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Accenture New Waves of Growth for India Unlocking Opportunities

Accenture New Waves of Growth for India Unlocking Opportunities

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  • Foreword
  • Executive summary
  • The quest for growth
  • The emerging- markets surge
  • The multi- technology future
  • The resource economy
  • The last word

New Waves of Growth for India

Unlocking Opportunities



Foreword Executive summary The quest for growth The emerging-markets surge The multi-technology future The resource economy The last word

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While there is a growing recognition that India cannot reach its full competitive potential without the effective engagement of its massive human capital. and innovation systems—critical for igniting sustained growth. technology is marching onward with more applications and more users. others through coordination among different players across their supply chain. several trends are pervasive and virtually unstoppable: a large section of India’s population is entering the working-age group. however. the corrective interventions to improve employability of the future workforce remain insufficient. While developed markets are still experiencing sluggish recovery. swift changes will create both opportunities and challenges for businesses in India. In this report. Sanjay Jain Managing Director. energy and natural resources are growing even more scarce. It is clear. Emergingmarket multinationals have established new competitive positions and garnered new market share in a number of industries. they can help drive inclusive growth in India. still others through non-traditional and counterintuitive partnerships. Business leaders and policymakers will have to make difficult choices to plant the seeds for future success in today’s resource-constrained environment. The Indian economy currently faces a deficit of many supply-side elements—such as the right type and mix of skills. The tools for competing are also changing – witness the emergence of new business models. Some opportunities and challenges will be best tackled through bilateral and multi-lateral cooperation. It will not be easy. that the effort will be very worthwhile—but only if stakeholders throughout India act now. new ecosystems and new innovation networks forged through technology advances. the developed-market multinationals have regrouped—and are striving to win back the ground that they lost during the recession. While many variables will affect the Indian economy over the next decade. and the winners will be those companies that can position themselves at the forefront of change. And we do not want to give the impression that there is a silver bullet that will enable companies and governments to capture these opportunities. We implore businesses to make the right investments so they will be well-equipped to seize advantage of the global growth that is coming. we call on businesses in India to reassess where their future opportunities will lie and encourage them to place strong bets on future global growth.Foreword The recent economic slowdown has transformed markets around the globe. The stage is set for fiercer-than-ever competition. activity is quickening among the emerging economies. Accenture Management Consulting 5 . Meanwhile. and economic demand is gravitating toward the emerging world. execution capabilities for large infrastructure projects. This confluence of dramatic. The forces coalescing today to shape the India of tomorrow are complex. thus the means for managing them must be complex as well. If businesses and governments can make the right responses to these trends and build the right capabilities.

namely. Emerging economies also face a daunting challenge: to sustain their impressive growth rates for years to come. a healthy population. India needs to rebalance the foundations of its growth to build structures and capabilities that can help it withstand economic shocks and sustain high growth rates far into the future. strong physical and financial infrastructure. these trends can strongly drive future economic growth and job creation for India. As this new landscape takes shape. instead of 8. supplemented by an increased commitment to developing “sunrise” industries. Despite these achievements. In addition. diversify that growth across a broader range of sectors and make it more inclusive across their populations. the emerging-markets surge. Such uncertainty is amplified by the knowledge that many of the previous sources of growth—such as debt-fuelled consumption in the developed economies of the UK and US—have evaporated. over the next decade. The country’s growth rate remains among the strongest in the world.Executive summary There are clear signs of economic recovery across the globe. but growth continues to be uneven across countries. human capital and innovation. New growth sectors must be built on strong supply-side foundations: enough workers with the right skills. This equates to an extra Rs 11 trillion (US$244. India must do more to take its place at the table with the world’s most competitive economies. smart application of technology and clear channels to new markets. the rise of new technologies and the burgeoning resource economy.0 percent in the current trajectory. fueled primarily by rising domestic demand. Uncertainty and volatility still cloud the horizon. The Indian economy has the potential to grow by 8. India must also broaden its base of economic growth by uncovering new sources of consumer demand in previously underserved markets such as the rural and lower-income communities. To serve the rising demands of its growing population. India has the opportunity to position itself at the forefront of future economic growth — as a leading international hub for investment. To improve its position. academia. Accenture research in collaboration with Oxford Economics suggests that with the right responses from business and government.4 billion) 6 . government and the non-profit sector as well as deep analysis of extensive secondary data and Oxford Economics’ econometric modeling. Applying two distinctive lenses—a sectoral view and a macroeconomic perspective— our findings are based on extensive discussions with panels of experts representing business. This report—New waves of growth for India – Unlocking opportunities— identifies three key trends that hold enormous promise for India in the decade ahead.7 percent per year. India must revitalize its traditional industries such as agriculture and manufacturing.

New technologies have the potential to mobilize communities. over and above what India would otherwise achieve. To capitalize on the growth opportunities in emerging markets. enable innovation and increase productivity. Threequarters of these jobs would arise from India’s exports to other emerging markets. The emerging markets surge A primary driver of India’s trade growth has been a rise in trade with other emerging economies. labor movements and aid extensions. This report highlights key actions that policymakers and business leaders can take to leverage these trends and stimulate renewed growth in the Indian economy. India needs to play a more proactive role in building new bridges to the emerging world by fostering links in investments. consumer goods. from the green and high-tech sectors. cloud computing and analytics will create new sources of demand in 7 .of GDP by 2020 and 37. trade. India’s increasing integration with other emerging markets will open new opportunities for Indian businesses in the areas of services. Organizations can kick-start the foray into emerging markets by drawing on their experiences of serving diverse consumer segments in India. one-quarter. The multi-technology future Technology is central to economic progress and the improvement of living standards in India. Next-generation technologies like mobility solutions. Companies that ignore trade with emerging markets will not only lose valuable business opportunities but also miss out on the potential to increase their own country’s long-term growth prospects. infrastructure and medical tourism. talent development and innovation in other emerging markets can be the recipe for success for companies from India. tourism. Blending this experience with local approaches to selling.5 million additional jobs.

The resource economy The battle for resources is growing fiercer across the globe.and sustained investments in next-generation technologies. The last word How can organizations start capitalizing on the new waves of growth today? To secure their competitive position in the increasingly interdependent economy of the next decade. Realizing the growth potential of the resource economy will require greater coordination and collaboration among stakeholders across the value chain— policymakers. Unleashing these technologies’ full potential will call for serious investments in building digital literacy and skills and creating smart.India. land and solidwaste management solutions. Businesses will need to continually look outward for new market opportunities and sources of knowledge. fresh sources of growth are unfolding in the form of water. a reality. academia and R&D institutions . The widening energy demand-supply gap is creating an urgent need to exploit alternative energy sources such as wind. alternate fuels and hybrid vehicles. as well as inward for new skills and capabilities. geo-thermal and nuclear. Seeking out creative ways to transform waste into profit and satisfying the huge demand for energy-efficient products and services can present profitable business opportunities in the years to come. businesses will need to place strategic bets on the future areas of growth and build the right strengths and capabilities. the need for a low-carbon economy will accelerate the demand for intelligent energy solutions such as smart grids. businesses will need to adopt a systematic and disciplined approach to innovation. driven by rising demand coupled with rapidly dwindling sources. hydropower. With global warming fast becoming 8 . Businesses will need to take a long-term view by securing their future sources of supply and shifting to next-generation fuels and alternative energy sources. green infrastructure. finance and healthcare to India’s massive rural markets. To capitalize on the opportunities created by technology change. In the management of scarce resources. businesses. Companies that are unable to utilize today’s assets and capabilities to build tomorrow’s competitive advantages cannot expect their growth to continue in the long term. solar. which have remained outside their reach owing to poor infrastructure and connectivity. transparent regulatory standards. They will also give birth to whole new business models for providing education.

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consumer and business confidence is improving in most parts of the world.2 percent in FY2011 and 7.4 billion by 2050. With the broadening of the global economic recovery. India has the opportunity to position itself as a leading international hub of investment. The International Monetary Fund (IMF) projects India’s growth at 8. increasing to 1.2 India is home to 20 percent of the world’s population.3 Indian businesses have successfully capitalized on labor-cost arbitrage to put India on the world map as a major exporter of services. This will require continued investments in traditional industries and in “sunrise” industries (those in which huge advances have already been 10 . As this new landscape takes shape.. It must also broaden its base of economic growth by rebalancing its agriculture. and financial markets are reviving. Indeed. a competitive manufacturing and sourcing hub and a centre for low-cost. These businesses have profited and grown by tapping into a large university-educated.1 India will continue to witness strong growth in the near future.4 To improve its position. According to Asian Development Bank estimates..2 billion by 2030 and 1. fueled primarily by rising domestic demand. human capital and innovation. India must do more before it can take its place at the table of the most globally competitive economies. Global trade is accelerating. India ranks 51st from among 139 countries reflecting the need to improve significantly on basic drivers of its competitiveness such as education. .8 percent in FY2012. according to the World Economic Forum’s Global Competitiveness Index 2010-11. high-quality research and development (R&D).The quest for growth India’s on the rise. thanks to strong consumption in rural India and plentiful employment opportunities in non-agricultural sectors. India’s middle class will explode over the next four decades. and one-third of Indians are under 15 years of age.. But it needs to do more Despite these achievements. manufacturing and service sectors. For example.. India needs to build structures and capabilities that can help it withstand future economic shocks and sustain high growth rates far into the future. healthcare and infrastructure. The country’s growth rate remains among the strongest in the world. English-speaking talent pool at a cost unmatched in developed economies. India ranks just 24th. The workingage population pool in India will only expand in the coming years. India is set to become one of the world’s top five consumer markets. Even when compared to emerging economies alone.

such as food processing. the world-renowned economic research organization.made by domestic and multinational companies). and the policies and organizational actions that can help ignite that growth. particularly if it is supplemented by an increased commitment to activities higher up the value chain. To provide a more concrete view of these potential growth opportunities. Additional countries studied in this same project include the United States. there is a fresh opportunity for government and business to collaboratively find solutions to domestic challenges and achieve sustainable growth and prosperity. This research project was part of a multi-country study that Accenture pursued to spot new waves of growth for the next decade. Germany and the United Kingdom. and by greater use of biotechnology to increase yields per hectare of land. particularly through investment in vocational education and training. opinion formers and experts across sectors. while biotechnology and advanced digital technologies also hold great potential. pharmaceuticals and renewable energy. India needs to generate job opportunities for workers from a largely agricultural background. There is tremendous potential in developing traditional industries such as agriculture and manufacturing. 11 . But doing so will require exploration of questions such as “What will drive India’s growth in the next decade?” “Can India become the world’s low-cost manufacturing hub?” “Can it expand its export markets?” and “What resources will it have available?” Mapping future growth opportunities: About our research Our research views India’s future growth opportunities through two lenses: A sectoral view: Accenture convened a series of panel discussions with senior leaders. to model the potential future impact on GDP and employment levels of these trends for the Indian economy. the size of the potential market opportunity for business. In basic and high-value manufacturing industries. The most obvious success stories are in IT-related business services. Opportunities in sunrise industries have only begun to be exploited. Each panel shared perspectives on the most promising sources of untapped growth for India’s economy over the next decade and conditions or actions needed on the supply side of the economy. A macroeconomic view: Our panels suggested that significant untapped opportunity for further economic growth and job creation lies within reach for the Indian economy. Accenture asked Oxford Economics. As India looks toward the future with the same optimism that has driven the country’s growth to date. This analysis provides unique insights into the alternative growth trajectories open to the Indian economy.

They also offer new market opportunities for 12 .7% p. The understanding that their tested homegrown business models could be replicated in similar economies is giving them the confidence to make bold moves. + 8. They are considering making inroads in countries such as Indonesia. energy. Increased trade integration can drive economic growth directly through export opportunities and indirectly through stimulation of higher productivity and innovation among export-competing firms. consumer goods and healthcare.0% p. India’s trade with other emerging markets has risen. water. Initiatives to improve digital literacy could help the high-tech sector grow further. Rs154 trn Rs11 trn Alternative trajectory increment GDP (Rs trillion) 100 80 60 40 20 0 2010 2020 Rs67 trn + 8. Over the last few years. The resource economy As the world’s resources grow scarce.Figure 1. It has provided a foundation to connect people and communities. India is at the forefront of the surge in emerging-markets. Nigeria. India’s response to this resource scarcity will generate significant employment opportunities for people with traditional and new skills and will stimulate economic growth. minerals.a. Accenture identified three new waves of growth for the Indian economy: The emerging-markets surge The rise of a multi-polar world—in which economic activity increasingly gravitates towards the powerhouse economies of Asia and Latin America— will dramatically expand trade and investment opportunities for businesses over the next decade. Businesses in India are moving beyond the more obvious choices of expanding in emerging markets such as Brazil and China. the supply of resources is limited by geopolitical factors and stiffer regulation to address externalities such as climate change.700 in GDP per capita. sectors including financial services. with spillover effects on economic growth and employment. Rs144 trn Current trajectory Source: Oxford Economics Three new waves of growth Drawing on our research and input from our panelists. Competition has intensified for resources of all kinds—land. India faces an uphill battle to secure resources for the future. South Africa and Bangladesh. food. This is equivalent to Rs 7. and improve standards of living and opportunities across the country. Simultaneously.1: India output .2010 and 2020 180 160 140 120 The Indian economy has the potential to increase economic output by Rs11 trillion by 2020 if it fully harnesses the potential of the rise of other emerging markets. The multi-technology future Technology is central to economic progress and the improvement of living standards in India. multi-technology and natural-resource security.a. enable innovation and productivity increases. Recent initiatives such as the Unique Identification (UID) project present an enormous opportunity to improve governance and public-service delivery.

giving these markets the potential to drive consumption growth for the next few decades. the world-renowned economic research organization. increases in disposable income. Oxford Economics assessed the effects of better regulation. still have large pools of untapped demand. alternative trajectory (right scale) Employment. the benefits in terms of future growth are not. with economic output reaching Rs 154 trillion (US$3.4 trillion) by 2020. constant 2010 prices (left scale) GDP. Oxford Economics began by using its global macro-econometric model to generate a baseline outlook. or “current trajectory. constant 2010 prices (left scale) Employment. such as enough workers with the right skills. assuming no significant policy or business interventions to bolster the supply side of the economy.2 trillion) in 2020. sufficient infrastructure. For each trend. With a clear demographic advantage. the size of the potential market opportunity for business.” for GDP growth and employment for the Indian economy for the period 2010 to 2020. it looked at the positive spillover effects of trade (such as knowledge transfers and innovation). These interventions could push the Indian economy onto an alternative trajectory. increment in alternative trajectory. current trajectory (right scale) GDP (Rs trillion) 120 110 100 90 80 70 60 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 570 560 550 540 530 520 510 500 490 2020 Source: Oxford Economics India’s growth potential: current and alternative trajectories To provide a more concrete view of these potential growth opportunities. enhanced skills development and greater levels of investment.Figure 1. home to around 700 million prospective consumers. But India could increase its economic output further by establishing supply-side conditions to harness the new waves of growth. On the current trajectory. in the case of low-carbon economy.current and alternative trajectories 620 610 600 590 160 150 140 130 GDP. rising aspirations among consumers and a growing middle class.4 billion) of economic Employment (million) 13 580 . Accenture asked Oxford Economics. For example. and the policy and organizational actions that can help ignite that growth. Indian economic output is expected to grow from Rs 67 trillion (US$1. This analysis provides a unique insight into the alternative growth trajectories open to the Indian economy. in the case of emerging markets surge. current trajectory. an additional Rs 11 trillion (US$244. India’s domestic consumption will likely serve as a critical engine of growth for the nation’s economy. to model the potential future impact on GDP and employment levels of these trends in the Indian economy. in which various supply- side factors were adjusted to capture additional output and employment potential from the relevant trend.2: India GDP .5 trillion) in 2010 to Rs 144 trillion (US$3. smart use of technology and clear channels to new markets. Indian rural markets. It also underlines the fact that while the three trends are largely inevitable. Oxford Economics then modeled an "alternative whole-economy trajectory". The current trajectory is based on the likely evolution of the three trends.

The government is striving to promote exports in sectors such as gems and jewellery.1) by 2020. driven by cost-competitiveness.000 28. The remaining 25 percent of new jobs would arise in the high-tech and green sectors. India is well positioned to reap the rewards of emerging-markets growth. machinery and transport equipment. Source: Oxford Economics output (Figure 1. These additional jobs have the potential to raise India’s per-capita GDP by Rs 7.6 Since all these industries are primarily labor intensive.5 million jobs by 2020 (Figure 1. owing to its relatively high degree of trade integration with other emerging markets and its existing comparative advantage.2). Seventy-five percent of the potential additional jobs would originate from India’s trade with other emergingmarkets. representing nearly an additional 37. and chemicals and pharmaceuticals to reach its target of US$500 billion overall exports by 2014. Our panel for the global new waves of growth project suggested that the growth in mobile banking and microfinance products.200. with an export target of US$70 billion. 14 .700 (US$171. compared with a 17 percent increase in the current trajectory. growth in exports will create spillover effects in terms of new jobs in these sectors.000 Note: Totals may be affected by rounding.5 India is also seeking to enhance trade in textiles and handicrafts. This trajectory would also boost employment levels over the next decade by 25 percent.300.3: Additional India employment in 2020 in alternative trajectory High-tech and green sectors Trade with emerging markets 9. with an export target of US$22 billion by 2014. in consumer and intermediary goods. combined with the country’s strategy of moving up the value chain.1). point to significant employment growth in technologies that support these sectors.Figure 1. India’s technology sector is known for its software exports and business process outsourcing. and agri-exports.

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The UN forecasts that India’s working-age population will grow by around 240 million people between 2010 and 2030—more so than in any other emerging economy.10 Critical success factors Technology can improve delivery and scope of education.9 And while India’s legacy of strong higher-education institutions has served the nation well.7 The number of people classified as being of retirement age in India (above the age of 60) is estimated to increase from 7½% at present to nearly 10% by 2020 (Figure 1. 45 in Western Europe and 48 in Japan. India’s talent advantage has come under increasing threat from other emerging economies. Making use of new technologies such as video conferencing. Yet. To harness these waves. the Philippines and Vietnam. compared with 37 in China and the United States. In 2020. 16 However. are developing talent pools with key skills. and one-third of India's population is younger than 15 years of age. according to the Planning Commission of India. the world will have 56. according to a survey by the Annual Status of Education Report (ASER) by Pratham.Figure 1. China.5 million fewer skilled workers than it needs by 2020. India must meet three growth imperatives that we call skilling at scale. healthy and productively employed workforce.4 percent of children in fifth standard could read a second standard level text. more is needed. educated. In 2010. an NGO. Only 12 percent of the country’s population enrolls in higher education. thereby standardizing the teaching tools and delivery methodology can help improve consistency of the quality of delivery to students. only 53. the average age in India will be only 29 years. compared with 30 percent in Brazil. Use of technology to deliver content. for instance.8 However. India could help fill the gap by developing a large. the country could expect to achieve a roughly 1 percentage point growth in GDP. Competing in higher-value sectors requires skilled talent pools. one teacher can reach out to more . it has made some progress in primary education. For example. compounded yearly. Revamping the Indian higher education system will require reforms in areas including course content (for example.5 percent of children in the 6-14 age group in rural India were enrolled in school.4). the quality of education is questionable. Brazil.4: India: Population by age 1200 1000 Aged 60+ 800 Million 600 400 200 0 2000 2004 2008 2012 2016 Aged 50-59 Aged 16-49 2020 Source: UN/Haver Analytics Key imperatives for growth Sustainable long-term growth is by no means guaranteed for India—because the new waves of growth will present unfamiliar challenges and opportunities. 96. 75 percent in Russia and 82 percent in the United States. If India adopts policies that enable the working-age population to be productively employed. To that end. including Englishlanguage capabilities. 23 percent in China. financial inclusion and healthcare for all. Skilling at scale Nearly one-fifth of the world’s population lives in India. vocational training and problem solving) and assessment of educational effectiveness.

The programme aims to bring basic banking services to 73. with just 13 percent and 2 percent of the population owning the respective products. Tapping into the expertise of retired citizens can help solve the problem of India’s teacher shortage while keeping retirees economically active. disadvantaged and low-income groups.517 61. the government and the Indian Banks’ Association launched a nationwide programme called Swabhimaan in February 2011.442 in 2010. However. But banks still have difficulty reaching the poor. both of which require banking facilities.11 Penetration of debit and credit cards is also low.Figure 1.000 or more by March 2012. Businesses can work with government and academia to broaden access to quality primary education. Only about 57 percent of the population has savings accounts and only about 10 percent has life insurance.027 in 2010 (Figure 1.5). As India’s rural economy shifts toward more commercialized agriculture and non-agricultural activities.000 unbanked Indian villages with a population of 2. Recent initiatives such as the UID present an enormous opportunity to spread financial services across India by helping poor residents easily 17 . Technology can also be used to improve student assessment and benchmarking as well as support self-paced learning. Technological advancements (including ATMs and Internet and mobile banking) have reduced the need for banks to be physically close to their customers and have made banking accessible and affordable for many urban non-poor residents across the country. this enterprising rural population will need access to cheaper credit. including children in farflung regions. Stakeholders can collaborate to co-create skills.027 62. the number of rural bank branches have increased from 60. To address the need for financial inclusion. It hinges on ensuring access to banking and financial services at affordable costs to India’s vast unbanked. 2006-2010 64.567 in 2006 to only 64. Critical success factors Technology can drive financial access and affordability.170 2006 2007 2008 2009 2010 Source: Economic Survey of India students. In higher education. enhance the capacity of tertiary education and improve the design and delivery of vocational curricula.5: Rural bank branches.356 60. Financial inclusion Financial inclusion is a key priority of the Indian government and is expected to drive growth for India.12 These figures indicate growth potential for financial services.13 It is expected to increase the demand for credit among the millions of small farmers and rural artisans who will gain access to banking facilities. technology can enable professors from reputed Indian and foreign universities impart high-quality skills through guest lectures. The number of total bank branches in India expanded from around 133.467 60.381 in 2006 to around 160.

2 1. In addition.9 0. By partnering with local organizations. These local partners could include players in the organized sector. India establish their identity to consume banking and financial products.6: India’s public health spending.8 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2000 1500 1000 500 0 Source: Oxford Economics / MoF.4 1. along the lines of ITC’s e-Choupal model.15 Public healthcare spending in India is also among the lowest in the world.3 % of GDP 1. And most advanced medical technology and hospitals are located in India’s urban areas. not just those able to pay. India’s average life expectancy rose from 59 to 65 in the last two decades and is expected to rise to 68 by 2020. such as the postal service. New delivery channels can reach untapped customers. improving access to primary care. 2002-2020 3500 3000 2500 1.0 0.Figure 1. Reserve Bank of India (RBI) revised its mobilebanking policies to enable customers to conduct lower-value transactions. As just one example. while the World Health Organization norm is 1:300. ICICI Lombard (the insurance arm of ICICI Bank) has joined hands with ITC to provide a comprehensive suite of general insurance products to farmers. the bed-to-population ratio in India is 1:1000. banks can expand their outreach profitably.1 Rupee 1. 18 . Efforts must be made towards preventing diseases.14 Banking and technology players can collaborate to tap local talent in rural areas and invest in their training and capacity building. increasing and improving the quality of the country’s pool of medical manpower and incentivizing the private sector to invest in capacity building. or unorganized ones. India also has a serious shortage of doctors and nurses. For instance. such as the local kirana (grocery) shops. % of GDP India’s healthcare sector requires major reforms to make personalized healthcare available to all. social and physical wellbeing of the growing elderly segment of India’s population.16 Ensuring timely access to healthcare for this age cohort will be critical. regardless of where patients live (see “India’s ageing population: challenge or opportunity?”). Rs billion Healthcare for all India faces serious deficits in its healthcare infrastructure. in rural areas. Mobile banking can further increase penetration even in rural areas. As a result. banks will be able to scale up their branch-less banking deployments and reach out to a wider population at a lower cost. For instance.5 1. policy makers will need to adopt measures that ensure the financial. government hospitals provide inadequate services. Local workers can be a valuable source of ideas for developing new product and services tailored to local needs.

thanks to household income increases.5 percent of GDP (Figure 1. the insurance reach is bound to grow from the present meager 2 percent to 20 percent. plans to set up 2.6). Results are quicker recovery and low costs.000 hospitals across rural India in five years.20 Critical success factors Technology can help deliver quality patient care consistently. at an investment of Rs 1. with the opening up of the sector to private participation.A number of hospitals are moving to address the situation—entering tier II and III cities as well as rural areas to expand the reach of their services.5 trillion (US$77.17 The Indian healthcare sector is poised to become a US$280 billion industry by 2020. For example. private domestic investments and longer life expectancy. Technology is also improving quality of nursing communication systems. Inclusive healthcare models are required. For example. the biggest challenge is to ensure effective coverage while keeping it affordable.6-2 million (around US$40. government healthcare outlays. a venture spearheaded by former civil servants.175 hospitals by April 2011. In India. launched in late 2007. where more than half of the population does not have consistent access to basic healthcare. Entrepreneurs in India are developing new tools and techniques that use resources sparingly while still improving outcomes. remote diagnosis and telemedicine.18 Oxford Economics expects overall spending to rise to about Rs 3. people can find information about treatment and diseases more easily than ever.7 billion) but remain below 1. instead of adopting expensive equipment whose costs do not justify the benefits. Especially with rising disposable incomes and the highest population being the earning age group of 15-59 years. cardiac surgery technique pioneered by Wockhardt Hospitals in India causes little pain and does not require general anesthesia or blood thinners. with spending on health estimated to grow 14 percent annually. New business models such as managed healthcare will also emerge. Thanks to new technology. The health insurance sector is also witnessing renewed enthusiasm.000) per bed. Rashtriya Swasthya Bima Yojana (India’s national health insurance programme). Glocal Healthcare Systems.19 This will fuel demand for higher-quality care and greater professionalism in the insurance industry.21 19 . patient monitoring devices. had enrolled nearly 23 million families and 8.

Higher disposable incomes in turn boost consumption. Formal retirement schemes in India thus remain underdeveloped and cover only about 13 percent of the country’s workforce. reflecting the slower rate of ageing in the Indian population. The implications of the shifting age structure in India come to light when the Oxford Economics model compares the baseline with an “alternative reality” (Figure 1. could create a virtuous cycle. (That is. Implications for government India’s expanding over-60 population poses an acute challenge for the Indian government.8). This assumes that the population above retirement age remains a constant share of the overall population.5 trillion (US$77. Current social-welfare schemes in India were designed to serve a select and much smaller over-60 population. a larger over-60 population will further strain India’s already stretched public-healthcare system. While the increase in India’s dependency ratio will be significantly less than the increase in the United States or Europe. Consumer-goods companies can also seize opportunities presented by ageing—by developing products that accommodate older people’s changing physiological needs. the over-60 population and total population are lower than in the actual baseline forecast. Population projections by Oxford Economics indicate that the old-age dependency ratio in India will rise from its current level of 12 percent to 15. based on an expected supply-side accommodation to these trends.1% higher. Expanding retirement and pension schemes to a larger percentage of the population will be critical.9).India’s ageing population: Challenge or opportunity? The hype surrounding India’s demographic dividend makes it easy to overlook India’s other demographic shift – the rise in the number of individuals aged over 60. drawing on individual defined contribution retirement accounts through bank and postoffice networks. combined with productivity-enhancing human-capital investment. Participation in the scheme will likely increase as incomes rise and individuals start planning for retirement. Increasing the number of older people in the workforce. In addition. 20 .) Workforceparticipation rates among this older age group are also assumed not to change. specifically. Moreover.7 billion) and to remain below 1. how to effectively account for this population when designing social-support and public-healthcare schemes. since coverage of public-health services is currently low. this trend will nevertheless affect businesses and government. While the ageing trend will support economic growth and employment.6% higher by the end of 2020. These two changes would enable older people to increase their disposable income as they become more productive and to stay financially independent for a longer time. will place new pressures on government spending and will affect India’s growth trajectory. This is a smaller impact than in the Europe and the US. The baseline trajectory incorporates a number of positive and negative effects of trends in population ageing. The Indian government extended the New Pension System (NPS) from the public to the private sector in 2009. Demand for private healthcare and pharmaceuticals will increase. It will demand new business models that better integrate older workers into the Indian workforce. additional growth can be realized through actions to raise laborparticipation rates and increase productivity. Research also suggests that productivity improvements are a source of long-term economic growth. These trends will create new opportunities for financial services and insurance providers. high compared to Europe and the US. Oxford Economics’ projection expects overall spending on public healthcare to rise to about Rs 3. ICICI Bank is offering NPS accounts.5 percent of GDP (Figure 1. the tourism industry could benefit by serving older and financially well off consumers willing to spend more on travel. Access to suitable financial services will also become increasingly important as people plan for longer lives. employment in the baseline scenario is 1. Compared to the ‘alternative reality’. This rate has been stable over the past few years. including impacts on consumption and labor markets. while GDP is 1. For example. Implications for business If businesses in India begin preparing now. Acting now to define the right policies and strategies to address India’s ageing population will help government and business convert this potential challenge into a valuable opportunity.5 percent by 2020 (Figure 1. The participation rate of over-60s is estimated at around 30 percent.7). they can capture opportunities presented by India’s ageing population.

9: Budgetary implications of population ageing Difference between baseline and 'alternative reality' (% of GDP) 1.6 1.dependency ratios (%) 18 16 14 12 10 8 6 4 2 0 2005 2008 2011 2014 2017 2020 Old age dependency ratio (% of working age) Retiree dependency ratio (% of labour force) Source: UN/Haver Analytics/Oxford Economics Figure 1.0 0.Figure 1.8: Economic implications of population ageing % difference between baseline and 'alternative reality' 1.4 0.5 0.8 1.0 0.9 0.4 1.2 1.2 0.7 0.3 0.8 0.2 0.1 0.6 0.6 0.4 0.7: India .8 0.0 2010 2011 2012 2013 2014 2015 2016 2017 2016 2017 2020 Healthcare Pensions Source: Oxford Economics 21 .0 2010 2011 2012 2013 2014 2015 2016 2017 2016 2017 2020 Employment GDP Source: Oxford Economics Figure 1.

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The emergingmarkets surge


The emerging-markets surge

Chapter summary
Areas to watch
• Service exports • Low-cost business models • Infrastructure • The emerging-market middle class • Medical tourism

Creating the conditions for success
• Build new bridges to the emerging world • Develop sensitivity and respect for other cultures • Drive efficiencies in manufacturing

Organizational imperatives

The emergingmarkets surge
Impact on growth and jobs
• Rs 7 trillion (US$155.8 billion) added to GDP by 2020 • 4.9 percent above the current trajectory by 2020 • 28.2 million additional jobs by 2020

• Use India as the learning laboratory • Be authentically local • Hire local talent • Develop mutually beneficial partnerships • Design a flexible international operating model


Assessing the trend: India’s emerging-market opportunity
In 2009, emerging markets accounted for nearly 50 percent of global GDP at purchasing power parity, up from 37 percent in 1990. Their share of global output is set to rise to 65 percent by 2030 (Figure 2.1). The ascendancy of emerging-market power is mirrored in the corporate arena, with emergingmarket multinationals now making up 95 of the Fortune Global 500, compared with just 20 in 1995. The IMF forecasts that the total GDP of emerging markets could overtake that of the developed economies as early as 2014. The most striking trend is the rapid growth in intraregional trade. While global trade and Asia’s trade with economies outside the region have doubled since 2000, intra-Asian trade has tripled. Regional trade involving emerging Asia, in particular, has increased even faster. Asian economies accounted for 35 percent of world exports in 2009, compared with 25

percent 10 years earlier. The share of intraregional exports rose to 55 percent from 45 percent over the same period. The World Bank estimates that foreign direct investment (FDI) outflows from developing nations topped US$210 billion in 2010, up from the previous record of US$207 billion in 2008. Nearly two-thirds of this investment came from Brazil, Russia, India and China—and most of it went to other developing nations. The fast-expanding ties between emerging economies have helped foster the recent global economic recovery. The BRICS (Brazil, Russia, India, China and South Africa) economies’ decision to trade in local currencies shows their confidence and willingness to boost intra-BRICS trade. At US$4.6 trillion, the five BRICS countries account for almost 15 percent of global trade volume, and trade among them is about US$230 billion a year.22 No longer viewed as merely lowcost production locations, emerging markets are becoming important sources of new consumer demand. The

surge in emerging-markets growth is being driven by the twin dynamics of a burgeoning middle class of consumers and rapid urbanization. Estimates show that the number of households in emerging markets with annual incomes above US$5,000 is set to rise from 320 million in 2009 to 400 million by 2014. The total urban population of the developing world is expected to increase from 2.6 billion in 2010 to nearly 4 billion in 2030.23 India is at the forefront of the surge in emerging-markets growth. Over the last decade, India’s exports to emerging markets as a share of total exports have increased from 35 percent in 2000 to 52 percent in 2010.24 India’s imports to emerging markets as a share of total imports over the same period increased from 51 percent to 59 percent. Share of developed economies as export and import partners with India has decreased, while share of emerging economies has risen (Figures 2.1 through 2.4). For instance, share of the United States as an export partner decreased from 18 percent in 2004 to 10.9 percent in 2010, while the United


1: Share of global GDP (US$ trillion at 2005 prices and PPP) 160 140 120 100 80 60 40 20 0 37% 63% 62% 52% 38% 43% 35% 48% 57% 65% Emerging economies Developed economies 1990 2000 2010 2020f 2030f Source: Oxford Economics 26 .9 percent in the same period.2 percent to 10.4 percent to 5.8 percent during those same years.6 percent in 2004 to 6.9 percent above the current trajectory (Figure 2. an increase of 4. Companies in India are vying for their share of the pie. Businesses that ignore trade with emerging markets lose a valuable opportunity.6). Similarly. and its share as an import partner expanded from 5.5 percent in 2010. According to our research and analysis. China’s share as an export partner increased from 4. In addition. Nigeria. services. South Africa and Bangladesh. the emerging-markets surge could add about 28. Figure 2. a focus on emergingmarket middle class and medical tourism could enhance India’s GDP by Rs 7 trillion (US$155.States’ share as an import partner shrank from 6. infrastructure development. looking beyond Brazil and China and seeking growth in countries such as Indonesia. lowcost business models. Moreover.2 million Indian jobs by 2020.8 billion) by 2020. their own economies miss out on the productivity benefits that arise from trade.

8% 2.0% 2007 9.6% 2007 9.4% 0.1% 4.0% 3.0% 2.0% 4.7% 4.Figure 2. Russia & India Figure 2.6% 3.7% 4.6% 3.5% 4.0% 27 .4% 4.4% 4.2% 3.6% 3.7% 3.4% 10.9% 6.4% 3.0% 18.1% 3.3% 3.4: India’s Top 10 Commodity Export Partners (as a percentage of total exports) Figure 2.0% 1.9% 3.5% 14.7% 2.9% 6.2% 2.0% 4.8% 5.3% 4.1% 4.7% 2010 13.1% China UAE Saudi Arabia USA Switzerland Australia Iran Germany Indonesia Korea Republic (South) Source: CMIE 2004 5.1% 2.3% 4.1% 2.0% 1.2% 6.3: India .0% 4.5: India’s Top 10 Commodity Import Partners (as a percentage of total imports) 2004 UAE USA China Hong Kong Singapore Netherlands UK Germany Saudi Arabia France Source: CMIE 8.8% 6.2: BRICs .2% 3.6% 5.6% 0.5% 3.Trade with emerging economies % (Exports/imports to emerging economies as % of total exports/imports) 50 48 46 44 42 40 38 36 34 32 30 1995 1997 1999 2001 2003 2005 2007 2009 2011 Exports Unweighted average of measures for China.0% 3.Trade with emerging economies % (Exports/imports to emerging economies as % of total exports/imports) 65 Imports 60 55 50 45 40 35 30 Exports 1995 1997 1999 2001 2003 Imports 2005 2007 2009 2011 Source: Haver Analytics / IMF DOTS Source: Haver Analytics / IMF DOTS Figure 2.8% 2.9% 5.8% 4.9% 5. Brazil.6% 2010 10.7% 7.2% 2.9% 6.3% 2.3% 2.4% 4.

After gaining a foothold in the domestic market.27 Service exports India has proved its mettle in the services industry. Latin America and Asia Pacific. Indian information technology (IT) companies are extending their reach in Africa. and has recruited 600 associates locally for this new operation.Areas to watch Spurred by the rising middle class and rapid urbanization. which GE now also sells in developed markets. a fast-growing Indian financial services group. providing banking facilities to Indians settled abroad. India is a highly attractive business process outsourcing (BPO) services destination.25 Indian telecommunication service providers have also extended themselves into other emerging markets. Indian financial services players are gradually spreading their wings in other emerging markets as well.2 percent to the country’s GDP. entered the African market through its US$9 billion acquisition of Kuwait-based Mobile Telecommunications Co. Indian companies are making inroads in emerging markets by replicating tested homegrown business models across sectors such as services. is opening branches in China. Latin America and with some boutique houses in Europe.'s assets in the continent. GE Healthcare. which have significantly expanded advisory operations in India over the past decade. with the sector contributing about 55. For instance. for instance. For instance. Bharti Airtel is now a major player in 16 African nations. For example. Central Bank of India (CBI). Their goal is to counter competition from global banks. Indian businesses are experimenting with scaling strategies. Tanzania and Mozambique.26 Smaller Indian investment banks have started setting up joint ventures and alliances with counterparts in other emerging economies. Edelweiss. India has emerged as the laboratory for not just Indian companies but also multinationals experimenting with low-cost business models in India. a Mumbaibased public-sector bank. the company opened centers in seven African countries. 28 . for instance. From manufacturing the cheapest car in the world (Tata’s Nano) to providing low-cost mobile handsets. has ties in South Africa. more than 250 Fortune 500 companies have their BPO units in India. consumer goods and infrastructure. Bhutan. Bharti Airtel. Tech Mahindra recently started BPO operations in the Philippines Low-cost business models To reach out to India’s low-income and geographically remote populations. Last year. has manufactured affordable advanced cardiac care and electrocardiograph (ECG) machines in India.

with the opening of the new terminal at Istanbul Sabia Gokcen International Airport. Latin America. are stepping up their expansion efforts as well. while Merck will bring its clinical and product-registration expertise as well as global marketing footprint to the partnership. called innovative branded generics.32 GMR recently also won the bid to construct the US$360-million airport in Male. To illustrate.. acquiring design skills and building strong balance sheets to support projects in other emerging markets.Indian companies are now looking to export these low-cost business models in other emerging markets. the Indian arm of the American automobile manufacturer Ford Motor Company. For example. GMR Group became the first Indian company to operate an airport abroad. in April 2011. Sun Pharmaceutical. has started shipping diesel and petrol engines to Thailand and the fully built Figo small car to South Africa. the second-largest drug maker in the US. Under the agreement. the Middle East and Africa. defeating the Aeroport De Paris (which operates airports in the Paris region. For instance. as well as to support industries that supply materials for constructing infrastructure. which enable these companies to develop low-cost but high-quality products. including Charles de Gaulle).28 India provides multinational companies in industries as diverse as automobile manufacturing and mobile handsets with cheap but high-quality labor and raw materials. entered into a joint venture with Merck & Co. not new to emerging markets.31 Infrastructure With increasing urbanization across emerging markets. For example. in the drug markets of Asia Pacific. governments in some of these countries are investing to develop infrastructure assets such as mobile communications and transportation. Japan’s Yamaha Motor plans to expand capacity and export motorcycles made in India to Africa and South America. Some Indian infrastructure companies are seizing advantage of this opportunity—scaling up their operations. Sun Pharmaceutical will focus on developing and manufacturing products. The venture’s goal is to develop. the market leader in India’s two-wheeler industry.33 29 . Bajaj Auto. Asia and Latin America. recently topped one million units in exports of its vehicles. The company has a presence in more than 36 countries in emerging markets such as Africa.30 Indian pharmaceutical players.29 And Ford India. manufacture and commercialize new formulations. Eastern Europe. India’s largest drug maker by market capitalization.

An ecosystem that includes several hospitals. Godrej has seized advantage of this opportunity. It also creates enormous potential for global consumer markets.36 Medical tourism India is gaining popularity as a global destination for medical tourism. In 2008. The sizeable population of Indians in Africa gives Indian companies an advantage over global competitors on the African continent. purchasing Nigerian personal-care products maker Tura in 2010 for around US$33 million and buying hair-care brands Rapidol and Kinky in South Africa. India receives more than 100.35 African consumer spending is expected to reach US$1. The World Bank estimates that the global middle class will grow from 430 million in 2000 to 1. driven primarily by the surge in emerging economies. In 2000. places culturally similar to India.000 such patients travelled to India and spent US$997 million on treatments.The emerging-markets middle class The middle class is growing in emerging-market economies. which educate local residents about the medical facilities available in India. watchmaker Titan Industries decided to focus on 10 countries. as people emerge from poverty thanks to their nations’ rapid economic growth. such as Middle East Asia and Southeast Asia. Saudi Arabia. Singapore. including Dubai. These hospitals often have facilitation centers in emerging markets. developing countries were home to 56 percent of the global middle class. Sri Lanka and Vietnam. Most such companies and retailers are focusing on markets that have many nonresident Indians. The geographic distribution is striking.38 30 . while the number of households in Africa with discretionary income will rise by 50 percent to 128 million over the same period. Currently. The reason: treatment costs can be substantially lower than in neighboring medical-tourism destinations such as Singapore and Thailand.15 billion in 2030. chemists and freelance agents educates. despite having a distribution network across 26 Asian countries.34 Indian consumer goods companies seek a share in these fast-growing consumer markets. but by 2030 that figure is expected to reach 93 percent. The medical tourism business is estimated to be growing by 40 percent year-on-year.37 Most medical tourists treated by private hospitals in India come from South Asian Association for Regional Cooperation (SAARC) countries. The expansion of this middle class provides competition for labor and other resources.000 foreign patients a year.4 trillion by 2020. about 600. Malaysia. facilitates and ferries medical tourists to India from across the world. Africa thus presents new growth avenues for cash-rich Indian makers of personal-care products such as soaps and shampoos who face rising costs and fierce competition at home. In 2010. and from Middle East and Africa.

current trajectory (right scale) 610 600 590 580 110 100 90 80 70 60 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 560 550 540 530 520 510 500 490 2020 Source: Oxford Economics Employment (million) 31 570 GDP (Rs trillion) . alternative trajectory (right scale) Employment. by embracing the spillover effects. but the econometric research finds that trade with emerging markets has the potential to stimulate maximum employment as new demand is created. India has the potential to exploit its existing advantage in consumer and intermediate goods. owing in part to its high degree of integration in emerging market trade (Figure 2. Concerns are often expressed that opening up trade threatens domestic jobs. current trajectory. an increase of 4.8 billion). trade with emerging markets could boost India’s GDP by Rs7 trillion (US$155. constant 2010 prices (left scale) GDP. which is driven by cost competitiveness relative to developed economies.6). constant 2010 prices (left scale) Employment. raising 2020 employment levels by 28. increment in alternative trajectory.6: Potential of interventions to stimulate the emerging-markets surge 150 140 130 120 GDP.9 percent above the current trajectory by 2020. To assess the impact of trade with emerging markets on Indian economy. Oxford Economics took the novel approach of including the positive spillover effects of trade (such as knowledge transfers and innovation).Creating growth through the emerging-markets surge The econometric analysis by Oxford economics shows that.2 million in India. Figure 2.

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which came into force in 2006. such as restrictions on trade and investment. Trimex Sands. while GVK Power and Infrastructure will spend US$4-$5 billion over the next several years to build airport terminals in the city of Yogyakarta and on the island of Bali. and cultural and social differences affecting consumer demand. driven by economic growth and access expansion. by 2015. access to emerging markets is often hindered by various factors. In February 2011. Bilateral and regional trade The 16th SAARC summit. inadequate infrastructure or distribution systems. labor pools and aid extensions. terming it a "big step forward" for increasing trade within the region.40 These moves will help countries harness significant unutilized complementarities in energy endowments—gas. part of the Trimex Group. resolved to increase intraregional connectivity. Indian companies have already started benefiting from these agreements. economies must open trade routes to those markets through international agreements and business relationships as well as uncover and strengthen areas of comparative advantage. for instance. enhance energy cooperation and expedite implementation of tradefacilitation measures. They can also deepen their economies’ integration with regional trade areas. India recently signed agreements with Malaysia and Indonesia to increase trade to US$15 billion and US$25 billion. The ASEAN-India Trade in Goods agreement. will further increase the opportunity costs of keeping national energy systems isolated. Increasing energy demand. hydropower. To capitalize on growth in emerging markets. Greater intraregional connectivity allows increased transport asset utilization. created the world’s largest free-trade area by population.Creating the conditions for success Emerging economies present immense long-term growth potential for businesses operating inside and outside these markets. While trade under the South Asia Free Trade Agreement (SAFTA). coal —within a region and between the region and its neighbors. agreements can play an important role in freeing up these flows. Economies can further foster regional economic cooperation by forging links between regions’ investments. India urged all member-states to ratify the SAARC Agreement on Trade in Services. which lowers costs and tariffs for participating countries through improved port systems and better shipping services. the SAARC agreement has the 33 .8 billion people. Resilience to global shocks will be enhanced if intraregional trade and financial flows are increased. crossed US$1. Recent developments augur well for accelerating regional cooperation in South Asia. held in Bhutan in April 2010. trade.39 Build new bridges to the emerging world Our analysis highlights the importance of economies’ maintaining momentum toward openness in trade and investment flows. respectively. by liberalizing tariffs on over 90 percent of products traded between the regions. plans to establish a titanium plant in Indonesia at an estimated cost of over US$800 million. tourism. However. bringing together 1.2 billion.

One global brand that has adapted to local culture and tastes is US fast-food chain McDonald’s Corporation. Businesses 34 . this traditional strength also presents a new challenge. will greatly benefit India and the region. As one of our panelists put it. however. India will need to build up its economy’s manufacturing strength. India’s manufacturing sector has grown in size and ranks among the top 10 in the world. However. institutions. protocol. but more than 40 percent of its industrial output is produced by small and medium enterprises. Big Macs. expressed as manufacturing value added (MVA) per capita. The promise of the world’s largest working-age population is undermined by one of the lowest labor-productivity rates among fast-growing emerging markets. Indian companies must understand and respect those markets’ cultures.potential to grow trade further. in terms of the value of its manufactured output. In many areas. Around 84 percent Develop sensitivity and respect for other cultures To succeed in other emerging markets. This cooperation is crucial to enabling peace and prosperity for countries in the region as well as the world at large. such as samosas. where 80 percent of people do not eat beef and consider cows sacred. “Regional cooperation between Asian countries. non-beef meat eaters can get a Maharaja Mac made with lamb or chicken at a McDonald’s restaurant. is the lowest among fast-growing emerging markets. However. India may have some worldclass clusters of excellence (such as automotives and pharmaceuticals). As companies grow across geographic and cultural borders and move up the value chain. In New Delhi. where most citizens are vegetarian. communication styles and negotiation approaches. rather than taking a one-size-fits-all approach. Many organizations are now providing staff with language lessons and cultural-sensitivity training to address issues such as etiquette.41 Drive efficiencies In manufacturing India aims to double its exports over the next three years to reach an export level of US$450 billion by 2013-2014. the country’s level of industrialization. offers vegetarian burgers and other Indian dishes. they will face a more diverse set of consumers. growth has been founded on the exploitation of historical and cultural ties between geographies.” must monitor consumers’ changing preferences and tailor their offerings to local cultural norms.42 To achieve this ambitious target. McDonald’s restaurant in Gujarat. for instance—McDonald’s flagship offering—would never succeed in India. both bilateral and multilateral for trade. which has adapted its products to local tastes. laws and business practices.

a British publishing company.of India’s manufacturing employment is estimated to be in firms with fewer than 50 workers. Savvy companies embed their innovation activities into the local R&D and consumer environment.44 Many multinational companies are also eyeing India as a laboratory for testing business models and product offerings with which they are considering serving other emerging markets. hoping to replicate this model to expand its global footprint. limited earnings and few growth prospects. including poor infrastructure and rigid labor laws. still in the experimental stage. Pearson.46 Similarly. because many parts of Angola could not support a proper dealer and service-centre network. for instance. For example. Indian companies must understand local consumers and customize product design. low productivity. Organizational imperatives Use India as a learning laboratory A number of Indian companies are using their knowledge of how to operate in India to strengthen their operations in other emerging countries.47 Be authentically local To create and develop products for other emerging economies. the French cosmetics giant. value engineering and marketing strategies to local preferences and priorities. 35 . it will emerge as a formidable local player and will have a model it can replicate in other emerging countries. has developed products in India for Indians and then launched them in other emerging markets.43 Small firms often get caught in a vicious cycle of insufficient access to capital.45 Google also plans to test its “offline” model in India before replicating it in other emerging markets. L'Oréal. Bajaj Auto trained roadside mechanics in Angola to fix their bikes. has entered the education market in India. working in tandem with industry peers and policymakers. government regulations and shortage of trained teachers. The offline model. old technologies. Few companies have managed to make good money in the vocational training and education business in India. Larger enterprises—those operating in the formal sector where productivity and wages tend to be relatively high—also face barriers to this huge market opportunity. pricing. The company is establishing a new R&D hub in India to develop products in India that could be exported to other emerging countries. owing to factors such as scarcity of land inside cities. involves putting more salespeople on the street and using call-centre agents to help small firms go online and use Google’s advertising platform. Pearson believes that if it can make a profit in India.

rural electrification. the objective was to get closer to its Indian-origin customers in the Middle East. thus enabling them to enter the mainstream workforce. almost 90 percent of Dabur’s customers are locals—not the Indian diaspora. of whom 49 have been employed as operators with Tata Steel. Today. sub-stations. Larsen & Toubro (L&T) is another case in point. For instance. it also created new products exclusively for these markets. programme in South Africa is a good example of the kind of investments Indian companies are making towards skill development and creation of jobs in other markets. power distribution and industrial electrification. The TSKZN Learnership programme has produced two batches of graduates so far. consumer preferences. procurement and construction of high voltage transmission lines and also the associated sub-stations. when Dabur set up its international arm. Equally important. while SLEMCO benefited from the vast experience that ABG got to this venture. The two companies have agreed to collaborate on turnkey execution of power transmission lines. The company signed an agreement with South Africa-based Befula Investments for a joint venture to develop power transmission and distribution projects in South Africa.50 Hire local talent By recruiting local talent in emerging markets. The programme focuses on imparting training and skills to local unemployed students with basic education and no work experience in the uMhlathuze district. the Tata Steel KZN (TSKZN) Learnership Develop mutually beneficial partnerships Companies should partner with local organizations to source information.49 Through this partnership ABG Shipyard Company got access to the rich natural resources. For instance. Dabur International. Expat executives usually command higher salaries and need time to absorb the local culture. an area with over 300 million tons of proven reserves of the valuable rock. L&T will be responsible for the design and engineering of the projects. To do so. the company not only modified existing products’ formulations. companies build credibility while also deepening their understanding of local markets so they can tailor their offerings accordingly. Local partners offer deep expertise and valuable insights into market trends.48 Company (SLEMCO) to mine bauxite in northern Sierra Leone in West Africa. companies save money.5 percent stake in the venture.Businesses in India are increasingly taking this approach as they expand their base in other emerging markets. The joint venture company will look at the engineering. and procurement and distribution channels. develop new products and increase distribution reach. in 2001. For instance. L&T will have a 72. Indian ABG Shipyard Company partnered with the Sierra Leone Exploration Mining 36 . government regulations. The company’s closer proximity to nonIndian consumers enabled it to adapt its products to locals’ needs and aspirations.

adaptability and entrepreneurial zeal. products tailored to consumer needs and constraints. for instance. If they can avoid stifling these abilities in the quest for scale. The company has already charted a clear roadmap—“One Africa”—for scaling its Africa operations. Bharti easily established itself in Africa by acquiring Zain Telecom's African operations.Design a flexible international operating model Companies aspiring to do business in emerging markets must determine how to achieve growth on a regional scale while maintaining the local focus that made them successful initially. Bharti realized the business model that has emerged in the Indian telecom industry. Bharti Airtel. Similarly. 37 . The continent is home to almost 15 percent of the world's population but is one of the most underserved places on earth. can be replicated in other emerging markets. used its expertise in one emerging market – India – to tackle another – Africa. they will be well positioned to achieve—and sustain—greater growth in the future. Godrej group intends to strengthen its presence in emerging markets in Asia. After operating a volume-based business model in India. Companies cannot afford to lose sight of the skills and practices that helped them grow—such as deep local knowledge. affordability and inclusive growth. Africa and Latin America via three core product categories. based on volume. Surmounting this challenge requires flexible operating models that combine local knowledge and practices with regional functions and capabilities.

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The multitechnology future 39 .

8 percent above the current trajectory by 2020 • 10.The multi-technology future Chapter summary Areas to watch • Digital goods and services • Core technologies • Ancillary technologies • Convergent technologies • Technology-enabled business model Creating the conditions for success • Build digital literacy and skills • Create smart regulatory standards • Build on existing excellence and reputation Organizational imperatives The multitechnology future Impact on growth and jobs • INR4 trillion (US$90 billion) added to GDP by 2020 • 2.8 million additional jobs by 2020 • Embrace the cloud • Use technology to pursue polycentric innovation • Harness technology to serve customers’ needs • Share digital literacy • Create open innovation networks 40 .

The rapid spread of mobile phones to help farmers and fishermen become more efficient and improve their livelihoods is just one example.” New technologies bring not just new sources of demand but also whole new business and service models. with massive implications for productivity and opportunities for businesses and public-sector organizations. enabling innovation and productivity increases. It is connecting people and communities. As more Indians gain access to the Internet. As a result. especially with the introduction of 3G. New connection points arise daily as government funding and low-cost innovations – such as a US$35 touch-screen laptop developed in India – make purchasing computing hardware more feasible.2). 41 . Smaller Indian software firms are also making a mark as they shift focus to finding solutions for the domestic market instead of attempting to emulate products and ideas from the developed markets. In the last three years. India’s software product exports have reached a revenue level of US$1. The next revolution that can potentially supplement this is the Internet revolution. “The mobile revolution is credited with leapfrogging India’s growth in a myriad of ways. But with the traditional IT majors accounting for maximum share. Such developments are creating a fastpaced and competitive business ecosystem.52 Their goal is to muscle into the domestic business emerging from the manufacturing sector and other sources.1 and 3. poor and geographically remote populations are adopting technology and are willing to pay for products and services that satisfy their wants in a sustained manner. Internet penetration in India has increased exponentially over the last decade from zero broadband connections back in 2000 to more than 10 million connections in 2010. economic and social dynamics across the country will change dramatically.14 billion. The continuing spread of information and communication technologies is making those groups more accessible to companies than ever before (Figure 3. As technology costs continue to drop. including connecting the rural hinterland. with reduced time to market and the ever-present danger that businesses will miss out on market trends.Assessing the trend: The acceleration of everyday life The ICT revolution is catalyzing social and economic transformation in India. and improving standards of living and opportunities across the country. more than 125 start-up companies have been established in India.51 Falling costs are now complemented by reliable. easy-to-use interfaces. As one of our panelists stated. Indian IT players are competing aggressively with developed-world incumbents in a more interconnected landscape.

having already increased at almost a 70 percent compound rate over the last decade to reach close to 700 42 . as well as foster ancillary markets for related technologies and services. Finally.54 The hubs aim to design offerings that suit low-income and culturally diverse populations.000 thousands millions 400 300 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 6. Estimates by NASSCOM suggest that e-governance is a US$9 billion opportunity in India. it will also launch many new technology sectors. E-governance represents additional potential.53 Companies want lean and nimble innovation hubs in emerging markets that do not take the traditional “captive” route of owning all resources. Oxford Economics analysis illustrates that. Areas to watch As technologies mature and are brought to market. The world's largest biometric project.8 percent above the current trajectory.8 million jobs by 2020 (Figure 3. by investing in skills and widespread technology adoption to harness the technology trend. Sometimes growth stems from the convergence of one technology with another.000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: International Telecommunication Union & TRAI Source: International Telecommunication Union & TRAI India is also fast gaining credibility as a global R&D hub. India can boost its GDP by Rs 4 trillion (US$90 billion) by 2020.2). new technologies can enable new ways of doing business with existing products. UID will expand its footprint across several Indian states in 2011 and is slated to generate US$4 billion in new business by 2015.2: Fixed line phone subscriptions in India 12. Research reveals that Fortune 500 companies operate 63 captive R&D facilities in India. Mobile-phone subscriptions continue to grow rapidly. they offer a springboard for a major leap forward in almost every area of business operations.Figure 3.1: Mobile phone subscriptions in India 700 600 500 Figure 3.55 Other government and defense segments will also create sizeable opportunities in large systems integration projects for application services.000 10.000 2. Technology will not only boost performance efficiency and generate new growth opportunities for the economy. these hubs partner with local universities and start-ups to build scale and speed in taking cutting-edge ideas to market. Instead. One such mega project is the UID initiative. Managed services around IT infrastructure will open doors to application services as well. Digital goods and services Rising income levels and increasing levels of consumer awareness are driving demand for digital goods and services across India. a 2. The core technologies themselves will develop their own markets as they are adopted.000 4.000 8. These moves will also help create 10.

Large enterprises are testing the public cloud by initially moving less critical applications to it.8 billion. skyrocketing by almost 15 times from about 177.61 Pay-per-use models of software and storage infrastructure as a service based on cloud computing platforms are helping Indian businesses compete with financially stronger developedmarket rivals.59 Even traditional consumer-durables companies such as Videocon and Onida have launched their own mobile handsets. availability and disaster recovery to customers at affordable prices. growing at a 40 percent compounded rate.million. Recent research reveals that there are more than 200 mobilehandset brands available at retail outlets across the country.56 The mobile-handset and smartphone market is keeping pace and is expected to be worth US$8 billion by 2016. Spice.62 43 . The market has responded to the opportunity. from the current US$5. The market for cloud computing in India is expected to be worth US$360 million by 2014.58 New entrants like Micromax. Core technologies New technologies will open up significant opportunities for rapid growth. Small micro-finance institutions in India seeking to serve low-income populations are reducing their own operating costs by using the Mifos Cloud to manage their data.57 India’s young. notebook sales will outgrow desktop PC sales in India.000 in 2004-2005 to 2. the Mifos Cloud is managed through Amazon's hosting facilities and provides commercial-level security. Notebook sales have witnessed equally astounding growth over the past five years. And with the rollout of 3G mobile services. Launched by the Grameen Foundation. demand for smartphones will only accelerate in the coming years. Karbonn and G’Five have gained sizeable market share through their competitively priced models.5 million in 2009-2010. India’s massive small and medium (SME) business and consumer segments are the main drivers of cloud computing.60 Gartner predicts that by 2012. owing to its cost effectiveness. demand for skilled technicians who can build and repair this deluge of digital goods will almost certainly climb. with most of the demand coming from consumers as well as small and medium enterprises. The digital goods manufacturing sector in India will continue to enjoy robust growth driven by domestic and international demand. Moreover. urban citizens with high disposable incomes are increasingly demanding highend handsets.

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3 million petabytes over the next decade. the UID programme will try to forge links between citizens and services—improving access for excluded parts of the population. has captured attention because these products are economical.63 even bigger worry for governments as IT infrastructure supports critical national assets such as power grids. In addition. emergency communications systems. it identifies at-risk proprietary technologies and encourages open standards to cut down the risk of dependency on proprietary IT products. music. which rely on data-driven decision making.4 million in 2011. Convergent technologies The convergence of two or more different technology fields generates innovative solutions across industries. pictures. combating fraud and maximizing public services.000 petabytes (1 petabyte is about 1 million gigabytes) to 2. biotechnology combined with pharmacology.Large volumes of data. healthcare. mobile devices and cloud platforms. As the government looks to enhance public-service provision through e-governance. Private companies and government research agencies are genetically improving the quality of crops to create high-yielding hybrid Technology-enabled business models Indian businesses want to use technology to bridge the gap to the country’s massive rural markets. Security is an varieties. Companies that previously based decisions on managers’ past experience and business instincts will gradually move toward fact-based decision making. For example. Estimates suggest that information stored online in India will grow from current levels of 40. For instance. the National Bank for Agriculture and Rural Development (NABARD) has entered into a partnership for a one-year programme with international news agency Thomson Reuters' Indian subsidiary. and very little is known about the consumption patterns of most of them. which have stood outside companies’ reach because of poor infrastructure and lack of connectivity. Armed 45 . But with the availability of so much data.69 Meanwhile. commodity news and other relevant information to farmers through SMS in local vernacular languages. information technology and even agriculture has created vital opportunities. eco-friendly. The Indian biopharmaceuticals sector has been a particularly successful segment. productive and accessible to marginal and small farmers. estimated at US$50. The goal is to provide farmers in Tamil Nadu with real-time market information for a duration of one year for free. following patent expiry). up almost 16 percent over 2010. The policy also recommends identification of cyber-security threats and critical IT infrastructure vulnerabilities as key to developing a coordinated R&D effort focused on addressing deficiencies. The UID programme will make available huge volumes of consumer data that the government plans to analyze to improve efficiencies in collecting taxes. is the fastest growing segment in the biotechnology sector.68 Bio-agriculture can help tackle India’s food-shortage problems. security and privacy will become growing concerns. financial systems and air-traffic control networks. boasting revenues of US$1. and accounts for more than 80 percent of all cotton produced in India. and providing a safe. although nascent. is expected to receive a huge push owing to the UID programme.67 The bio-agriculture market segment in India. The service will deliver spot crop prices. the domestic market for bio-informatics.2 million.9 billion and growing at 12 percent.66 Indian biotechnology major Biocon’s biopharmaceuticals and chemical formulations business has been the main force behind its high profit and revenue growth. Technology will play a critical role in the inclusion of these people in India’s growth story. estimated at US$420 million. while telecom companies are examining usage patterns to market new plans and services to subscribers. Banks are already analyzing customer profiles to cross-sell other products. videos and even complete websites are increasingly being stored online for cost and efficiency reasons. Bt cotton is the best-known success story. telecom and financial services.64 India’s government is seeking to build its competency in business intelligence and analytics. Reuters Market Light. Biocon is also making a US$160 million investment in Malaysia for development of high-end biosimilars (officially approved new versions of innovator biopharmaceutical products. Forecasts suggest that the Indian business-intelligence technology market will generate revenues of US$65. efficient.70 The plan is to establish a national identification infrastructure through a biometric platform (iris and fingerprint scans) for the entire Indian population. India’s National Cyber Security Policy identifies indigenous development of IT goods as vital for fighting threats from imported high-tech products. The market for biofertilizers is expected to grow at almost 15 percent compound rate until 2012.65 Ancillary technologies Tech-savvy enterprises can now base key management decisions on large quantities of information—driving development of new services centered on analytics. The biopesticides and biofertilisers market. India has a billion-plus consumers. Businesses are already facing increased enterprise security risks coming from social networking sites. reliable infrastructure for public and private service provision. Business intelligence and analytics will be critical for companies in sectors such as retail.

Meanwhile.72 One of our panelists commented that “although at present microcredit products are more known. mobile-commerce solutions.73 46 . Some will even partner with companies outside the telecom value chain to tap the bottom of India’s population pyramid. MyDala and Koovs are growing quickly and attracting additional players into this segment. Companies will increasingly offer a range of services such as content aggregation and distribution. is collaborating with micro-finance institutions to implement mobile payments in the micro-credit sector. because they know when the demand and the prevailing market prices are high. SnapDeal. farmers stand a better chance of avoiding distress selling of their crops.” Recent estimates suggest that the market for mobile VAS will exceed US$4 billion by 2015.with such information. One such phenomenon that is rapidly gaining popularity in India is group-buying websites. the major breakthrough will be in micro-savings banking products using technology. Ventures like Taggle. mobile advertising and content management. India’s mobile-telecom revolution has sparked the emergence of companies offering a variety of value-added services (VAS).71 Technology is bringing to life whole new business models that previously would not have been profitable—or even possible. These sites bring customers together socially and harness groups’ bargaining power to negotiate large discounts on products. The Internet acts as an aggregator that benefits consumers and merchants alike. The introduction of 3G mobile services will accelerate the VAS market’s growth. Mobile-commerce company mCheck India. for example.

alternative trajectory (right scale) Employment.8 million by 2020 (Figure 3. by investing in skills and widespread technology adoption to harness the multi-technology trend. India can boost its GDP by Rs 4 trillion (US$90 billion) by 2020. current trajectory.8 percent above the current trajectory. Next generation technologies like mobility solutions. 2.3: Potential of interventions to stimulate the multi-technology future 150 140 130 120 GDP. targeted improvements in education and training policies for the high-tech sector. constant 2010 prices (left scale) Employment. cloud computing and analytics will not just create new sources of demand in India but will give birth to new business and service models. increment in alternative trajectory.3). The alternative trajectory incorporates the effect of sustained. constant 2010 prices (left scale) GDP. Figure 3. current trajectory (right scale) 610 600 590 580 110 100 90 80 70 60 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 560 550 540 530 520 510 500 490 2020 Source: Oxford Economics Employment (million) 47 570 GDP (Rs trillion) .Creating growth through the multi-technology future The econometric modeling by Oxford Economics illustrates that. This translates to a lift in employment levels by 10.

Intel provides technology training and a global platform for the initiative. Consider Hole-in-the-Wall Education. will raise an estimated US$555 million in 2011. and without instruction. children began browsing the Internet. investment and job creation. The goal is to build an entrepreneurial ecosystem in India. Indo-US Science and Technology Forum and Intel. Adoption of new technologies relies on regulation to provide stability for businesses and public services along with assurance of data privacy for consumers. Within hours of installation. while also supporting India’s solar-energy capacity-expansion plans. and the computers were connected to the Internet. The Indian government recently restructured its semiconductor policy to offer special fiscal incentives for the industry. a joint venture between Indian education major NIIT and the International Finance Corporation (a part of the World Bank Group). there were specially designed joysticks and buttons. Instead of a mouse and keyboard.76 48 .75 Incentivizing growth of the semiconductor sector will help India cement its position among leading IT and electronics hardware manufacturers. Build digital literacy and skills Availability of digital skills is vital to the growth of India’s hightech sector and overall economy. This creates a virtuous cycle in which higher productivity lowers production costs and prices.Creating the conditions for success India’s future workforce must fully embrace the digital world. The government is also establishing disincentives for non-renewable energy producers. enhancing consumption. The venture set up 23 outdoor computer kiosks in some of the poorest slums in India. The tax levied on export and manufacturing of coal. Monitors protruded through holes in the kiosk walls. where children never had access to a computer. providing concessions of up to 25 percent on capital expenditure to domestic manufacturers. effective in July 2010. The government plans to channel these funds to establish new electricity-transmission lines and clean-energy projects.74 Creating smart regulatory standards Systematically building industry standards can facilitate the rapid uptake of a new technology. Another example is the joint technology entrepreneurship programme between India’s Department of Science and Technology (DST). Widespread digital literacy is critical for amplifying technology’s impact on productivity and innovation across the wider economy.

Enrollments under Aadhaar have reached almost 6 million since the programme began in August 2010. peasants. For instance. Aadhaar is therefore paving the way to include small farmers. Another example could be the Rashtriya Swasthya Bima Yojana. If the UID data could be added to the chip mounted on the card. • Public-service delivery: Aadhaar will ensure that benefits reach the right beneficiaries in a predictable and timely manner. With health records stored against each UID. poor farmers and landless laborers often lack any kind of identification document. imprinting the UID number on students’ performance records will help prospective employers and educational institutions verify authenticity. • Health and education: Aadhaar numbers will help track health and education records across the country. India’s Ministry of Finance has recognized the Aadhaar number as an officially valid document to satisfy “Know Your Customer” norms for opening bank accounts. • Opportunities at the bottom of the pyramid: Having unique identities will promote financial inclusion for people at the bottom of the pyramid. a national identification infrastructure that will be established through a biometric platform for the entire Indian population. Aadhaar will make India a world leader in identification management and biometric technologies. Proving one’s identity—to get social aid and open bank accounts—can seem impossible for this marginalized section of the population. given the size and demographic complexity of its population. Empowered with bank accounts.UID: Inclusion through Technology The UID programme was conceptualized by the Planning Commission of India in 2006 to solve the identity problems facing the millions of rural Indian citizens. They can then develop instruments to help the poor invest in the economy and in their own financial futures. It will also deliver tremendous opportunities to businesses and the government. microentrepreneurs and poor women in the country’s organized monetary system. Only about 50 percent of India’s population today is covered by the four major identification programmes. who make up most of the 400 million Indians living below the poverty line. new enrollments will happen at the rate of 1 million every day. families below the poverty line could validate their identity to obtain governmentprovided grain at India’s fair-price shops. The Unique Identification Authority of India has undertaken Aadhaar. the poor can begin building up their savings and gain access to new forms of credit. Migrant workers. Meanwhile. Residents will not require any identification document.77 By the end of 2011. which provides families living below the poverty line with insurance coverage. Every beneficiary family is issued a biometric-enabled smart card containing their fingerprints and photographs. The technology would support implementation of the Right of Children to Free and Compulsory Education Act and monitoring of the mid-day meal scheme and other school programmes. Aadhaar will issue every resident a unique 12-digit identification number based on fingerprint and iris scans. as well as enable the poor to gain access to basic services through vouchers linked to their UID. hospitals will be able to track historical records of patients to provide accurate diagnosis and treatment. Financial institutions will have a more accurate picture of poor households’ cash-flow cycles and repayment capacities. improving these at-risk individuals’ access to education. wages under the National Rural Employment Guarantee Scheme could be transferred directly to a UID-linked bank account and withdrawn only through UID authentication. The system will help educators track school dropouts and migrant students.78 49 .

79 and will prove an advantage for companies seeking to engage in these new technology areas.81 Use technology to pursue polycentric innovation Multinational companies are pursuing “polycentric innovation”—choosing locations for innovation based on the markets served. Create open innovation networks Open innovation—whereby companies involve stakeholders such as suppliers. India’s largest mobile telecom operator. Bharti Airtel. They have nurtured capabilities in local auto-parts companies and OEMs. Although India has a strong IT talent pool. is an apt example. Major Indian IT companies can leverage their outsourcing experience to build viable cloud-computing and virtualization business models. minimize sunk costs and benefit from cuttingedge software.83 Harness technology to serve customers' needs Indian companies recognize the importance of putting the customer at the centre of their technology agendas. brings together scientists from across the world to collaborate on ways to hasten the drugdevelopment process.82 Share digital literacy Full integration of new technology requires a variety of skills in the workforce at a range of levels. Knowledge-sharing schemes such as mentoring. companies will have little choice but to shift to clouds. launched in 2008 by India’s Council of Scientific and Industrial Research (CSIR). the first in its industry. social networks and enterprise wikis can spread the necessary expertise cheaply and effectively as well as bridge generational gaps in working practices. India needs many more formal training institutions. Organizational imperatives Embrace the cloud Purchasing IT solutions as a service enables companies to enter new markets rapidly. from basic digital literacy to more advanced technical skills. In the pharmaceuticals and biotechnology fields.80 Nivio’s cloud-computing platform lets users store files online. They are analyzing customer needs before deciding what technology to deploy. Tata Docomo. The company recently launched a webbased live-chat feature.5-million-strong IT workforce will expand to almost 10 million over the next decade. 50 . have benefited from these stakeholders’ ideas—strengthening technological capabilities across the industry’s value chain. As more of India’s low-income consumers demand pay-per-use services. the telecom service provider. a wide gap exists in terms of other technical skills. a cloud solution intended to enable a single view of guests across group hotels and a single image of inventory so hotels can respond to customer needs consistently. Indian IT major Wipro recently launched the Wipro Hospitality Management Solution. Offering all these advantages. The telecom giant recently launched this service offering under the brand name of Airtel Online Desktop. India’s 2. whereby ideas originate in emerging markets before being sold into the developed world. However. The feature allows new and existing users to ask questions and provide feedback in real time.Build on the existing excellence and reputation India’s achievements in the IT services industry has provided it with a platform from which it can build capabilities in other new technologies. bioinformatics and robotics. which helps them justify technology investments to the shareholders. a different innovation hub for a different type of innovation for a different type of market. Automobile companies in India provide exceptional examples. has already signed an agreement to offer Nivio’s software solutions to its customers on a monthly rental basis. They are increasingly shifting idea incubation to locations like India to create relevant products for their emerging-market consumers. and in return. the Open Source Drug Discovery (OSDD) Consortium. and to share files during the sessions. for example. cloud computing will help Indian entrepreneurs and SMEs compete with larger organizations. rent applications and access the features of a desktop through a normal web browser—all at a price as affordable as cable TV. “Reverse innovation” is also on the rise. The government is trying to bridge that gap through skills-development programmes. vendors and customers in their innovation process—is attracting interest in India. such as cloud computing.

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The resource economy 53 .

waste and land management • Alternative fuels • Hybrid and electric vehicles Creating the conditions for success • Invest in next-generation technologies • Create incentives for firms • Collaborate with stakeholders Organizational imperatives • Shift to next-generation fuels and renewable energy sources • Diversify supply sources • Develop energy-conserving products and services • Turn scarcity into abundance • Shape pro-growth regulation The resource economy Impact on growth and jobs • INR458 billion (US$10 billion) added to GDP by 2020 • 0.3 percent above the current trajectory by 2020 • 821.The resource economy Chapter summary Areas to watch • Intelligent energy • Alternative energy • Green infrastructure • Food processing and agribusiness • Water.000 additional jobs by 2020 54 .

If approached imaginatively. green infrastructure and food processing will generate significant employment opportunities for individuals possessing traditional and new skills. threat from changing weather conditions. the same trends are causing demand for food to soar.3 percent above the current trajectory (Figure 4. source traditional resources from new locations and leverage efficiencyenhancing technologies.1). New areas such as renewable energy. this sector could raise India’s GDP by Rs 458 billion (US$10 billion) by 2020. water. 55 . The Oxford Economics model shows that. increased risk of diseases and pests to plants. 0. India’s oil-import volumes increased from 1. Agriculture and agribusiness sectors are working on next-generation solutions in collaboration with sectors such as biotech and IT meet rising demand. It could also generate 821. India must explore alternative resources. The Indian government is working to expand supplies of alternative energy sources such as wind. energy. Uncontrolled and unregulated use of groundwater has lowered water tables. The green sector will also enhance GDP by serving domestic and export demand. Thanks to new technologies and other innovations. the quest for resource efficiency can fuel economic growth and job creation. investment incentives and technology spillovers.2). The India’s agriculture sector is facing intense pressures. due to growing demand. while also overhauling the country’s energy infrastructure through technologies such as the smart grid to improve supply efficiency. infrastructural inadequacies and regulatory bottlenecks have slowed the effort. Population growth and urbanization are contributing to water scarcity. India faces an uphill battle to secure its resources for the future. resource consumption in India is set to expand further (Figure 4.5 MB/D in 2009 and are expected to reach 14 MB/D by 2050.6 million barrels per day (MB/D) in 2000 to 2. the manufacturing sector consumes about half the country’s energy generated for industrial use. to reach 140 billion cubic meters (BCM) by 2050. fresh sources of growth are unfolding in this sector. solar and nuclear. With India’s GDP expected to grow at an average of 8 percent per year over the next decade. In an attempt to meet the need. Energy intensiveness in Indian industries counts among the highest in the world. skills development. India would also need to increase its gas imports quickly. Meanwhile. While companies in the food processing business have sought to expand capacity. Accounting for one-fifth of India’s GDP.000 new jobs by 2020 and boost India’s structural transformation (Figure 4. particularly after 2020.Assessing the trend: The drive for resource efficiency As the world’s resources—land. food and minerals— grow scarce.84 To prepare for the future. Our research and analysis show that the green sector could do more than just help India address resource shortages.3). with appropriate regulation.

780 megawatts Intelligent energy Intelligent-energy solutions will promote India’s low-carbon agenda while also addressing its inefficient power supply. bioenergy (biomass gasifiers) and next-generation solar power can create new markets and export opportunities as well as provide a much-needed impetus to India’s domestic manufacturing sector.000 such smart meters in the state of Maharashtra.0 15. one of the highest in the world. Rural/agricultural areas suffering acute power shortages can 56 . Smart grids that work in tandem with smart meters have two-way communications capabilities and can further improve efficiencies while promoting use of green energy.Figure 4.0 10. Nuclear power is the fourth-largest source of electricity in India. have adequate and reliable access when each user is mapped on a smart grid.0 35. Smart meters can also send consumption statistics to the grid. which can use the data to regulate loads more efficiently.0 30. with India ranking ninth in the world in terms of number of operational reactors. Alternative energy sources such as wind power.0 5. Reliance Energy has installed more than 20. As of 2010. only a few public-sector utility companies have launched pilot projects to test the technology’s suitability. and can prioritize usage of green electricity sources.0 0. consumer products. choosing when to switch off the meter. Smart grids intelligently gather and analyze consumption patterns to control distribution and reduce theft. energy. infrastructure and automotive sector. At present. India had 20 nuclear-power plants generating 4. User can manage their power usage from a remote location. which send energy-usage data in real time to meter owners through Google. hydro-power. The smart-grid market in India is still nascent. energy losses during transmission and distribution in India exceed 30 percent.0 Quadrillion btu 25.1: Total Primary Energy Consumption in India 40. The Ministry of New and Renewable Energy in India has set a target of renewable energy sources’ contributing 10 percent to new power-generation capacity installed up to 2012. Wind energy is one of the fastest-growing alternative-energy sectors in India.0 20.0 2000 2005 2008 2015 2020 2025 2030 2035 Source: US Energy Information Administration Areas to watch Which sectors stand to benefit most from this resource-efficiency revolution? Our research shows that managing the scarcity of resources is opening up growth opportunities for a wide range of old and new industries— including agriculture.85 Alternate energy India wants to reduce its dependence on non-renewable energy sources.

000 trillion kilowatt hours (KWH) in sunshine each year. The US-India Business Council estimates that India will spend about US$175 billion within the next 25 years on the nuclear-industry build-up.87 Domestic players like the National Thermal Power Corporation (NTPC) and the Nuclear Power Corporation of India (NPCIL) are also partnering to develop nuclearpower plants within India. Meanwhile. aims to deploy 20.000 MW of nuclear power by 2020. The country plans to increase nuclear-power output to 63.Carbon Dioxide Emissions 1800 1500 1200 900 600 300 0 1980 1984 1988 1992 1996 2000 2004 2008 Million metrics tons of carbon dioxide emissions Source: US Energy Information Administration (MW).000 additional jobs by 2020. Recent research by The Climate Group estimates that India’s wind-energy sector could create as many as 250.92 57 . exporting close to 75 percent of its total production to markets in the EU. NTPC has set a target of generating 2. from less than 60 MW in 2005 to more than 1 gigawatt (GW) in 2009.Figure 4. for instance.000 MW of solar power by 2022. The solarenergy sector could create another 235. intends to increase its solar-power generation capacity tenfold within a year to achieve its target of 40 MW by March 2012. India is also set to become a major manufacturing hub for the global solar PV market. a solar-energy government initiative.5 GW by 2015. nuclear-energy major Areva plans to build six next-generation reactors over the next few years. The solar-energy agenda is also accelerating expansion plans in ancillary industries such as semiconductors.90 Tata Power.88 India has abundant solar resources. Green infrastructure India’s drive toward renewable energy is fuelling its green-infrastructure sector and breeding demand for a host of green capital goods as well as construction and building materials.89 The government also plans to deploy 20 million solar lighting systems in rural areas by 2022.2: India .91 India’s production capacity for solar photo voltaic (PV) systems has grown multifold.000 MW by 2032.86 US companies like GE Hitachi Nuclear Energy and Westinghouse Electric Company are already exploring opportunities to build nuclear reactors in India and provide nuclear fuel for civilian energy programmes. The Jawaharlal Nehru National Solar Mission. and is expected to reach 2.000 jobs during the same period. The India-US civilian nuclear deal is a major step toward establishing a strong nuclear-power capability. receiving the equivalent of more than 5.

96 Food processing and agribusiness India’s food-processing industry is evolving rapidly. India will be a major manufacturing hub for wind turbines in Asia. As one of our panelists pointed out. the next two decades would present a huge opportunity for the construction sector as well as related sectors such as cement and steel. The ministry expects that reaching these targets would require an additional investment of US$22 billion over the next five years and a large inflow of talent.In addition. Pepsico started contract farming with potato growers in the state of Punjab in 2001 and is now doing so in eight other states. Suzlon is creating demand for a wide variety of ancillary manufacturing parts such as gearboxes and drive shafts.000 MW by 2013. rice. It has also contracted with 22. Annual production capacity will rise from the current level of 7.000 farmers to procure potatoes. To capture this huge opportunity.000-MW wind projects through March 2013. increase value addition from 20 to 35 percent and double India’s share in global food trade to 3 percent—all by 2015.200 farmers to cultivate barley in a partnership tie-up with the United Breweries Group.94 In turn. Meanwhile. rapid urbanization is driving new demand for energyefficient residential and commercial buildings. Pepsico has partnered with 1. In Rajasthan. “The next big jump in GDP growth will come from agricultural and rural reforms and there is a long pending agenda there. is benefiting from strong domestic demand. The Ministry of Food Processing estimates that this market will be worth US$70 billion by 2015.95 There are 1.” Expanding contract-farming engagements in India indicate the employment that the food-processing sector can create. owing to the changing lifestyles and rising disposable incomes. And with 80 percent of India yet to be built.97 58 .500 MW to more than 17. tomato and chilies. while the green-building footprint will likely increase to 45 million sq ft by 2012.063 projects in the pipeline with a green footprint of 636 million sq ft. barley.93 Suzlon. and recently received an order from Caparo Energy to set up 1. India’s green building products and technologies market is expected to hit US$100 billion by 2012. the ministry has set targets to raise the level of perishables processing from 6 to 60 percent. Asia's fifthlargest wind-turbine manufacturer.

It also recycles all the water used in the facility.000 sq ft ITC Green Centre. and at the current rate of increase it will have a supply of just 744 BCM.852 KL of water. to tertiary standards through its sewage-treatment plant. the company’s stormwater pits recharged groundwater by 5.99 Newer sources of water are scarce. including waste water. investors injected US$160 million in 17 companies that specialize in water and waste management. and its sewage-treatment plant recycled 6. Between 2005 and 2010. a changing climate and growing water scarcity will put a premium on efficient land and water use. As acknowledged by the Indian Ministry of Environment and Forests. so the water-treatment and -management sector will need to step up. the 170. toxic. reaching 10 GW by 2020.98 Estimates suggest that India’s total water demand will double between now and 2030. Meanwhile. water and land management Land degradation. noncommercial green building. recycling and engineering. In 2008-2009. located at Gurgaon. Over 4 percent of India’s total greenhouse emissions—worth US$1 billion in the international carbon market—will be avoided once this initiative is implemented. organic and inorganic pollutants. 70 percent of India’s surface water resources and a growing percentage of its groundwater reserves are already contaminated by biological.Logistics and warehousing companies are also proliferating around major agricultural hubs across the country. reducing costs and—more important—water usage. The total capacity is expected to increase tenfold in the coming decade. crop and animal waste in rural India has traditionally been used to generate biomass electricity on a small scale.492 kilolitres (KL).500 BCM of water by 2030. is the world’s largest zero percent water discharge. For instance. The government has stipulated the creation of two million tons of additional storage for agricultural produce through modern silos.104 59 . Indian businesses are actively tackling water conservation and recycling. Waste. India will need around 1.103 The National Biomass Cookstoves Initiative will develop next-generation cleaner biomass stoves and deploy them to 160 million Indian households that currently use traditional stoves based on solid biomass fuels.100 But India will need to further invest more than US$5 billion in the water-management and solidwaste management sectors over the next 15 years.102 The building harvests all of the rain that falls on the structure.101 A large portion of this investment will go into R&D.

which uses domestic coal reserves. Initial estimates from US mining major Schlumberger has pegged the gas reserves at this site at 300 trillion cubic feet. Scientists at the Institute of Chemical Technology (ICT) are searching for algal strains that can be used to develop next-generation biofuels. particularly hybrid cars. This is the first significant shale gas reserve found outside the US and Canada.Alternate fuels As fuel prices continue to rise.110 Mahindra Reva is coming out with two four-seater electric cars under the names NXR and NXG. will play a critical role in reducing dependence on oil. India aims to reduce the current cost of production of US$10 per liter by almost 25 times by utilizing micro-algae that can be grown on a massive scale.6 trillion cubic meters. thought to be around 4. It is also developing a 60 . It plans to invest US$300 million to increase production to 3. this initiative could turn India’s current energy picture from deficit to surplus. a major player in this segment. The country has one of the largest estimated reserves of CBM.106 Meanwhile.107 Coal-bed methane (CBM). More futuristic technologies. Coal-to-liquid technology. offers another sign of hope because it may help reduce India’s reliance on oil imports. To enter the electric-vehicle (EV) market.108 Essar Oil. more than 15 percent per annum. Shale gas may be one such alternative fuel. another relatively new fuel alternative.000 cubic meters of gas per day from its 33 drilling wells.000 units per year. However. A joint venture between India's Tata Group and South Africa's Sasol will invest US$10 billion in another coal-to-liquid project in the same state.109 Hybrid and electric vehicles India is steadily gaining a reputation as the global hub of fuel-efficient cars. ICT’s five-year project in collaboration with the International Centre for Genetic Engineering and Biotechnology will genetically modify the best-suited algal strains to increase their productivity. a steep increase in vehicle ownership.105 If successful. India’s Oil & Natural Gas Corporation (ONGC) recently discovered the first shale gas deposit in the country in the state of West Bengal. The government recently awarded two coal blocks in the state of Orissa to Jindal Steel and Power (JSPL) and Strategic Energy Technology Systems (SETL) for coal-to-liquid technology projects that will likely begin by 2018. is also attracting interest in India. currently produces 35. the Mahindra group acquired electric-car manufacturer Reva in May 2010. will pose a significant threat to Indian’s transport system and the environment overall.5 million cubic meters a day through 500 drilling wells over the next two to three years. other research efforts are exploring additional alternative fuels. vehicle manufacturers in India are developing models that can function on alternative fuels as efficiently as they do on conventional fuels such as petrol and diesel. It plans to establish a new plant with a production capacity of 30.

the trajectory by 2020. This definition includes “traditional” environmental businesses dealing with pollution.3 percent above the current and technology spillovers. investment incentives Employment (million) 61 570 GDP (Rs trillion) .3 percent above the current trajectory. skills development. Figure 4. To model the impact of the green sector on the economy. investment incentives and technology spillovers. current trajectory. This translates to lifting employment levels by 821.000 by 2020. investment incentives and measures to induce greater technology spillovers. water treatment. and green building technologies). alternative trajectory (right scale) Employment. The potential of the sector could be improved. Oxford Economics used the generally accepted definition of green businesses as those that make use of low-carbon and resource-efficient practices to operate more sustainably than competitors in their industry. carbon finance.000 by 2020. waste management. with pro-green regulation combined with skills development. environmental consultancy and recycling as well as renewable energy companies and those involved in emerging low-carbon activities (such as alternative fuels. carbon capture and storage. increment in alternative trajectory. with appropriate regulation. energy management. constant 2010 prices (left scale) GDP. constant 2010 prices (left scale) Employment. current trajectory (right scale) 610 600 590 580 110 100 90 80 70 60 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2019 560 550 540 530 520 510 500 490 2020 Source: Oxford Economics green sector could boost India’s GDP by INR458 billion (US$10 billion). the green sector could boost India’s GDP by Rs 458 billion (US$10 billion) by 2020. 0.3: Potential of interventions to stimulate the resource economy 150 140 130 120 GDP. 0. however. skills development. The Oxford Economics modeling shows that. buttressed with an appropriate blend of regulation. This translates to a lift in employment levels by 821.Creating growth through the resource economy The econometric analysis by Oxford Economics shows that.

is in talks with Toshiba. Toyota. Investing in next-generation technologies Investing in next-generation technologies can help India catch up with developed-economy competitors in the resource arena.112 Creating the conditions for success India’s resource economy has significant growth potential and abundant opportunities for the private sector.111 India’s Ministry of Natural and Renewable Energy announced a US$21 million incentive scheme. for its part. there is an urgent need for investment incentives and technology spillovers to realize this growth potential. to build a pilot project in India aimed at 62 . the Scorpio. For instance. companies will need to rapidly develop large-scale green-infrastructure capabilities. It is still nascent compared to other developed markets. To support technology development. It thus provides a chance for companies to build next-generation capabilities without having to manage legacy systems. To bridge the supply-side deficit. providing incentives of up to 20 percent on ex-factory prices of EVs sold in India for the remainder of the 11th five-year plan. Even public-sector major Bharat Heavy Electricals Ltd (BHEL) is looking to partner with Japanese automaker Toyota to make EVs. Idea incubation will be vital for generating innovative solutions to old problems based on high-technology platforms. As suggested by our analysis. Mahindra & Mahindra’s acquisition of Korean SUV maker SsangYong will further strengthen its electric. the Japanese power-equipment maker.hybrid version of its popular SUV.and hybrid-vehicle projects. India’s biggest power producer. NTPC. is keen to partner with BHEL to tap its experience in manufacturing electric buses and electric locomotives. Signs look promising. India should address the infrastructure shortages currently constraining resource-related growth opportunities.

50/KWH (1. Of this. last year committed US$1. For instance.6 billion to build mining-related infrastructure in Indonesia. provides solar-energy solutions to underserved households and businesses. oil and gas. For the 12th plan period (2012-2017).114 The Indian government also made financial support available for the installation of solar-energy systems and solar lights through the Jawaharlal Nehru Solar Mission. iron ore and other assets abroad in sectors such as power generation. the projected investments in power generation during India’s 11th plan period (20072012) are US$133 billion. the Ministry for New and Renewable Energy (MNRE) approved a Generation Based Incentive (GBI) Collaborate with stakeholders To achieve green targets and seize opportunities in these areas. their clean. windpower projects have received many concessions. such as a 10-year tax holiday. and metals and mining. For instance. which can help Reliance make the most of its exploration assets. Educational institutions and academia are keen to help shape the future resource economy. commercial and non-commercial entities. academics at the University of Nottingham will receive more than £5 million (US$8 million) in UK funding for research on opportunities in the UK and India for small-scale energy generation through renewable sources.2 GW in the Gulf of Kutch. Projected financial outlay for this scheme under the 11th plan period (2007-2012) is estimated at US$90 million. the private-sector contribution is expected to be around US$37 billion or 21 percent. the Indian government formally recognized the role that renewable energy can play in reducing the country’s dependence on fossil fuels and combating climate change. India’s biggest coal importer. industrial. The new entity would likely work in tandem with the Indian Renewable Energy Development Agency (IREDA). hopes to import 5-10 million tons of coal from Australia in the next three to five years. and will help reduce climatechange effects of coal-based power plants. Companies are forging strategic alliances and key partnerships with suppliers and even competitors to secure resource supply in the long term.1 cents) would be given to eligible projects for a maximum period of 10 years. A recent study found 7 GW of potential in the Gulf of Cambay and an additional 1. The first 5-MW carboncapture plant in India will be set up by 2016. They have an advantage in not having to deal with legacy systems and can base their growth on clean technologies that will help them tackle future resource scarcity. a government-owned nonbanking financial company. It introduced a tax of US$1 on every metric ton of coal produced or imported into India. Tata Power holds a 30 percent stake in two of the country’s largest coal mines. development of an autonomous green-power system and promotion of greater use of mobile technologies to grow wealth in rural communities. NTPC also plans indigenous development of next-generation super-critical and ultra-super-critical power-plant technology that will significantly reduce CO2 emissions. cost-effective technologies can also help exploration companies improve productivity.000 solar systems since its inception. a not-for-profit organization established in India in 1995. energy-efficient operations will help them gain access in developed economies and avoid stringent environmental regulation. This money will contribute to a new Clean Energy Fund.115 Develop energy-conserving products and services Be it the semiconductor industry that supports the solar PV systems market. concessional custom duty and power buy-back from states. the government will establish a Green Bank using the US$500 million raised through the national Clean Energy Fund annually. For instance.capturing and storing carbon emissions. both located in the state of Gujarat. Reliance Industries recently partnered with BP to get access to BP’s technology. Its services span the value chain—from creating awareness Organizational imperatives Shift to next-generation fuels and renewable-energy sources Indian companies must plan for a future where pollution-causing fossil fuels will be prohibitively expensive and regulated. The company intends to import the same quantity of coal from Indonesia. For instance. SELCO Solar. 63 . or green-building construction companies. BP will help Reliance Industries to maximize the performance of its existing blocks with the help of its superior technologies. Meanwhile. As these companies expand operations beyond geographical boundaries. and the Adani Group. the market for green technologies is expanding. The government wants to promote private participation by subsidizing 50 percent of the cost of demonstration tidal-energy plants. stakeholders throughout India must collaborate with each other and with external partners. India has also been trying to build tidal-power plants.118 Create incentives for firms Incentives are needed for private investment in resource exploration and generation.116 Diversify supply sources Intensifying demand for resources and concerns about future resource security are motivating Indian companies to scout for coal. A variety of new.000 MW by 2017.113 In 2010. In addition. The private sector has already announced a planned capacity increase of nearly 100 GW over the next six to seven years.000 MW to 75. An incentive tariff of Rs 0. The companies should also benefit from government incentives to increase production of renewable resources. which plans to increase its capacity from the current 30. private-sector participation will likely be higher— about US$60 billion (35 percent of the total capacity addition). accelerated depreciation. scheme for wind-power projects. and has serviced and financed more than 115. NTPC. The programme provides a 30-percent subsidy combined with 5-percent interest on loans by individuals.117 India already counts among the largest buyers of coal from Indonesia.

Companies thus have an opportunity to shape such regulation in partnership with policymakers. Such systems could make up for the absence of grid electricity supply in many remote areas in India. helping to provide food. rather than penalizing companies for not meeting fixed emission-reduction numbers. Indeed.120 64 . TERI’s biomass gasifier requires less expensive diesel. animal waste– is available in enormous quantities. The ministry is piloting a market-driven emissions-trading system in three states that will allow different companies to cut emissions as much as they can and to benefit accordingly. agricultural residues. In India’s large agrarian economy. and with regulators.about solar-energy benefits to persuading commercial and rural banking institutions to finance sustainable energy systems for lowincome rural households. The Ministry of Environment and Forests in India is helping to advance such efforts. The Energy and Resources Institute (TERI)’s biomass gasifier system uses biomass for power generation. A technological Shape pro-growth approaches to regulation India’s regulatory environment remains underdeveloped with respect to green technologies and alternative energy. innovation developed at TERI gives consumers the option of using diesel or producer gas. uses and recycles waste. thereby reducing diesel consumption by more than 70 percent. Polluting companies can choose to reduce emissions or buy permits through an auction. businesses must engage with each other. allowing the engine to operate in dualfuel mode. Turn scarcity into abundance By using resources in creative ways.119 Even consumer-durables companies are developing products that use less electricity than ever before. companies can transform waste into assets. they are must-haves. Energystar ratings are no longer good-tohave features. The producer gas is fed into the diesel engine. over 40 percent of India’s total energy requirement is met through biomass burning. They will grant emission-reduction permits to companies that reduce emissions. But to help create a regulatory environment favorable to growth. and reduces air pollution. System administrators will take into account the different scales of emissions. including customers and investors. biomass – wood. with the scientific and academic communities. raw materials and energy. They can also work with regulators to educate other stakeholders. about the value of sustainable business models.

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Simultaneously. India’s business leaders take a similar mixed view of the future. Those who cling to old strategies and focus exclusively on traditional drivers of business growth will find the future challenging and alien indeed. From the surge of emerging markets and demographic shifts. because India’s rising incomes and rapid economic growth will almost certainly continue to bode well for business. India’s firms will need leaders who can guide them beyond their old identities and traditional wellsprings of growth—and who have the foresight to creatively harness the new waves of growth. and the pervading sense one gets is some degree of optimism tempered with a large dose of uncertainty. Accenture’s recent research on the New Waves of Growth confirms that this need not be the whole story for India. individuals and governments respond to these new opportunities today. Adopting a new perspective on the trends reshaping the economic landscape – many of which are often viewed as challenges – reveals a tremendous upside that includes fresh drivers of business growth. What is now clear is that future success will hinge on how well businesses. because continued risk and volatility make it difficult to know what is needed to maximize India’s potential and capitalize on the new opportunities arising abroad.The last word Ask business leaders today for their assessment of global economic prospects. new demandand supply-side drivers of growth are taking shape. the economic horizon seems both foreign and promising for many of India’s business leaders. And they are uncertain. They are optimistic. technology’s accelerating impact offers firms novel ways to tap these new opportunities. Amid this uncertainty. 67 .

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March 6. “ITC Green Centre: A Blueprint for protecting the future”. 116 The Hindu. 96 Business Standard. 105 The Financial Express. 112 Panchabuta. May 2011. “Indian Biomass Energy reaches 1 GW in 2010”. 114 Global Wind Energy Council website. 115 The University of Nottingham. “BHEL may plug in with Toyota to make electric vehicles”. “Indonesia thermal coal export ban proposal worries India”. Indonesia” July 14. 94 domain-b. “Mahindra Reva Electric Vehicle records three-fold rise in average monthly sales following MNRE subsidy”. 2011. 69 . “Study on Common Pool Price Mechanism for Natural Gas in the country”. 95 Business Standard. June 11. “Buoyant Pepsi to take contract farming to troubled states”. 102 ITC. “Shale gas in India is 300 times KG D-6”. “Mahindra Reva Electric Vehicles launches its Revai” December 10. 2011. 100 Outlook Business. Waste and Wealth” February 5. 2010. “Water. 107 Hindustan Times. 2011. 2011. April 10. 98 Ministry of Environment and Forests. “State of environment report 2009”. 108 Mercados Energy Markets. 104 “The Indian National Initiative for Advanced Biomass Cookstoves: The benefits of clean combustion”. 2011.93 Centre for Wind Energy Technology website. 2011. Government of India. December 21. February 7. “Impact of JNNURM”. February 2010. 113 Ministry of Finance. 99 Indian TV Today. “Green energy project poses threat to wildlife in Maharashtra”. January 2010. March 10. 2011. March 17. April 19. 103 Green World Investor. “An act of commission on emissions”. 2011. “Orissa Govt decision on Tata-Sasol coal-to-liquid JV soon”. 111 Business Line. “India's green building footprint increases: Jones LaSalle”. “India to face major water scarcity by 2030”. 119 SELCO website. 110 Deccan Herald. 2011. 2010. 97 Business Standard. 2011. 2010. “Suzlon signs deal with CEIL for 1000 MW wind power project” January 28. 2010. “Green building space at 648 mn sft” April 25. August 3. “NTPC to pursue coal mine acquisition in Australia. Government of India. 117 Business Standard. January 11. Venkataraman et al. 2011. 109 The Economic Times. 2010. 118 Business Standard. 106 The Economic Times. 120 Indian Express. April 2010. “Essar Oil starts gas production from Raniganj CBM block”. March 2011. May 6. January 6. “Next: Fuel from algae”. 101 India Infrastructure. 2011.

Any figures and statistics used in this study were up-to-date at time of writing and are subject to change without notice. created and maintained by private and public organizations. Aarohi Sen. Ryan Coffey Senior Review Team Sanjay Jain. The information contained and the references made in this Report is in good faith. advice. Smriti Mathur. This Report also contains certain information available in public domain. timelines or completeness of such information. Accenture does not control or guarantee the accuracy. relevance. Matthew Robinson. statement or opinion contained in this Report. Such opinions should not be construed as providing professional advice. Ladan Davarzani 70 .About this study This Report has been published for information and illustrative purposes only and is not intended to serve as advice of any nature whatsoever. The views and opinions expressed in this publication are those of Accenture only and do not necessarily reflect those of any of the companies researched or surveyed or any other third party referenced in the report. Raghav Narsalay. neither Accenture nor any of its directors. or relied upon as such. Mark Purdy. recommendations or endorsements. David Light. Armen Ovanessoff. agents or employees give any warranty of accuracy nor accepts any liability as a result of reliance upon the information. Acknowledgments Authors Mamta Kapur.

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Accenture. Combining unparalleled experience. its logo. technology and outsourcing experience to conduct innovative research and analysis into how organizations become and remain high-performance businesses. technology services and outsourcing company.000 people serving clients in more than 120 countries. Copyright © 2011 Accenture All rights reserved. The company generated net revenues of US$21. About Accenture Accenture is a global management consulting. Accenture collaborates with clients to help them become high-performance businesses and governments. comprehensive capabilities across all industries and business functions.accenture. and extensive research on the world’s most successful companies.About the Accenture Institute for High Performance The Accenture Institute for High Performance creates strategic insights into key management issues and macroeconomic and political trends through original research and analysis. Its home page is www. with more than 215. and High Performance Delivered are trademarks of Accenture. Its management researchers combine world-class reputations with Accenture’s extensive consulting.6 billion for the fiscal year ended Aug. 31. 11-1185 .com. 2010.

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