A presentation on the growth of modern India, the challenges that remain for the country, and how westerners can best communicate effectively in a business context
2. Agenda
Modern India
The Other India
Communicating With India
3. Why Should You Care?
India Matters a Lot Now
Western companies do a lot of sourcing with India now
That will continue and grow
India Will Matter a Lot More Later
China & India joining US as economic leaders
India’s population still growing - fast
You Should Learn as Much as You Can
5. The Opposite is Also True …
Today’s talk is focused on business. Really
understanding India includes culture, music,
movies, religion, history, geography, etc., etc.
This is only a 90 minute talk. It can only hit the
high notes even about business
You will never meet the “average Indian”. Beware
of assuming generalizations apply to individuals
7. Epitome of “Flat World” Success
Second most populous country(1.1 billion)
Most populous democracy by far
One of world’s best performing economies
12th largest by market exchange rates
4th largest by Purchasing Power Parity (PPP)
Middle class quadrupled to 250m since 1990
1% of poor cross poverty line ($1/day) per year
8. Consistent High Growth, Even Now
India's Real GDP Growth Rate
10
9
% Real GDP Growth
8
7
6
5
4
3
2
1
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Year
10. Indian Exports Surging
Merchandise
Exports Doubled from $53bn 2002 to $103bn 2006
Service Exports
Doubled from $29.6bn 2003 to $60.6bn 2006
Goods/ Services
Exports as share of Rose from 11.6% 1999 to 20.5% 2005
GDP
12. India Churning Out Tech Grads
1,522 degree-granting engineering colleges
Annual student intake of 582,000
Indian Institutes of Technology
28,000 graduates per year
Indian Institutes of Management
3,000 graduates per year
Infosys Training Campus
50,000 graduates per year
13. Indian Firms Going Global
Information Technology / BPO Automobiles
Infosys, WIPRO, TCS Tata
Telecommunications Film Industry
Reliance Bollywood
Pharmaceuticals
Dr Reddy’s, Ranbaxy
14. World Coming to India for Care
450,000 Medical Tourists came to India in 2007
Projected value of $2 billion by 2012
Very High Quality at Very Low Prices
Heart bypass in US $95,000, in India $10,000
including airfare, hotel, and treatment
Apollo, Fortis, Max, Wockhardt building US quality
hospitals co-branded by Harvard, Johns Hopkins
Narayana Hrudayalaya
1,000bed heart hospital, 50-60 surgeries/day
Telemed links to 54 sites in India, SW Asia, & Africa
23. Forty Years of Missed Opportunity
GDP of India vs. Korea as percent of US GDP
24. License Raj, “Hindu” Rate of Growth
Labor intensive production restricted to small firms,
less than $100,000 in PP&E, in 325 product categories
including clothing, shoes, toys, and furniture
Big businesses and MNCs limited to few industries.
IBM, Coke, and others forced out
Permission needed for M&A’s, expansion, new products.
Projects more than $2.5 million needed cabinet OK
90% of banks nationalized. Reserve requirements
reached 53% of deposits. 40% of lending for small firms
Under Indira Gandhi GDP growth averaged 3.2%
27. Life Expectancy Still Low
80.9 82.5
79.8
71.6 69.7
63.7 64.6 63.1 62.6
55.8
42.8
Norway Australia Sri Lanka China Indonesia India Pakistan Bangladesh Nepal Mozambique Niger
According to data from 2005
27
28. Women Still Dying in Childbirth
830 Maternal mortality Rate (per 100,000) 2005
570
450
320
45 58
N.A
China India Nepal Pakistan Sri Lanka Bangladesh South Asia
Source: United Nations Development Programme (UNDP), Human Development Report 2007-08
28
NA: Not available. Figures shown for India are at variance with the official figures of the office of Registrar General on India (RGI) for Maternal Mortality
Rate and Infant Mortality Rate. Data shown in the tables are as per the methodology and adjustments made by UNDP
29. Infants Also Dying at High Rates
Infant Mortality Rate
35
30
# deaths/1,000 births
25
20
15
10
5
0
South Korea U.S. China India
Country
30. Too Many in Agriculture
65.42
56.64
52.06
12.13 12.9 12.62
11.27 11.2
9.1 9.16 9.24
6.98 5.57
4.44 4.06 4.61
2.56 2.88 2
0.66 0.34 0.78 0.67 0.34 1.36 0.63 0.35
1983 1999-2000 2004-05
Agriculture Mining Manufacturing
Electricity, Water etc. Construction Trade, Hotels & Resturants
Transport, Shortage & Communication Financial Services Community Services
Source: Various rounds of NSSO survey on employment and unemployment/Planning Commission
32. Labor Laws Keep Firms Inefficient
Firms over 100 workers can’t layoff even
under bankruptcy
3 weeks written notice to change any working
conditions
Laws apply to only 10% of the workforce, yet
discourages hiring new workers.
Keeps companies small – of 42m companies
only 1.4% employ more than 10 people.
88% of labor force informal sector: produces
only 44% of GDP
33. Trade Too Difficult
Exporters need 258 signatures and 118
copies of required paperwork. 22 hours to
do data entry for required information.
Port / Airport Facilities and Procedures
Shipping: Mumbai, exporting 3-5 days
compared to 18 hour international norm
Air freight: New Delhi, exporting 2.5
days / importing 15 days compared to 12
hour international norm
38. What does this mean?
India is the modern country described in the
first section of this presentation with a bright
present and even brighter future
But it is still the other, older India with a lot of
serious problems to solve.
Respect Indians for what they have
accomplished in a very short time
Understand they may see things very differently
because they come from a different background
40. Who are we talking about?
Indians living in the US do adapt - to a degree
Indians visiting the US may not
Eating Pizza Hut doesn’t make you American
They go home to India
Once again, be careful of generalizations
41. Measuring Cultural Differences
The GLOBE survey
Scientifically-designed, controlled survey
10 years
17,000 managers
Asked to describe their company culture
62 societal cultures
Including India and the US
42. Comparing US & Indian Culture
Institutional Collectivism
6
5
Humane Orientation Group Collectivism
4
3
2
Uncertainty Avoidance 1 Gender Egalitarianism
0
Future Orientation Assertiveness
US India
Performance Orientation Power Distance
43. Key GLOBE Metrics
Group Collectivism +28%
The degree to which individuals express (and
should express) pride, loyalty, and cohesiveness
in their organizations or families.
Assertiveness -14%
The degree to which individuals are (and should
be) assertive, confrontational, and aggressive in
their relationships with others.
44. Key GLOBE Metrics
Power Distance +10%
The degree to which members of a collective
expect (and should expect) power to be
distributed equally.
Gender Egalitarianism -7%
The degree to which a collective minimizes (and
should minimize) gender inequality.
45. To Save Face, You Can’t
Openly disagree with a superior
Publically correct a superior
Criticize someone or their idea directly
Directly challenge another’s statement
Say that something requested is not possible
Admit lack of understanding
Admit failure
Ask for help
46. The Indian Yes
“Yes” by itself just means “Uh huh, I hear you”
Beware head movements
True agreement will always be more than “Yes”
Indians want to agree so, when they do it is
enthusiastic and whole hearted
47. Not “No”, Just Not “Yes”
Absence of Yes
No-response
Changing the Subject
Postponing an Answer
Repeating the Question
Asking what YOU want
A qualified response
48. Suggesting Bad News
You won’t hear “We are going to miss the date”.
You may hear “This is an aggressive schedule”
You won’t hear “That’s not possible”. You may
hear “That might be possible”
You won’t hear “I need help”. You may hear “This
task is taking longer than I expected.”
You won’t hear “That’s a bad idea”. You may hear
“That’s interesting. I like X part of the idea”
49. This Is Not Evasive
Indians are not avoiding conflict, just direct
conflict
Indians are not trying to mislead
They are being direct - in their way that another
Indian will clearly understand.
50. What Can You Do?
Be sure you REALLY got agreement
Listen for subtle implications of difficulty
Find ways to ask for feedback privately
Consider suggesting your own concerns or
questions to elicit theirs
Keep learning to increase understanding
51. Continued Learning
The World is Flat, Thomas Friedman
The Post-American World, Fareed Zakaria
India: The Emerging Giany, Arvind Panagariya
Speaking of India, Craig Storti
In Spite of the Gods, Edward Luce
Economist.com, search India’s Economy
54. GLOBE Metrics
Future Orientation
The extent to which individuals engage (and
should engage) in future-oriented behaviors
such as delaying gratification, planning, and
investing in the future.
Humane Orientation
The degree to which a collective encourages and
rewards ( and should encourage and reward)
individuals for being fair, altruistic, generous,
caring, and kind to others.
55. GLOBE Metrics
Institutional Collectivism
The degree to which organizational and societal
institutional practices encourage and reward
(and should encourage and reward) collective
distribution of resources and collective action.
Performance Orientation
The degree to which a collective encourages and
rewards (and should encourage and reward)
group members for performance improvement
and excellence.
56. GLOBE Metrics
Uncertainty Avoidance
The extent to which a society, organization, or
group relies (and should rely) on social norms,
rules, and procedures to alleviate
unpredictability of future events. The greater
the desire to avoid uncertainty, the more people
seek orderliness, consistency, structure, formal
procedures and laws to cover situations in their
daily lives.
Editor's Notes
In 1990, India had 5 million phone lines in total. Today it adds 5 million per month.
By comparison, US grew only 1.1% in 2008 and is negative so far in 2009At this pace, national wealth doubles about every 10 years.
Back office of the world: If you are in IT, You are in IndiaCisco, Msft, Philips, IBM, GE HealthcareCisco has made Bangalore their second headquarters with half their executive staffIBM has 80,000 employees in India
Companies come to India for the highly-skilled, English speaking laborSlide background is one of the building on the Infosys campus. Many other giant training buildings
Tata bought both Landrover and Jag, Tata Nano (world’s cheapest real family car)Bollywood sold 3.6 billion tickets worldwide in 2005 versus 2.6 billion for Hollywood movies
Poverty means less than $1/dayPoverty rate in orissa and bihar >40%80% live on less than $2 per day = double
TB, malaria, polio, dengue, diarrhea, still major killers. Think about effect of the flu in the US.Absenteeism up to 40% among government healthcare workers
Poor access to health care, high childhood death rates still, high burden of infectious disease – diseases of povertyAmong the middle class and the wealthy, developing diseases of affluence: very high rates of cardiovascular mortality
60m malnourished children – 40% of world’s total
50% of population involved yet produces only 20% of GDPProfessional services 13% of GDP 1.2% of population employed
Highly corrupt
This is why every Indian IT campus has back-up power generation.
highly variable between states (Kerala 90% lit rate, Bihar 47%)Enrollment in secondary education 36%Of 19-24 year olds,only 9% in college – constraint on ability for IT industry to take on more work.Education funding below level of sub-saharanafrica.