - R&D AND HUMAN CAPITAL
Defence related
manufacturing
Pharmaceuticals
& Biotechnology
Renewable
energy
Auto &
Engineering
Specialty &
Fine Chemicals
Public Private
Partnership (PPP)
IT/ITES
New varieties
of fibres & yarn
Energy
efficiency
31. GUJARAT – NEW PARADIGM FOR INDUSTRIAL GROWTH
The current phase – involving Integrated development of large areas like SIRs,
PCPIR and DMIC – is poised to transform the industrial scenario in the state
Phase of industrial development
Level of Integration
202 Industrial
Estates
83 product
clusters
SEZs
• Multi product
• Chemical
• Textile
• Pharma
• IT / ITeS
• Electronics
• Engineering
• Biotech
• Gems &
Jewellery
Integrated large area
developments
• Special Investment Regions
(>100 sq. km.) and Industrial Areas
(50-100 sq. km.)
• Delhi Mumbai Industrial Corridor
• GIDC Industrial Estates
• Petroleum, Chemicals and
Petrochemicals Investment Region
• Knowledge corridor
• Logistics parks
• Theme towns
Phase I Phase II Phase III Phase IV
29
32. GUJARAT - PROACTIVE GOVERNANCE
Source: Socio-Economic Review Gujarat, 2011-12, Department of Economic affairs, March 2009
30