New Waves of Growth for India
Foreword Executive summary The quest for growth The emerging-markets surge The multi-technology future The resource economy The last word
5 6 10 23 39 53 67
several trends are pervasive and virtually unstoppable: a large section of India’s population is entering the working-age group. If businesses and governments can make the right responses to these trends and build the right capabilities. While developed markets are still experiencing sluggish recovery. In this report.Foreword
The recent economic slowdown has transformed markets around the globe. The forces coalescing today to shape the India of tomorrow are complex. The stage is set for fiercer-than-ever competition. While many variables will affect the Indian economy over the next decade. and innovation systems—critical for igniting sustained growth. activity is quickening among the emerging economies. the corrective interventions to improve employability of the future workforce remain insufficient. the developed-market multinationals have regrouped—and are striving to win back the ground that they lost during the recession. execution capabilities for large infrastructure projects. Some opportunities and challenges will be best tackled through bilateral and multi-lateral cooperation. Business leaders and policymakers will have to make difficult choices to plant the seeds for future success in today’s resource-constrained environment. that the effort will be very worthwhile—but only if stakeholders throughout India act now. While there is a growing recognition that India cannot reach its full competitive potential without the effective engagement of its massive human capital. however. technology is marching onward with more applications and more users. 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. energy and natural resources are growing even more scarce. Meanwhile. This confluence of dramatic. The tools for competing are also changing – witness the emergence of new business models. new ecosystems and new innovation networks forged through technology advances. still others through non-traditional and counterintuitive partnerships. It is clear.
Sanjay Jain Managing Director. 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. It will not be easy. thus the means for managing them must be complex as well. swift changes will create both opportunities and challenges for businesses in India. and the winners will be those companies that can position themselves at the forefront of change. they can help drive inclusive growth in India. Emergingmarket multinationals have established new competitive positions and garnered new market share in a number of industries. Accenture Management Consulting
. The Indian economy currently faces a deficit of many supply-side elements—such as the right type and mix of skills. others through coordination among different players across their supply chain. and economic demand is gravitating toward the emerging world.
Applying two distinctive lenses—a sectoral view and a macroeconomic perspective— our findings are based on extensive discussions with panels of experts representing business. academia. The country’s growth rate remains among the strongest in the world. the rise of new technologies and the burgeoning resource economy. To serve the rising demands of its growing population. smart application of technology and clear channels to new markets. As this new landscape takes shape. India has the opportunity to position itself at the forefront of future economic growth — as a leading international hub for investment.Executive summary
There are clear signs of economic recovery across the globe. The Indian economy has the potential to grow by 8. strong physical and financial infrastructure. but growth continues to be uneven across countries. Accenture research in collaboration with Oxford Economics suggests that with the right responses from business and government. instead of 8. a healthy population. human capital and innovation. Despite these achievements. over the next decade. To improve its position. Emerging economies also face a daunting challenge: to sustain their impressive growth rates for years to come. This equates to an extra Rs 11 trillion (US$244.0 percent in the current trajectory. India must do more to take its place at
the table with the world’s most competitive economies. diversify that growth across a broader range of sectors and make it more inclusive across their populations. New growth sectors must be built on strong supply-side foundations: enough workers with the right skills. supplemented by an increased commitment to developing “sunrise” industries.4 billion)
. these trends can strongly drive future economic growth and job creation for India.7 percent per year. government and the non-profit sector as well as deep analysis of extensive secondary data and Oxford Economics’ econometric modeling. 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. fueled primarily by rising domestic demand. India must revitalize its traditional industries such as agriculture and manufacturing.
This report—New waves of growth for India – Unlocking opportunities— identifies three key trends that hold enormous promise for India in the decade ahead. Uncertainty and volatility still cloud the horizon. the emerging-markets surge. 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. namely. In addition. 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.
of GDP by 2020 and 37. infrastructure and medical tourism.5 million additional jobs.
To capitalize on the growth opportunities in emerging markets. Blending this experience with local approaches to selling. enable innovation and increase productivity. trade. Threequarters of these jobs would arise from India’s exports to other emerging markets. one-quarter. over and above what India would otherwise achieve. consumer goods. Organizations can kick-start the foray into emerging markets by drawing on their experiences of serving diverse consumer segments in India. from the green and high-tech sectors. New technologies have the potential to mobilize communities. This report highlights key actions that policymakers and business leaders can take to leverage these trends and stimulate renewed growth in the Indian economy.
The emerging markets surge
A primary driver of India’s trade growth has been a rise in trade with other emerging economies. Next-generation technologies like mobility solutions. tourism. India needs to play a more proactive role in building new bridges to the emerging world by fostering links in investments. cloud computing and analytics will create new sources of demand in
The multi-technology future
Technology is central to economic progress and the improvement of living standards in India. 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. labor movements and aid extensions. India’s increasing integration with other emerging markets will open new opportunities for Indian businesses in the areas of services. talent development and innovation in other emerging markets can be the recipe for success for companies from India.
a reality.India. With global warming fast becoming
.and sustained investments in next-generation technologies. geo-thermal and nuclear. businesses will need to adopt a systematic and disciplined approach to innovation.
The resource economy
The battle for resources is growing fiercer across the globe. the need for a low-carbon economy will accelerate the demand for intelligent energy solutions such as smart grids. driven by rising demand coupled with rapidly dwindling sources. To capitalize on the opportunities created by technology change. academia and R&D institutions . Businesses will need to continually look outward for new market opportunities and sources of knowledge. 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. solar. alternate fuels and hybrid vehicles. businesses will need to place strategic bets on the future areas of growth and build the right strengths and capabilities. finance and healthcare to India’s massive rural markets. The widening energy demand-supply gap is creating an urgent need to exploit alternative energy sources such as wind. hydropower. fresh sources of growth are unfolding in the form of water. 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. which have remained outside their reach owing to poor infrastructure and connectivity. 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. land and solidwaste management solutions. as well as inward for new skills and capabilities. They will also give birth to whole new business models for providing education. Unleashing these technologies’ full potential will call for serious investments in building digital literacy and skills and creating smart. Realizing the growth potential of the resource economy will require greater coordination and collaboration among stakeholders across the value chain— policymakers. In the management of scarce resources. green infrastructure.
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. transparent regulatory standards.
Even when compared to emerging economies alone. India must do more before it can take its place at the table of the most globally competitive economies. and financial markets are reviving.
With the broadening of the global economic recovery. As this new landscape takes shape. India’s middle class will explode over the next four decades. manufacturing and service sectors.4 billion by 2050.3 Indian businesses have successfully capitalized on labor-cost arbitrage to put India on the world map as a major exporter of services. India needs to build structures and capabilities that can help it withstand future economic shocks and sustain high growth rates far into the future. and one-third of Indians are under 15 years of age. Global trade is accelerating.2 billion by 2030 and 1..4 To improve its position. India has the opportunity to position itself as a leading international hub of investment. a competitive manufacturing and sourcing hub and a centre for low-cost. healthcare and infrastructure. English-speaking talent pool at a cost unmatched in developed economies.
Indeed.2 India is home to 20 percent of the world’s population.8 percent in FY2012. high-quality research and development (R&D). But it needs to do more
Despite these achievements. The International Monetary Fund (IMF) projects India’s growth at 8. It must also broaden its base of economic growth by rebalancing its agriculture. increasing to 1. India ranks 51st from among 139 countries reflecting the need to improve significantly on basic drivers of its competitiveness such as education.The quest for growth
India’s on the rise.. consumer and business confidence is improving in most parts of the world. according to the World Economic Forum’s Global Competitiveness Index 2010-11. thanks to strong consumption in rural India and plentiful employment opportunities in non-agricultural sectors... These businesses have profited and grown by tapping into a large university-educated. India ranks just 24th.2 percent in FY2011 and 7.1 India will continue to witness strong growth in the near future. The country’s growth rate remains among the strongest in the world. fueled primarily by rising domestic demand. This will require continued investments in traditional industries and in “sunrise” industries (those in which huge advances have already been
. India is set to become one of the world’s top five consumer markets. According to Asian Development Bank estimates. For example. human capital and innovation. The workingage population pool in India will only expand in the coming years.
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. there is a fresh opportunity for government
and business to collaboratively find solutions to domestic challenges and achieve sustainable growth and prosperity. There is tremendous potential in developing traditional industries such as agriculture and manufacturing. opinion formers and experts across sectors. while biotechnology and advanced digital technologies also hold great potential. to model the potential future impact on GDP and employment levels of these trends for the Indian economy. particularly through investment in vocational education and training. and the policies and organizational actions that can help ignite that growth.
A macroeconomic view: Our panels suggested that significant untapped opportunity for further economic growth and job creation lies within reach for the Indian economy. Additional countries studied in this same project include the United States. Opportunities in sunrise industries have only begun to be exploited. This analysis provides unique insights into the alternative growth trajectories open to the Indian economy. In basic and high-value manufacturing industries. and by greater use of biotechnology to increase yields per hectare of land. This research project was part of a multi-country study that Accenture pursued to spot new waves of growth for the next decade. pharmaceuticals and renewable energy. 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.made by domestic and multinational companies). Accenture asked Oxford Economics. India needs to generate job opportunities for workers from a largely agricultural background. As India looks toward the future with the same optimism that has driven the country’s growth to date. The most obvious success stories are in IT-related business services. such as food processing. 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. Germany and the United Kingdom. the size of the potential market opportunity for business. the world-renowned economic research organization.
enable innovation and productivity increases. the supply of resources is limited by geopolitical factors and stiffer regulation to address externalities such as climate change. India faces an uphill battle to secure resources for the future.1: India output .Figure 1. The understanding that their tested homegrown business models could be replicated in similar economies is giving them the confidence to make bold moves.a. It has provided a foundation to connect people and communities. and improve standards of living and opportunities across the country. water. They also offer new market opportunities for
. This is equivalent to Rs 7. multi-technology and natural-resource security.
sectors including financial services. food. energy. 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.7% p. India’s response to this resource scarcity will generate significant employment opportunities for people with traditional and new skills and will stimulate economic growth. Nigeria. South Africa and Bangladesh.
Source: Oxford Economics
Three new waves of growth
Drawing on our research and input from our panelists. Recent initiatives such as the Unique Identification (UID) project present an enormous opportunity to improve governance and public-service delivery. Simultaneously.0% p. Initiatives to improve digital literacy could help the high-tech sector grow further. with spillover effects on economic growth and employment. Competition has intensified for resources of all kinds—land. They are considering making inroads in countries such as Indonesia. Increased trade integration can drive economic growth directly through export opportunities and indirectly through stimulation of higher productivity and innovation among export-competing firms. India’s trade with other emerging markets has risen.
Rs154 trn Rs11 trn
Alternative trajectory increment
GDP (Rs trillion)
100 80 60 40 20 0 2010 2020
The resource economy
As the world’s resources grow scarce.
+ 8. India is at the forefront of the surge in emerging-markets.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.700 in GDP per capita.a. Businesses
in India are moving beyond the more obvious choices of expanding in emerging markets such as Brazil and China. consumer goods and healthcare. minerals.
The multi-technology future
Technology is central to economic progress and the improvement of living standards in India. Over the last few years.
On the current trajectory. giving these markets the potential to drive consumption growth for the next few decades. For example. Oxford Economics then modeled an "alternative whole-economy trajectory". with economic output reaching Rs 154 trillion (US$3. Oxford Economics assessed the effects of better regulation. Indian rural markets. increment in alternative trajectory.Figure 1. still have large pools of untapped demand. the benefits in terms of future growth are not. But India could increase its economic output further by establishing supply-side conditions to harness the new waves of growth. India’s domestic consumption will likely serve as a critical engine of growth for the nation’s economy. enhanced skills development and greater levels of investment. in which various supply-
side factors were adjusted to capture additional output and employment potential from the relevant trend. in the case of low-carbon economy. the size of the potential market opportunity for business. alternative trajectory (right scale) Employment. rising aspirations among consumers and a growing middle class. to model the potential future impact on GDP and employment levels of these trends in the Indian economy. sufficient infrastructure.4 billion) of economic
. The current trajectory is based on the likely evolution of the three trends.4 trillion) by 2020. For each trend. current trajectory. increases in disposable income. or “current trajectory. in the case of emerging markets surge. Accenture asked Oxford Economics.2 trillion)
in 2020. assuming no significant policy or business interventions to bolster the supply side of the economy. These interventions could push the Indian economy onto an alternative trajectory. such as enough workers with the right skills. constant 2010 prices (left scale) GDP. constant 2010 prices (left scale) Employment.2: India GDP . current trajectory (right scale)
GDP (Rs trillion)
120 110 100 90 80 70 60 2010 2011 2012 2013 2014 2015 2016 2017 2018 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.5 trillion) in 2010 to Rs 144 trillion (US$3. and the policy and organizational actions that can help ignite that growth. smart use of technology and clear channels to new markets. This analysis provides a unique insight into the alternative growth trajectories open to the Indian economy.current and alternative trajectories
620 610 600 590
160 150 140 130
GDP. With a clear demographic advantage. the world-renowned economic research organization. an additional Rs 11 trillion (US$244. it looked at the positive spillover effects of trade (such as knowledge transfers and innovation).” for GDP growth and employment for the Indian economy for the period 2010 to 2020. It also underlines the fact that while the three trends are largely inevitable. Indian economic output is expected to grow from Rs 67 trillion (US$1. home to around 700 million prospective consumers. Oxford Economics began by using its global macro-econometric model to generate a baseline outlook.
200. The government is striving to promote exports in sectors such as gems and jewellery.300.5 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. combined with the country’s strategy of moving up the value chain. Seventy-five percent of the potential additional jobs would originate from India’s trade with other emergingmarkets. in consumer and intermediary goods. with an export target of US$70 billion.1).5 million jobs by 2020 (Figure 1. Our panel for the global new waves of growth project suggested that the growth in mobile banking and microfinance products.1) by 2020. and agri-exports. and chemicals and pharmaceuticals to reach its target of US$500 billion overall exports by 2014. These additional jobs have the potential to raise India’s per-capita GDP by Rs 7. machinery and transport equipment.000
Note: Totals may be affected by rounding. representing nearly an additional 37. growth in exports will create spillover effects in terms of new jobs in these sectors.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. 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. point to significant employment growth in technologies that support these sectors. compared with a 17 percent increase in the current trajectory. Source: Oxford Economics
output (Figure 1.6 Since all these industries are primarily labor intensive.
.700 (US$171.2). driven by cost-competitiveness.Figure 1. India’s technology sector is known for its software exports and business process outsourcing. owing to its relatively high degree of trade integration with other emerging markets and its existing comparative advantage.000
according to a survey by the Annual Status of Education Report (ASER) by Pratham. the average age in India will be only 29 years.10 Critical success factors Technology can improve delivery and scope of education. the country could expect to achieve a roughly 1 percentage point growth in GDP. compared with 30 percent in Brazil. For example. 75 percent in Russia and 82 percent in the United States. compounded yearly. India could help fill the gap by developing a large.5 million fewer skilled workers than it needs by 2020. India must meet three growth imperatives that we call skilling at scale. only 53. more is needed. compared with 37 in China and the United States. To harness these waves. 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. it has made some progress in primary education.
However. China. To that end.
Only 12 percent of the country’s population enrolls in higher education. In 2020.5 percent of children in the 6-14 age group in rural India were enrolled in school.
Skilling at scale
Nearly one-fifth of the world’s population lives in India. the quality of education is questionable. If India adopts policies that enable the working-age population to be productively employed. thereby standardizing the teaching tools and delivery methodology can help improve consistency of the quality of delivery to students. Revamping the Indian higher education system will require reforms in areas including course content (for example. 45 in Western Europe and 48 in Japan. Making use of new technologies such as video conferencing. and one-third of India's population is younger than 15 years of age.Figure 1. one teacher can reach out to more
.4). India’s talent advantage has come under increasing threat from other emerging economies. the Philippines and Vietnam.9 And while India’s legacy of strong higher-education institutions has served the nation well. including Englishlanguage capabilities.4 percent of children in fifth standard could read a second standard level text. for instance. vocational training and problem solving) and assessment of educational effectiveness. 96.8 However. healthy and productively employed workforce. Yet. Use of technology to deliver content. are developing talent pools with key skills. Brazil. educated. Competing in higher-value sectors requires skilled talent pools. according to the Planning Commission of India. financial inclusion and healthcare for all. In 2010.7 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. the world will have 56. 23 percent in China. an NGO.4: India: Population by age
800 Million 600 400 200 0 2000 2004 2008 2012 2016
Aged 50-59 Aged 16-49
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.
000 or more by March 2012. Stakeholders can collaborate to co-create skills.12 These figures indicate growth potential for financial services.467
60. The programme aims to bring basic banking services to 73.
Financial inclusion is a key priority of the Indian government and is expected to drive growth for India. However. It hinges on ensuring access to banking and financial services at affordable costs to India’s vast unbanked. enhance the capacity of tertiary education and improve the design and delivery of vocational curricula.5). The number of total bank branches in India expanded from around 133. Only about 57 percent of the population has savings accounts and only about 10 percent has life insurance. As India’s rural economy shifts toward more commercialized agriculture and non-agricultural activities. 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.000 unbanked Indian villages with a population of 2.
To address the need for financial inclusion. Critical success factors Technology can drive financial access and affordability. technology can enable professors from reputed Indian and foreign universities impart high-quality skills through guest lectures. In higher education. 2006-2010
64.13 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.027 in 2010 (Figure 1.027
62. with just 13 percent and 2 percent of the population owning the respective products.356 60. But banks still have difficulty reaching the poor. Tapping into the expertise of retired citizens can help solve the problem of India’s teacher shortage while keeping retirees economically active. this enterprising rural population will need access to cheaper credit.517
61. Recent initiatives such as the UID present an enormous opportunity to spread financial services across India by helping poor residents easily
.567 in 2006 to only 64. Technology can also be used to improve student assessment and benchmarking as well as support self-paced learning.170
Source: Economic Survey of India
students. both of which require banking facilities. disadvantaged and low-income groups.5: Rural bank branches.Figure 1.11 Penetration of debit and credit cards is also low.381 in 2006 to around 160. including children in farflung regions. the government and the Indian Banks’ Association launched a nationwide programme called Swabhimaan in February 2011. Businesses can work with government and academia to broaden access to quality primary education.442 in 2010. the number of rural bank branches have increased from 60.
establish their identity to consume banking and financial products. banks can expand their outreach profitably. increasing and improving the quality of the country’s pool of medical manpower and incentivizing the private sector to invest in capacity building. 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. For instance.3 % of GDP 1.15 Public healthcare spending in India is also among the lowest in the world. regardless of where patients live (see “India’s ageing population: challenge or opportunity?”). Reserve Bank of India (RBI) revised its mobilebanking policies to enable customers to conduct lower-value transactions. along the lines of ITC’s e-Choupal model.
Healthcare for all
India faces serious deficits in its healthcare infrastructure. For instance. ICICI Lombard (the insurance arm of ICICI Bank) has joined hands with ITC to provide a comprehensive suite of general insurance products to farmers.
.2 1. New delivery channels can reach untapped customers. social and physical wellbeing of the growing elderly segment of India’s population. By partnering with local organizations. improving access to primary care.9 0. India also has a serious shortage of doctors and nurses. In addition. in rural areas. These local partners could include players in the organized sector. Local workers can be a valuable source of ideas for developing new product and services tailored to local needs. As just one example. Mobile banking can further increase penetration even in rural areas.Figure 1.5 1.6: India’s public health spending. banks will be able to scale up their branch-less banking deployments and reach out to a wider population at a lower cost.0 0.
% of GDP India’s healthcare sector requires major reforms to make personalized healthcare available to all. such as the local kirana (grocery) shops. government hospitals provide inadequate services. 2002-2020
3500 3000 2500 1. policy makers will need to adopt measures that ensure the financial. As a result.4 1. while the World Health Organization norm is 1:300.14
Banking and technology players can collaborate to tap local talent in rural areas and invest in their training and capacity building.8 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
2000 1500 1000 500 0
Source: Oxford Economics / MoF. And most advanced medical technology and hospitals are located in India’s urban areas.1 Rupee 1.16 Ensuring timely access to healthcare for this age cohort will be critical. the bed-to-population ratio in India is 1:1000. Efforts must be made towards preventing diseases. or unorganized ones.
plans to set up 2.17 The Indian healthcare sector is poised to become a US$280 billion industry by 2020.21
.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. Entrepreneurs in India are developing new tools and techniques that use resources sparingly while still improving outcomes. Technology is also improving quality of nursing communication systems. The health insurance sector is also witnessing renewed enthusiasm.000) per bed. with the opening up of the sector to private participation. patient monitoring devices.5 percent of GDP (Figure 1.
Inclusive healthcare models are required.7 billion) but remain below 1. remote diagnosis and telemedicine. Results are quicker recovery and low costs.6). where more than half of the population does not have consistent access to basic healthcare. New business models such as managed healthcare will also emerge.20 Critical success factors Technology can help deliver quality patient care consistently. Rashtriya Swasthya Bima Yojana (India’s national health insurance programme). the biggest challenge is to ensure effective coverage while keeping it affordable. had enrolled nearly 23 million families and 8. at an investment of Rs 1. Especially
with rising disposable incomes and the highest population being the earning age group of 15-59 years.18 Oxford Economics expects overall spending to rise to about Rs 3.175 hospitals by April 2011. the insurance reach is bound to grow from the present meager 2 percent to 20 percent.6-2 million (around US$40. private domestic investments and longer life expectancy. In India. For example.000 hospitals across rural India in five years. government healthcare outlays. launched in late 2007. people can find information about treatment and diseases more easily than ever. For example. Glocal Healthcare Systems.19 This will fuel demand for higher-quality care and greater professionalism in the insurance industry. Thanks to new technology. a venture spearheaded by former civil servants.5 trillion (US$77. with spending on health estimated to grow 14 percent annually. thanks to household income increases. instead of adopting expensive equipment whose costs do not justify the benefits. cardiac surgery technique pioneered by Wockhardt Hospitals in India causes little pain and does not require general anesthesia or blood thinners.
7). Demand for private healthcare and pharmaceuticals will increase. drawing on individual defined contribution retirement accounts through bank and postoffice networks. While the ageing trend will support economic growth and employment. high compared to Europe and the US.
. 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.1% higher.7 billion) and to remain below 1. The participation rate of over-60s is estimated at around 30 percent.5 trillion (US$77.8). It will demand new business models that better integrate older workers into the Indian workforce. Higher disposable incomes in turn boost consumption. Participation in the scheme will likely increase as incomes rise and individuals start planning for retirement. Access to suitable financial services will also become increasingly important as people plan for longer lives. a larger over-60 population will further strain India’s already stretched public-healthcare system. the over-60 population and total population are lower than in the actual baseline forecast. These trends will create new opportunities for financial services and insurance providers. While the increase in India’s dependency ratio will be significantly less than the increase in the United States or Europe. For example. In addition. they can capture opportunities presented by India’s ageing population. Increasing the number of older people in the workforce. 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. Compared to the ‘alternative reality’.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. (That is. The baseline trajectory incorporates a number of positive and negative effects of trends in population ageing.
Implications for government
India’s expanding over-60 population poses an acute challenge for the Indian government. this trend will nevertheless affect businesses and government. the tourism industry could benefit by serving older and financially well off consumers willing to spend more on travel. combined with productivity-enhancing human-capital investment. 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. Consumer-goods companies can also seize opportunities presented by ageing—by developing products that accommodate older people’s changing physiological needs. Expanding retirement and pension schemes to a larger percentage of the population will be critical.) Workforceparticipation rates among this older age group are also assumed not to change. 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. specifically.
Implications for business
If businesses in India begin preparing now.5 percent by 2020 (Figure 1. Current social-welfare schemes in India were designed to serve a select and much smaller over-60 population.6% higher by the end of 2020. since coverage of public-health services is currently low. Formal retirement schemes in India thus remain underdeveloped and cover only about 13 percent of the country’s 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. could create a virtuous cycle.5 percent of GDP (Figure 1. while GDP is 1.9). This rate has been stable over the past few years. based on an expected supply-side accommodation to these trends. including impacts on consumption and labor markets. This assumes that the population above retirement age remains a constant share of the overall population. This is a smaller impact than in the Europe and the US. employment in the baseline scenario is 1. Moreover. The Indian government extended the New Pension System (NPS) from the public to the private sector in 2009. Oxford Economics’ projection expects overall spending on public healthcare to rise to about Rs 3. will place new pressures on government spending and will affect India’s growth trajectory. how to effectively account for this population when designing social-support and public-healthcare schemes. reflecting the slower rate of ageing in the Indian population. ICICI Bank is offering NPS accounts.
5 0.0 0.7: India .8 0.Figure 1.0 2010 2011 2012 2013 2014 2015 2016 2017 2016 2017 2020 Employment GDP
Source: Oxford Economics Figure 1.3 0.8 0.9: Budgetary implications of population ageing Difference between baseline and 'alternative reality' (% of GDP)
1.4 1.2 0.6 0.8 1.6 0.6 1.4 0.2 0.4 0.0 2010 2011 2012 2013 2014 2015 2016 2017 2016 2017 2020 Healthcare Pensions
Source: Oxford Economics
.7 0.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 1.2 1.0 0.9 0.1 0.8: Economic implications of population ageing % difference between baseline and 'alternative reality'
The emergingmarkets surge
The emerging-markets surge
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
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
5 percent in 2010. an increase of 4. a focus on emergingmarket middle class and medical tourism could enhance India’s GDP by Rs 7 trillion (US$155.2 percent to 10. lowcost business models.8 billion) by 2020. South Africa and Bangladesh. Businesses that ignore trade with emerging markets lose a valuable opportunity. China’s share as an export partner increased from 4. and its share as an import partner expanded from 5. According to our research and analysis.9 percent above the current trajectory (Figure 2.8 percent during those same years.9 percent in the same period. infrastructure development.1: Share of global GDP (US$ 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
Source: Oxford Economics
.4 percent to 5. the emerging-markets surge could add about 28.States’ share as an import partner shrank from 6. In addition. looking beyond Brazil and China and seeking growth in countries such as Indonesia.6 percent in 2004 to 6. Nigeria. their own economies miss out on the productivity benefits that arise from trade. Similarly. Companies in India are vying for their share of the pie. Moreover.6). services.2 million Indian jobs by 2020.
2010 13. Russia & India
Figure 2.7% 2.9% 6.7% 7.0% 4.7% 4.8% 5.2% 6.0% 4.0%
.1% 4.9% 3.0% 2.4: India’s Top 10 Commodity Export Partners (as a percentage of total exports)
Figure 2.7% 3.0% 1.4% 4.4% 4.8% 6.1% 2.0% 3.1% 2.6%
2010 10.3% 3.6% 0.9% 5.3% 2.3% 2.8% 2.2% 2.3: India .4% 4.7% 4.6% 3.0% 1.2% 2.9% 6. Brazil.4% 10.0% 18.Trade with emerging economies % (Exports/imports to emerging economies as % of total exports/imports)
60 55 50 45 40 35 30 Exports 1995 1997 1999 2001 2003
Source: Haver Analytics / IMF DOTS
Source: Haver Analytics / IMF DOTS
2007 9.1% China UAE Saudi Arabia USA Switzerland Australia Iran Germany Indonesia Korea Republic (South) Source: CMIE
2004 5.4% 0.1% 4.2: BRICs .5% 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.Figure 2.9% 5.2% 3.0%
2007 9.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.5% 3.5% 14.9% 6.3% 4.6% 3.6% 5.8% 4.3% 4.6% 3.0% 3.0% 4.2% 3.8% 2.1% 3.
has ties in South Africa. is opening branches in China. 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. Central Bank of India (CBI). Bharti Airtel is now a major player in 16 African nations. After gaining a foothold in the domestic market. for instance.25 Indian telecommunication service providers have also extended themselves into other emerging markets. the company opened centers in seven African countries. providing banking facilities to Indians settled abroad. India is a highly attractive business process outsourcing (BPO) services destination. 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. has manufactured affordable advanced cardiac care and electrocardiograph (ECG) machines in India.Areas to watch
Spurred by the rising middle class and rapid urbanization. Latin America and with some boutique houses in Europe. with the sector contributing about 55.27
India has proved its mettle in the services industry. more than 250 Fortune 500 companies have their BPO units in India. Bhutan. GE Healthcare. Latin America and Asia Pacific.2 percent to the country’s GDP. For instance.26
Smaller Indian investment banks have started setting up joint ventures and alliances with counterparts in other emerging economies.
and has recruited 600 associates locally for this new operation. Bharti Airtel. which GE now also sells in developed markets. Indian information technology (IT) companies are extending their reach in Africa. Tanzania and Mozambique. For instance. Edelweiss. which have significantly expanded advisory operations in India over the past decade. Last year. consumer goods and infrastructure. For example. Indian companies are making inroads in emerging markets by replicating tested homegrown business models across sectors such as services.
. Their goal is to counter competition from global banks. entered the African market through its US$9 billion acquisition of Kuwait-based Mobile Telecommunications Co. Indian financial services players are gradually spreading their wings in other emerging markets as well. for instance.'s assets in the continent. a fast-growing Indian financial services group. From manufacturing the cheapest car in the world (Tata’s Nano) to providing low-cost mobile handsets. Indian businesses are experimenting with scaling strategies.
Indian pharmaceutical players.29 And Ford India. India’s largest drug maker by market capitalization. manufacture and commercialize new formulations.33
. are stepping up their expansion efforts as well. called innovative branded generics. in April 2011. while Merck will bring its clinical and product-registration expertise as well as global marketing footprint to the partnership. Bajaj Auto. Some Indian infrastructure companies are seizing advantage of this opportunity—scaling up their operations. For example.Indian companies are now looking to export these low-cost business models in other emerging markets.32 GMR recently also won the bid to construct the US$360-million airport in Male. with the opening of the new terminal at Istanbul Sabia Gokcen International Airport. The venture’s goal is to develop. which enable these companies to develop low-cost but high-quality products.28 India provides multinational companies in industries as diverse as automobile manufacturing and mobile handsets with cheap but high-quality labor and raw materials. in the drug markets of Asia Pacific. Asia and Latin America. entered into a joint venture with Merck & Co. GMR Group became the first Indian company to operate an airport abroad. Eastern Europe.. acquiring design skills and building strong balance sheets to support projects in other emerging markets. the second-largest drug maker in the US. Japan’s Yamaha Motor plans to expand capacity and export motorcycles made in India to Africa and South America. has started shipping diesel and petrol engines to Thailand and the fully built Figo small car to South Africa. For instance. as well as to support industries that supply materials for constructing infrastructure. Under the agreement. Sun Pharmaceutical. including Charles de Gaulle). governments in some of these countries are investing to develop infrastructure assets such as mobile communications and transportation. Latin America. Sun Pharmaceutical will focus on developing and manufacturing products. the Indian arm of the American automobile manufacturer Ford Motor Company. not new to emerging markets. recently topped one million units in exports of its vehicles. For example.31
With increasing urbanization across emerging markets. the market leader in India’s two-wheeler industry. The company has a presence in more than 36 countries in emerging markets such as Africa. the Middle East and Africa. defeating the Aeroport De Paris (which operates airports in the Paris region.
as people emerge from poverty thanks to their nations’ rapid economic growth. Godrej has seized advantage of this opportunity. Sri Lanka and Vietnam. Saudi Arabia. Singapore.4 trillion by 2020. 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. The sizeable population of Indians in Africa gives Indian companies an advantage over global competitors on the African continent. watchmaker Titan Industries decided to focus on 10 countries. despite having a distribution network across 26 Asian countries. developing countries were home to 56 percent of the global middle class. The geographic distribution is striking. It also creates enormous potential for global consumer markets. while the number of households in Africa with discretionary income will rise by 50 percent to 128 million over the same period. driven primarily by the surge in emerging economies. The medical tourism business is estimated to be growing by 40 percent year-on-year. Most such companies and retailers are focusing on markets that have many nonresident Indians. In 2000. The reason: treatment costs can be substantially lower than in neighboring medical-tourism destinations such as Singapore and Thailand.000 foreign patients a year.15 billion in 2030.36
India is gaining popularity as a global destination for medical tourism.000 such patients travelled to India and spent US$997 million on treatments. such as Middle East Asia and Southeast Asia. which educate local residents about the medical facilities available in India. Malaysia.34 Indian consumer goods companies seek a share in these fast-growing consumer markets. Currently. chemists and freelance agents educates. and from Middle East and Africa.35 African consumer spending is expected to reach US$1. India receives more than 100. but by 2030 that figure is expected to reach 93 percent. about 600. The expansion of this middle class provides competition for labor and other resources. facilitates and ferries medical tourists to India from across the world.38
.The emerging-markets middle class
The middle class is growing in emerging-market economies. The World Bank estimates that the global middle class will grow from 430 million in 2000 to 1. In 2008. These hospitals often have facilitation centers in emerging markets. places
culturally similar to India. 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. An ecosystem that includes several hospitals. including Dubai.37 Most medical tourists treated by private hospitals in India come from South Asian Association for Regional Cooperation (SAARC) countries. In 2010.
9 percent above the current trajectory by 2020. trade with emerging markets could boost India’s GDP by Rs7 trillion (US$155. constant 2010 prices (left scale) GDP.8 billion).Creating growth through the emerging-markets surge
The econometric analysis by Oxford economics shows that. Oxford Economics took the novel approach of including the positive spillover effects of trade (such as knowledge transfers and innovation). raising 2020 employment levels by 28. constant 2010 prices (left scale) Employment. owing in part to its high degree of integration in emerging market trade (Figure 2. alternative trajectory (right scale) Employment. but the econometric research finds that trade with emerging markets has the potential to stimulate maximum employment as new demand is created. which is driven by cost competitiveness relative to developed economies. increment in alternative trajectory.2 million in India. To assess the impact of trade with emerging markets on Indian economy. an increase of 4. by embracing the spillover effects.
Figure 2. Concerns are often expressed that opening up trade threatens domestic jobs.6: Potential of interventions to stimulate the emerging-markets surge
150 140 130 120
GDP. current trajectory (right scale)
610 600 590 580
110 100 90 80 70 60 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
560 550 540 530 520 510 500 490 2020
Source: Oxford Economics
GDP (Rs trillion)
. current trajectory. India has the potential to exploit its existing advantage in consumer and intermediate goods.6).
plans to establish a titanium plant in Indonesia at an estimated cost of over US$800 million.40 These moves will help countries harness significant unutilized complementarities in energy endowments—gas. Recent developments augur well for accelerating regional cooperation in South Asia. held in Bhutan in April 2010. Resilience to global shocks will be enhanced if intraregional trade and financial flows are increased.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. the SAARC agreement has the
. The ASEAN-India Trade in Goods agreement. will further increase the opportunity costs of keeping national energy systems isolated. Trimex Sands. such as restrictions on trade and investment. crossed US$1. driven by economic growth and access expansion. hydropower. economies must open trade routes to those markets through international agreements and business relationships as well as uncover and strengthen areas of comparative advantage. Indian companies have already started benefiting from these agreements. India recently signed agreements with Malaysia and Indonesia to increase trade to US$15 billion and US$25 billion. resolved to increase intraregional connectivity. inadequate infrastructure or distribution systems. India urged all member-states to ratify the SAARC Agreement on Trade in Services. by liberalizing tariffs on over 90 percent of products traded between the regions. Increasing energy demand. bringing together 1.
agreements can play an important role in freeing up these flows. coal —within a region and between the region and its neighbors. which came into force in 2006. enhance energy cooperation and expedite implementation of tradefacilitation measures. However. terming it a "big step forward" for increasing trade within the region. They can also deepen their economies’ integration with regional trade areas.Creating the conditions for success
Emerging economies present immense long-term growth potential for businesses operating inside and outside these markets.2 billion. 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. tourism. In February 2011. created the world’s largest free-trade area by population. Economies can further foster regional economic cooperation by forging links between regions’ investments. for instance. trade. To capitalize on growth in emerging markets. labor pools and aid extensions. and cultural and social differences affecting consumer demand. part of the Trimex Group. Bilateral and regional trade
The 16th SAARC summit. Greater intraregional connectivity allows increased transport asset utilization. which lowers costs and tariffs for participating countries through improved port systems and better shipping services. While trade under the South Asia Free Trade Agreement (SAFTA).8 billion people. by 2015. access to emerging markets is often hindered by various factors.
As companies grow across geographic and cultural borders and move up the value chain. where most citizens are vegetarian. non-beef meat eaters can get a Maharaja Mac made with lamb or chicken at a McDonald’s restaurant. growth has been founded on the exploitation of historical and cultural ties between geographies. this traditional strength also presents a new challenge. in terms of the value of its manufactured output. In New Delhi. is the lowest among fast-growing emerging markets. However. but more than 40 percent of its industrial output is produced by small and medium enterprises. communication styles and negotiation approaches.”
must monitor consumers’ changing preferences and tailor their offerings to local cultural norms. Businesses
. laws and business practices. This cooperation is crucial to enabling peace and prosperity for countries in the region as well as the world at large. In many areas. Indian companies must understand and respect those markets’ cultures. for instance—McDonald’s flagship offering—would never succeed in India. India’s manufacturing sector has grown in size and ranks among the top 10 in the world. institutions. India will need to build up its economy’s manufacturing strength. rather than taking a one-size-fits-all approach. however. One global brand that has adapted to local culture and tastes is US fast-food chain McDonald’s Corporation. where 80 percent of people do not eat beef and consider cows sacred. Around 84 percent
Develop sensitivity and respect for other cultures
To succeed in other emerging markets. such as samosas. India may have some worldclass clusters of excellence (such as automotives and pharmaceuticals).potential to grow trade further. As one of our panelists put it. expressed as manufacturing value added (MVA) per capita. “Regional cooperation between Asian countries. offers vegetarian burgers and other Indian dishes. However. which has adapted its products to local tastes. 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. they will face a more diverse set of consumers. will greatly benefit India and the region.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. protocol. both bilateral and multilateral for trade. Big Macs. McDonald’s restaurant in Gujarat.42 To achieve this ambitious target. Many organizations are now providing staff with language lessons and cultural-sensitivity training to address issues such as etiquette. the country’s level of industrialization.
working in tandem with industry peers and policymakers. limited earnings and few growth prospects. owing to factors such as scarcity of land inside cities. value engineering and marketing strategies to local preferences and priorities. The offline model. Bajaj Auto trained roadside mechanics in Angola to fix their bikes. For example. Pearson believes that if it can make a profit in India.43 Small firms often get caught in a vicious cycle of insufficient access to capital. Savvy companies embed their innovation activities into the local R&D and consumer environment.of India’s manufacturing employment is estimated to be in firms with fewer than 50 workers. a British publishing company. because many parts of Angola could not support a proper dealer and service-centre network. involves putting more salespeople on the street and using call-centre agents to help small firms go online and use Google’s advertising platform.47
Be authentically local
To create and develop products for other emerging economies.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. the French cosmetics giant. including poor infrastructure and rigid labor laws. 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.
.46 Similarly. low productivity. for instance.45 Google also plans to test its “offline” model in India before replicating it in other emerging markets. has entered the education market in India. pricing. Few companies have managed to make good money in the vocational training and education business in India. 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. still in the experimental stage. government regulations and shortage of trained teachers. hoping to replicate this model to expand its global
footprint. old technologies.
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. The company is establishing a new R&D hub in India to develop products in India that could be exported to other emerging countries. L'Oréal. Indian companies must understand local consumers and customize product design. Pearson.
For instance. The company’s closer proximity to nonIndian consumers enabled it to adapt its products to locals’ needs and aspirations. The programme focuses on imparting training and skills to local unemployed students with basic education and no work experience in the uMhlathuze district.49 Through this partnership ABG Shipyard Company got access to the rich natural resources. Local partners offer deep expertise and valuable insights into market trends. For instance. consumer preferences.Businesses in India are increasingly taking this approach as they expand their base in other emerging markets. of whom 49 have been employed as operators with Tata Steel. companies build credibility while also deepening their understanding of local markets so they can tailor their offerings accordingly. thus enabling them to enter the mainstream workforce. companies save money. Equally important. Indian ABG Shipyard Company partnered with the Sierra Leone Exploration Mining
. develop new products and increase distribution reach. power distribution and industrial electrification. Dabur International. the Tata Steel KZN (TSKZN) Learnership
Develop mutually beneficial partnerships
Companies should partner with local organizations to source information. L&T will have a 72. it also created new products exclusively for these markets. while SLEMCO benefited from the vast experience that ABG got to this venture. 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. the objective was to get closer to its Indian-origin customers in the Middle East. sub-stations. in 2001. The TSKZN Learnership programme has produced two batches of graduates so far. Larsen & Toubro (L&T) is another case in point.48
Company (SLEMCO) to mine bauxite in northern Sierra Leone in West Africa.5 percent stake in the venture. an area with over 300 million tons of proven reserves of the valuable rock.50
Hire local talent
By recruiting local talent in emerging markets. almost 90 percent of Dabur’s customers are locals—not the Indian diaspora. The joint venture company will look at the engineering. Today. For instance. Expat executives usually command higher salaries and need time to absorb the local culture. and procurement and distribution channels. rural electrification. the company not only modified existing products’ formulations. The two companies have agreed to collaborate on turnkey execution of power transmission lines.
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. when Dabur set up its international arm. L&T will be responsible for the design and engineering of the projects. government regulations. To do so. procurement and construction of high voltage transmission lines and also the associated sub-stations.
Surmounting this challenge requires flexible operating models that combine local knowledge and practices with regional functions and capabilities. The continent is home to almost 15 percent of the world's population but is one of the most underserved places on earth. Godrej group intends to strengthen its presence in emerging markets in Asia. The company has already charted a clear roadmap—“One Africa”—for scaling its Africa operations. used its expertise in one emerging market – India – to tackle another – Africa. based on volume. affordability and inclusive growth. for instance. Africa and Latin America via three core product categories. Bharti easily established itself in Africa by acquiring Zain Telecom's African operations. adaptability and entrepreneurial zeal. If they can avoid stifling these abilities in the quest for scale. Bharti Airtel.
. Companies cannot afford to lose sight of the skills and practices that helped them grow—such as deep local knowledge. Similarly. After operating a volume-based business model in India. can be replicated in other emerging markets. products tailored to consumer needs and constraints.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. they will be well positioned to achieve—and sustain—greater growth in the future.
The multitechnology future
The multi-technology future
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
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
.8 percent above the current trajectory by 2020 • 10.
Indian IT players are competing aggressively with developed-world incumbents in a more interconnected landscape. As more Indians gain access to the Internet. 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. As a result.
. easy-to-use interfaces.Assessing the trend: The acceleration of everyday life
The ICT revolution is catalyzing social and economic transformation in India.14 billion.52 Their goal is to muscle into the domestic business emerging from the manufacturing sector and other sources. 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.
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. As technology costs continue to drop. more than 125 start-up companies have been established in India. Such developments are creating a fastpaced and competitive business ecosystem. economic and social dynamics across the country will change dramatically.51 Falling costs are now complemented by reliable. including connecting the rural hinterland. As one of our panelists stated. and improving standards of living and opportunities across the country. India’s software product exports have reached a revenue level of US$1. 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.1 and 3. 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. But with the traditional IT majors accounting for maximum share. “The mobile revolution is credited with leapfrogging India’s growth in a myriad of ways. enabling innovation and productivity increases.2). In the last three years. especially with the introduction of 3G. with reduced time to market and the ever-present danger that businesses will miss out on market trends. The next revolution that can potentially supplement this is the Internet revolution. The continuing spread of information and communication technologies is making those groups more accessible to companies than ever before (Figure 3. with massive implications for productivity and opportunities for businesses and public-sector organizations. It is connecting people and communities.
a 2. Research reveals that Fortune 500 companies operate 63 captive R&D facilities in India. The core technologies themselves will develop their own markets as they are adopted. they offer a springboard for a major leap forward in almost every area of business operations. Finally.000 8. by investing in skills and widespread technology adoption to harness the technology trend. new technologies can enable new ways of doing business with existing products. it will also launch many new technology sectors. Instead. these hubs partner with local universities and start-ups to build scale and speed in taking cutting-edge ideas to market.000 10. having already increased at almost a 70 percent compound rate over the last decade to reach close to 700
400 300 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
6.54 The hubs aim to design offerings that suit low-income and culturally diverse populations. Technology will not only boost performance efficiency and generate new growth opportunities for the economy.000 4. Estimates by NASSCOM suggest that e-governance is a US$9 billion opportunity in India.53 Companies want lean and nimble innovation hubs in emerging markets that do not take the traditional “captive” route of owning all resources. These moves will also help create 10.2: Fixed line phone subscriptions in India
12.2).1: Mobile phone subscriptions in India
700 600 500
Figure 3.Figure 3. E-governance represents additional potential. Mobile-phone subscriptions continue to grow rapidly. One such mega project is the UID initiative. Sometimes growth stems from the convergence of one technology with another.8 percent above the current trajectory.
Digital goods and services
Rising income levels and increasing levels of consumer awareness are driving demand for digital goods and services across India.
Areas to watch
As technologies mature and are brought to market. as well as foster ancillary markets for related technologies and services. The world's largest biometric project. UID will expand its footprint across several Indian states in 2011 and is slated to generate US$4 billion in new
business by 2015. India can boost its GDP by Rs 4 trillion (US$90 billion) by 2020. Oxford Economics analysis illustrates that.55 Other government and defense segments will also create sizeable opportunities in large systems integration projects for application services.000 2. Managed services around IT infrastructure will open doors to application services as well.8 million jobs by 2020 (Figure 3.000 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.
with most of the demand coming from consumers as well as small and medium enterprises.
growing at a 40 percent compounded rate. The market has responded to the opportunity. The market for cloud computing in India is expected to be worth US$360 million by 2014. Spice. notebook sales will outgrow desktop PC sales in India.
New technologies will open up significant opportunities for rapid growth. the Mifos Cloud is managed through Amazon's hosting facilities and provides commercial-level security.59 Even traditional consumer-durables companies such as Videocon and Onida have launched their own mobile handsets. India’s massive small and medium (SME) business and consumer segments are the main drivers of cloud computing. demand for skilled technicians who can build and repair this deluge of digital goods will almost certainly climb.8 billion.million. owing to its cost effectiveness.5 million in 2009-2010. Karbonn and G’Five have gained sizeable market share through their competitively priced models. The digital goods manufacturing sector in India will continue to enjoy robust growth driven by domestic and international demand. urban citizens with high disposable incomes are increasingly demanding highend handsets. demand for smartphones will only accelerate in the coming years. from the current US$5. skyrocketing by almost 15 times from about 177. Launched by the Grameen Foundation. And with the rollout of 3G mobile services. Recent research reveals that there are more than 200 mobilehandset brands available at retail outlets across the country. Large enterprises are testing the public cloud by initially moving less critical applications to it.58 New entrants like Micromax. 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.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.000 in 2004-2005 to 2.56 The mobile-handset and smartphone market is keeping pace and is expected to be worth US$8 billion by 2016.57 India’s young.
Notebook sales have witnessed equally astounding growth over the past five years.62
.60 Gartner predicts that by 2012. Moreover. availability and disaster recovery to customers at affordable prices.
productive and accessible to marginal and small farmers. emergency communications systems. Reuters Market Light. Banks are already analyzing customer profiles to cross-sell other products. following patent expiry). Armed
. The market for biofertilizers is expected to grow at almost 15 percent compound rate until 2012. Technology will play a critical role in the inclusion of these people in India’s growth story. the domestic market for bio-informatics. Businesses are already facing increased enterprise security risks coming from social networking sites. pictures. information technology and even agriculture has created vital opportunities. telecom and financial services. In addition. As the government looks to enhance public-service provision through e-governance.65
Tech-savvy enterprises can now base key management decisions on large quantities of information—driving development of new services centered on analytics. efficient. although nascent. which have stood outside companies’ reach because of poor infrastructure and lack of connectivity. commodity news and other relevant information to farmers through SMS in local vernacular languages. Bt cotton is the best-known success story. estimated at US$420 million. Estimates suggest that information stored online in India will grow from current levels of 40. which rely on data-driven decision making. 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. financial systems and air-traffic control networks.9 billion and growing at 12 percent. security and privacy will become growing concerns. 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. The Indian biopharmaceuticals sector has been a particularly successful segment. For example. For instance.3 million petabytes over the next decade. and very little is known about the consumption patterns of most of them. 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.000 petabytes (1 petabyte is about 1 million gigabytes) to 2. healthcare.Large volumes of data. biotechnology combined with pharmacology. videos and even complete websites are increasingly being stored online for cost and efficiency reasons. and accounts for more than 80 percent of all cotton produced in India. Companies that previously based decisions on managers’ past experience and business instincts will gradually move toward fact-based decision making.4 million in 2011. is the fastest growing segment in the biotechnology sector. India’s National Cyber Security Policy identifies indigenous development of IT goods as vital for fighting threats from imported high-tech products.69 Meanwhile.70 The plan is to establish a national identification infrastructure through a biometric platform (iris and fingerprint scans) for the entire Indian population. combating fraud and maximizing public services.68 Bio-agriculture can help tackle India’s food-shortage problems. music. reliable infrastructure for public and private service provision.64 India’s government is seeking to build its competency in business intelligence and analytics. while telecom companies are examining usage patterns to market new plans and services to subscribers. But with the availability of so much data.
The convergence of two or more different technology fields generates innovative solutions across industries. The service will deliver spot crop prices. is expected to receive a huge push owing to the UID programme. it identifies at-risk proprietary technologies and encourages open standards to cut down the risk of dependency on proprietary IT products. estimated at US$50. Forecasts suggest that the Indian business-intelligence technology market will generate revenues of US$65.2 million. Business intelligence and analytics will be critical for companies in sectors such as retail. boasting revenues of US$1.66 Indian biotechnology major Biocon’s biopharmaceuticals and chemical formulations business has been the main force behind its high profit and revenue growth. and providing a safe. The goal is to provide farmers in Tamil Nadu with real-time market information for a duration of one year for free. has captured attention because these products are economical. Security is an
varieties. the UID programme will try to forge links between citizens and services—improving access for excluded parts of the population. 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. eco-friendly.63
even bigger worry for governments as IT infrastructure supports critical national assets such as power grids. The biopesticides and biofertilisers market.67 The bio-agriculture market segment in India. India has a billion-plus consumers. mobile devices and cloud platforms. The UID programme will make available huge volumes of consumer data that the government plans to analyze to improve efficiencies in collecting taxes.
the major breakthrough will be in micro-savings banking products using technology.” Recent estimates suggest that the market for mobile VAS will exceed US$4 billion by 2015. SnapDeal. These sites bring customers together socially and harness groups’ bargaining power to negotiate large discounts on products. mobile-commerce solutions.with such information. India’s mobile-telecom revolution has sparked the emergence of companies offering a variety of value-added services (VAS). MyDala and Koovs are growing quickly and attracting additional players into this segment. The introduction of 3G mobile services will accelerate the VAS market’s
. for example. Mobile-commerce company mCheck India.71 Technology is bringing to life whole new business models that previously would not have been profitable—or even possible.72 One of our panelists commented that “although at present microcredit products are more known. Ventures like Taggle. farmers stand a better chance of avoiding distress selling of their crops. mobile advertising and content management. Meanwhile. The Internet acts as an aggregator that benefits consumers and merchants alike. Companies will increasingly offer a range of services such as content aggregation and distribution. One such phenomenon that is rapidly gaining popularity in India is group-buying websites. is collaborating with micro-finance institutions to implement mobile payments in the micro-credit sector. Some will even partner with companies outside the telecom value chain to tap the bottom of India’s population pyramid. because they know when the demand and the prevailing market prices are high.
current trajectory (right scale)
610 600 590 580
110 100 90 80 70 60 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
560 550 540 530 520 510 500 490 2020
Source: Oxford Economics
GDP (Rs trillion)
. India can boost its GDP by Rs 4 trillion (US$90 billion) by 2020.
Figure 3. The alternative trajectory incorporates the effect of sustained. constant 2010 prices (left scale) Employment. constant 2010 prices (left scale) GDP. cloud computing and analytics will not just create new sources of demand in India but will give birth to new business and service models. alternative trajectory (right scale) Employment.8 percent above the current trajectory. targeted improvements in education and training policies for the high-tech sector.3). current trajectory. 2.8 million by 2020 (Figure 3.3: Potential of interventions to stimulate the multi-technology future
150 140 130 120
GDP. This translates to a lift in employment levels by 10. increment in alternative trajectory. Next generation technologies like mobility solutions.Creating growth through the multi-technology future
The econometric modeling by Oxford Economics illustrates that. by investing in skills and widespread technology adoption to harness the multi-technology trend.
Indo-US Science and Technology Forum and Intel. The venture set up 23 outdoor computer kiosks in some of the poorest slums in India. and without instruction. Intel provides technology training and a global platform for the initiative. providing concessions of up to 25 percent on capital expenditure to domestic manufacturers. effective in July 2010. This creates a virtuous cycle in which higher productivity lowers production costs and prices. children began browsing the Internet. investment and job creation. The government is also establishing disincentives for non-renewable energy producers. and the computers were connected to the Internet. The tax levied on export and manufacturing of coal.Creating the conditions for success
India’s future workforce must fully embrace the digital world. The government plans to channel these funds to establish new electricity-transmission lines and clean-energy projects. enhancing consumption. The goal is to build an entrepreneurial ecosystem in India. Consider Hole-in-the-Wall Education. The Indian government recently restructured its semiconductor policy to offer special fiscal incentives for the industry.74
Creating smart regulatory standards
Systematically building industry standards can facilitate the rapid uptake of a new technology. Instead of a mouse and keyboard. Another example is the joint technology entrepreneurship programme between India’s Department of Science and Technology (DST). Monitors protruded through holes in the kiosk walls.75 Incentivizing growth of the semiconductor sector will help India cement its position among leading IT and electronics hardware manufacturers. Within hours of installation. will raise an estimated US$555 million in 2011. there were specially designed joysticks and buttons. Widespread digital literacy is critical for amplifying technology’s impact on productivity and innovation across the wider economy.76
. Adoption of new technologies relies on regulation to provide stability for businesses and public services along with assurance of data privacy for consumers.
Build digital literacy and skills
Availability of digital skills is vital to the growth of India’s hightech sector and overall economy. while also supporting India’s solar-energy capacity-expansion plans. where children never had access to a computer. a joint venture between Indian education major NIIT and the International Finance Corporation
(a part of the World Bank Group).
Aadhaar is therefore paving the way to include small farmers.77 By the end of 2011. Every beneficiary family is issued a biometric-enabled smart card containing their fingerprints and photographs. which provides families living below the poverty line with insurance coverage. Empowered with bank accounts. Proving one’s identity—to get social aid and open bank accounts—can seem impossible for this marginalized section of the population. • Health and education: Aadhaar numbers will help track health and education records across the country. Meanwhile. The Unique Identification Authority of India has undertaken Aadhaar. For instance. as well as enable the poor to gain access to basic services through vouchers linked to their UID. poor farmers and landless laborers often lack any kind of identification document. Enrollments under Aadhaar have reached almost 6 million since the programme began in August 2010. Aadhaar will issue every resident a unique 12-digit identification number based on fingerprint and iris scans. With health records stored against each UID. It will also deliver tremendous opportunities to businesses and the government. Another example could be the Rashtriya Swasthya Bima Yojana. new enrollments will happen at the rate of 1 million every day. microentrepreneurs and poor women in the country’s organized monetary system. wages under the National Rural Employment Guarantee Scheme could be transferred directly to a UID-linked bank account and withdrawn only through UID authentication. given the size and demographic complexity of its population. If the UID data could be added to the chip mounted on the card. Only about 50 percent of India’s population today is covered by the four major identification programmes.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. The system will help educators track school dropouts and migrant students. 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.78
. hospitals will be able to track historical records of patients to provide accurate diagnosis and treatment. Aadhaar will make India a world leader in identification management and biometric technologies. • Public-service delivery: Aadhaar will ensure that benefits reach the right beneficiaries in a predictable and timely manner. Migrant workers. peasants. Financial institutions will have a more accurate picture of poor households’ cash-flow cycles and repayment capacities. Residents will not require any identification document. imprinting the UID number on students’ performance records will help prospective employers and educational institutions verify authenticity. 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. the poor can begin building up their savings and gain access to new forms of credit. • Opportunities at the bottom of the pyramid: Having unique identities will promote financial inclusion for people at the bottom of the pyramid. improving these at-risk individuals’ access to education. families below the poverty line could validate their identity to obtain governmentprovided grain at India’s fair-price shops. who make up most of the 400 million Indians living below the poverty line. a national identification infrastructure that will be established through a biometric platform for the entire Indian population.
bioinformatics and robotics. The company recently launched a webbased live-chat feature. Tata Docomo. and in return.82
Share digital literacy
Full integration of new technology requires a variety of skills in the workforce at a range of levels. the Open Source Drug Discovery (OSDD) Consortium. social networks and enterprise wikis can spread the necessary expertise cheaply and effectively as well as bridge generational gaps in working practices. “Reverse innovation” is also on the rise. They are analyzing customer needs before deciding what technology to deploy. 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. India’s 2.80 Nivio’s cloud-computing platform lets users store files online. India’s largest mobile telecom operator. The feature allows new and existing users to ask questions and provide feedback in real time.5-million-strong IT workforce will expand to almost 10 million over the next decade. a different innovation hub for a different type of innovation for a different type of market. Bharti Airtel. The telecom giant recently launched this service offering under the brand name of Airtel Online Desktop. such as cloud computing. have benefited from these stakeholders’ ideas—strengthening technological capabilities across the industry’s value chain. brings together scientists from across the world to collaborate on ways to hasten the drugdevelopment process. vendors and customers in their innovation process—is attracting interest in India.
. for example. As more of India’s low-income consumers demand pay-per-use services. They are increasingly shifting idea incubation to locations like India to create relevant products for their emerging-market consumers. They have nurtured capabilities in local auto-parts companies and OEMs. Although India has a strong IT talent pool. However. Indian IT major Wipro recently launched the Wipro Hospitality Management Solution. has already signed an agreement to offer Nivio’s software solutions to its customers on a monthly rental basis. rent applications and access the features of a desktop through a normal web browser—all at a price as affordable as cable TV. companies will have little choice but to shift to clouds. Automobile companies in India provide exceptional examples. from basic digital literacy to more advanced technical skills. cloud computing will help Indian entrepreneurs and SMEs compete with larger organizations. the telecom service provider. is an apt example. the first in its industry. Offering all these advantages.83
Harness technology to serve customers' needs
Indian companies recognize the importance of putting the customer at the centre of their technology agendas. whereby ideas originate in emerging markets before being sold into the developed world. Knowledge-sharing schemes such as mentoring.79 and will prove an advantage for companies seeking to engage in these new technology areas. India needs many more formal training institutions.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. Major Indian IT companies can leverage their outsourcing experience to build viable cloud-computing and virtualization business models.
Embrace the cloud
Purchasing IT solutions as a service enables companies to enter new markets rapidly. and to share files during the sessions. minimize sunk costs and benefit from cuttingedge software. The government is trying to bridge that gap through skills-development programmes. which helps them justify technology investments to the shareholders.
Create open innovation networks
Open innovation—whereby companies involve stakeholders such as suppliers. launched in 2008 by India’s Council of Scientific and Industrial Research (CSIR). In the pharmaceuticals and biotechnology fields. a wide gap exists in terms of other technical skills.81
Use technology to pursue polycentric innovation
Multinational companies are pursuing “polycentric innovation”—choosing locations for innovation based on the markets served.
The resource economy
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
• 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 • 0.000 additional jobs by 2020
.3 percent above the current trajectory by 2020 • 821.The resource economy
Areas to watch
• Intelligent energy • Alternative energy • Green infrastructure • Food processing and agribusiness • Water.
Meanwhile.3). In an attempt to meet the need. Thanks to new technologies and other innovations. It could also generate 821.Assessing the trend: The drive for resource efficiency
As the world’s resources—land.6 million barrels per day (MB/D) in 2000 to 2.3 percent above the current trajectory (Figure 4. The Oxford Economics model shows that. The India’s agriculture sector is facing intense pressures. India’s oil-import volumes increased from 1. the quest for resource efficiency can fuel economic growth and job creation. New areas such as renewable energy.1). while also overhauling the country’s energy infrastructure through technologies such as the smart grid to improve supply efficiency. skills development. While companies in the food processing business have sought to expand capacity. with appropriate regulation. the manufacturing sector consumes about half the country’s
energy generated for industrial use. Energy intensiveness in Indian industries counts among the highest in the world. food and minerals— grow scarce. increased risk of diseases and pests to plants. water. to reach 140 billion cubic meters (BCM) by 2050. threat from changing weather conditions. this sector could raise India’s GDP by Rs 458 billion (US$10 billion) by 2020.
.000 new jobs by 2020 and boost India’s structural transformation (Figure 4. India must explore alternative resources. Population growth and urbanization are contributing to water scarcity. fresh sources of growth are unfolding in this sector. India faces an uphill battle to secure its resources for the future. investment incentives and technology spillovers. infrastructural inadequacies and regulatory bottlenecks have slowed the effort. India would also need to increase its gas imports quickly.5 MB/D in 2009 and are expected to reach 14 MB/D by 2050. energy. 0.84 To prepare for the future.2). With India’s GDP expected to grow at an average of 8 percent per year over the next decade. particularly after 2020. resource consumption in India is set to expand further (Figure 4. Agriculture and agribusiness sectors are working on next-generation solutions in collaboration with sectors such as
biotech and IT meet rising demand. solar and nuclear. If approached imaginatively. Our research and analysis show that the green sector could do more than just help India address resource shortages. The green sector will also enhance GDP by serving domestic and export demand. the same trends are causing demand for food to soar. green infrastructure and food processing will generate significant employment opportunities for individuals possessing traditional and new skills. due to growing demand. Uncontrolled and unregulated use of groundwater has lowered water tables. The Indian government is working to expand supplies of alternative energy sources such as wind. source traditional resources from new locations and leverage efficiencyenhancing technologies. Accounting for one-fifth of India’s GDP.
hydro-power. The smart-grid market in India is still nascent.000 such smart meters in the state of Maharashtra. which send energy-usage data in real time to meter owners through Google.0 10.0 15.0 5. and can prioritize usage of green electricity sources. Smart meters can also send consumption statistics to the grid.0 20. 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. User can manage their power usage from a remote location.85
India wants to reduce its dependence on non-renewable energy sources. with India ranking ninth in the world in terms of number of operational reactors.0 30. At present. choosing when to switch off the meter.0
25. India had 20 nuclear-power plants generating 4. energy. 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 2012.0 0. Reliance Energy has installed more than 20. which can use the data to regulate loads more efficiently. 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. Alternative energy sources such as wind power. one of the highest in the world. Rural/agricultural areas suffering acute power shortages can
. energy losses during transmission and distribution in India exceed 30 percent.780 megawatts
Intelligent-energy solutions will promote India’s low-carbon agenda while also addressing its inefficient power supply. As of 2010. consumer products. Smart grids intelligently gather and analyze consumption patterns to control distribution and reduce theft.1: Total Primary Energy Consumption in India
40. infrastructure and automotive sector.
have adequate and reliable access when each user is mapped on a smart grid. Nuclear power is the fourth-largest source of electricity in India.0 35.0 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. only a few public-sector utility companies have launched pilot projects to test the technology’s suitability. Wind energy is one of the fastest-growing alternative-energy sectors in India.
Recent research by The Climate Group estimates that India’s wind-energy sector could create as many as 250. Meanwhile. for instance.90 Tata Power. The India-US civilian nuclear deal is a major step toward establishing a strong nuclear-power capability.
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. The Jawaharlal Nehru National Solar Mission.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.89 The government also plans to deploy 20 million solar lighting systems in rural areas by 2022.000 jobs during the same period.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.000 MW of nuclear power by 2020. NTPC has set a target of generating 2.5 GW by 2015.000 trillion kilowatt hours (KWH) in sunshine each year. from less than 60 MW in 2005 to more than 1 gigawatt (GW) in 2009. The solarenergy sector could create another 235.2: India . exporting close to 75 percent of its total production to markets in the EU. intends to increase its solar-power generation capacity tenfold within a year to achieve its target of 40 MW by March 2012. The country plans to increase nuclear-power output to 63.92
India has abundant solar resources.91 India’s production capacity for solar photo voltaic (PV) systems has grown multifold. 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. nuclear-energy major Areva plans to build six next-generation reactors over the next few years. India is also set to become a major manufacturing hub for the global solar PV market. aims to deploy 20. a solar-energy government initiative.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 MW by 2032. and is expected to reach 2.Figure 4.000 MW of solar power by 2022. receiving the equivalent of more than 5.000 additional jobs by 2020. The solar-energy agenda is also accelerating expansion plans in ancillary industries such as semiconductors.
is benefiting from strong domestic demand. and recently received an order from Caparo Energy to set up 1. Asia's fifthlargest wind-turbine manufacturer. It has also contracted with 22.93 Suzlon.In addition. As one of our panelists pointed out. “The next big jump in GDP growth will come from agricultural and rural reforms and there is a long pending agenda there. To capture this huge opportunity. In Rajasthan.96
Food processing and agribusiness
India’s food-processing industry is evolving rapidly. Pepsico has partnered with 1.000 MW by 2013.97
. The Ministry of Food Processing estimates that this market will be worth US$70 billion by 2015. barley. Suzlon is creating demand for a wide variety of ancillary manufacturing parts such as gearboxes and drive shafts. rice. tomato and chilies.500 MW to more than 17. India will be a major manufacturing hub for wind turbines in Asia.94 In turn. Meanwhile.” Expanding contract-farming engagements in India indicate the employment that the food-processing sector can create. India’s green building products and technologies market is expected to hit US$100 billion by 2012.000-MW wind projects through March 2013.063 projects in the pipeline with a green footprint of 636 million sq ft. Annual production capacity will rise from the current level of 7. while the green-building footprint will likely increase to 45 million sq ft by 2012. increase value addition from 20 to 35 percent and double India’s share in global food trade to 3 percent—all by 2015. rapid urbanization is driving new demand for energyefficient residential and commercial buildings. And with 80 percent of India yet to be built. Pepsico started contract farming with potato growers in the state of Punjab in 2001 and is now doing so in eight other states.200 farmers to cultivate barley in a partnership tie-up with the United Breweries Group. 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. the ministry has set targets to raise the level of perishables processing from 6 to 60 percent. owing to the changing lifestyles and rising disposable incomes.000 farmers to procure potatoes. the next two decades would present a huge opportunity for the construction sector as well as related sectors such as cement and steel.95 There are
organic and inorganic pollutants. The total capacity is expected to increase tenfold in the coming decade. As acknowledged by the Indian Ministry of Environment and Forests.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. India will need around 1. a changing climate and growing water scarcity will put a premium on efficient land and water use.852 KL of water. 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. recycling and engineering. investors injected US$160 million in 17 companies that specialize in water and waste management.500 BCM of water by 2030.98 Estimates suggest that India’s total water demand will double between now and 2030. and its sewage-treatment plant recycled 6. For instance. It also recycles all the water used in the facility.492 kilolitres (KL). the company’s stormwater pits recharged groundwater by 5.
In 2008-2009.102 The building harvests all of the rain that falls on the structure. Indian businesses are actively tackling water conservation and recycling. located at Gurgaon. to tertiary standards through its sewage-treatment plant.000 sq ft ITC Green Centre.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. Meanwhile. 70 percent of India’s surface water resources and a growing percentage of its groundwater reserves are already contaminated by biological. reaching 10 GW by 2020. the 170. is the world’s largest zero percent water discharge. including waste water.Logistics and warehousing companies are also proliferating around major agricultural hubs across the country. reducing costs and—more important—water usage.
Waste.101 A large portion of this investment will go into R&D.99
Newer sources of water are scarce. The government has stipulated the creation of two million tons of additional storage for agricultural produce through modern silos. and at the current rate of increase it will have a supply of just 744 BCM. toxic. water and land management
Land degradation. Between 2005 and 2010.104
. noncommercial green building. so the water-treatment and -management sector will need to step up. crop and animal waste in rural India has traditionally been used to generate biomass electricity on a small scale.
6 trillion cubic meters. currently produces 35. 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. this initiative could turn India’s current energy picture from deficit to surplus.109
Hybrid and electric vehicles
India is steadily gaining a reputation as the global hub of fuel-efficient cars. To enter the electric-vehicle (EV) market.110 Mahindra Reva is coming out with two four-seater electric cars under the names NXR and NXG.5 million cubic meters a day through 500 drilling wells over the next two to three years. More futuristic technologies. another relatively new fuel alternative.000 units per year. thought to be around 4. It plans to invest US$300 million to increase production to 3. 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. Coal-to-liquid technology. Scientists at the Institute of Chemical Technology (ICT) are searching for algal strains that can be used to develop next-generation biofuels.000 cubic meters of gas per day from its 33 drilling wells. This is the first significant shale gas reserve found outside the US and Canada. a steep increase in vehicle ownership. which uses domestic coal reserves.107 Coal-bed methane (CBM). particularly hybrid cars.108 Essar Oil. It plans to establish a new plant with a production capacity of 30. is also attracting interest in India. more than 15 percent per annum. a
major player in this segment.105 If successful. offers another sign of hope because it may help reduce India’s reliance on oil imports. 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. will play a critical role in reducing dependence on oil. India’s Oil & Natural Gas Corporation (ONGC) recently discovered the first shale gas deposit in the country in the state of West Bengal. However. 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. the Mahindra group acquired electric-car manufacturer Reva in May 2010.Alternate fuels
As fuel prices continue to rise. It is also developing a
. Shale gas may be one such alternative fuel.106 Meanwhile. 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. The country has one of the largest estimated reserves of CBM. other research efforts are exploring additional alternative fuels. Initial estimates from US mining major Schlumberger has pegged the gas reserves at this site at 300 trillion cubic feet. will pose a significant threat to Indian’s transport system and the environment overall.
The Oxford Economics modeling shows that. current trajectory (right scale)
610 600 590 580
110 100 90 80 70 60 2010 2011 2012 2013 2014 2015 2016 2017 2018 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). water treatment. the green sector could boost India’s GDP by Rs 458 billion (US$10 billion) by 2020. carbon capture and storage. investment incentives and measures to induce greater technology spillovers.3 percent above the current trajectory. The potential of the sector could be improved. constant 2010 prices (left scale) Employment. carbon finance. This translates to lifting employment levels by 821. the
trajectory by 2020. however. investment incentives
GDP (Rs trillion)
. increment in alternative trajectory. skills development. investment incentives and technology spillovers. with appropriate regulation. waste management. 0. 0. with pro-green regulation combined with skills development. energy management.3 percent above the current and technology spillovers. buttressed with an appropriate blend of regulation. To model the impact of the green sector on the economy. environmental consultancy and recycling as well as renewable energy companies and those involved in emerging low-carbon activities (such as alternative fuels. This translates to a lift in employment levels by 821.3: Potential of interventions to stimulate the resource economy
150 140 130 120
GDP. current trajectory. constant 2010 prices (left scale) GDP. 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. and green building technologies).
Figure 4.Creating growth through the resource economy
The econometric analysis by Oxford Economics shows that. alternative trajectory (right scale) Employment.000 by 2020. skills development.000 by 2020. This definition includes “traditional” environmental businesses dealing with pollution.
the Japanese power-equipment maker. It thus provides a chance for companies to build next-generation capabilities without having to manage legacy systems. is keen to partner with BHEL to tap its experience in manufacturing electric buses and electric locomotives. Mahindra & Mahindra’s acquisition of Korean SUV maker SsangYong will further strengthen its electric. companies will need to rapidly develop large-scale green-infrastructure capabilities. India should address the infrastructure shortages currently constraining resource-related growth opportunities. Signs look promising. To support technology development.hybrid version of its popular SUV. the Scorpio. India’s biggest power producer. Toyota.and hybrid-vehicle projects.111 India’s Ministry of Natural and Renewable Energy announced a US$21 million incentive scheme.
Investing in next-generation technologies
Investing in next-generation technologies can help India catch up with developed-economy competitors in the resource arena. As suggested by our analysis. there is an urgent need for investment incentives and technology spillovers to realize this growth potential. To bridge the supply-side deficit. For instance. is in talks with Toshiba. to build a pilot project in India aimed at
. It is still nascent compared to other developed markets. for its part. 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. NTPC.112
Creating the conditions for success
India’s resource economy has significant growth potential and abundant opportunities for the private sector. 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.
concessional custom duty and power buy-back from states. SELCO Solar. last year committed US$1.
scheme for wind-power projects. accelerated depreciation. Of this. and has serviced and financed more than 115. and the Adani Group.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. industrial.2 GW in the Gulf of Kutch. and will help reduce climatechange effects of coal-based power plants. provides solar-energy solutions to underserved households and businesses.
As these companies expand operations beyond geographical boundaries. This money will contribute to a new Clean Energy Fund. development of an autonomous green-power system and promotion of greater use of mobile technologies to grow wealth in rural communities. Reliance Industries recently partnered with BP to get access to BP’s technology. windpower projects have received many concessions. a not-for-profit organization established in India in 1995. Its services span the value chain—from creating awareness
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. NTPC. the market for green technologies is expanding. their clean.000 solar systems since its inception. such as a 10-year tax holiday. a government-owned nonbanking financial company. It introduced a tax of US$1 on every metric ton of coal produced or imported into India. the government will establish a Green Bank using the US$500 million raised through the national Clean Energy Fund annually. Educational institutions and academia are keen to help shape the future resource economy. The government wants to promote private participation by subsidizing 50 percent of the cost of demonstration tidal-energy plants. which plans to increase its capacity from the current 30.
. the projected investments in power generation during India’s 11th plan period (20072012) are US$133 billion. the private-sector contribution is expected to be around US$37 billion or 21 percent.113 In 2010. private-sector participation will likely be higher— about US$60 billion (35 percent of the total capacity addition). In addition. and metals and mining.6 billion to build mining-related infrastructure in Indonesia.118
Create incentives for firms
Incentives are needed for private investment in resource exploration and generation. oil and gas. The company intends to import the same quantity of coal from Indonesia.115
Develop energy-conserving products and services
Be it the semiconductor industry that supports the solar PV systems market. Tata Power holds a 30 percent stake in two of the country’s largest coal mines. cost-effective technologies can also help exploration companies improve productivity. 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. The companies should also benefit from government incentives to increase production of renewable resources. For instance. Meanwhile. 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. India’s biggest coal importer. India has also been trying to build tidal-power plants. For instance. For instance. 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. A recent study found 7 GW of potential in the Gulf of Cambay and an additional 1. For the 12th plan period (2012-2017). commercial and non-commercial entities. BP will help Reliance Industries to maximize the performance of its existing blocks with the help of its superior technologies. or green-building construction companies. hopes to import 5-10 million tons of coal from Australia in the next three to five years. The private sector has already announced a planned capacity increase of nearly 100 GW over the next six to seven years. A variety of new. For instance. The new entity would likely work in tandem with the Indian Renewable Energy Development Agency (IREDA). Projected financial outlay for this scheme under the 11th plan period (2007-2012) is estimated at US$90 million. both located in the state of Gujarat.1 cents) would be given to eligible projects for a maximum period of 10 years. Companies are forging strategic alliances and key partnerships with suppliers and even competitors to secure resource supply in the long term.50/KWH (1. stakeholders throughout India must collaborate with each other and with external partners. iron ore and other assets abroad in sectors such as power generation. The first 5-MW carboncapture plant in India will be set up by 2016. energy-efficient operations will help them gain access in developed economies and avoid stringent environmental regulation.000 MW by 2017.000 MW to 75. 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.116
Diversify supply sources
Intensifying demand for resources and concerns about future resource security are motivating Indian companies to scout for coal.capturing and storing carbon emissions. which can help Reliance make the most of its exploration assets. NTPC also plans indigenous development of next-generation super-critical and ultra-super-critical power-plant technology that will significantly reduce CO2 emissions. 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. An incentive tariff of Rs 0.
They can also work with regulators to educate other stakeholders. A technological
Shape pro-growth approaches to regulation
India’s regulatory environment remains underdeveloped with respect to green technologies and alternative energy. helping to provide food.120
The Ministry of Environment and Forests in India is helping to advance such efforts. and with regulators. But to help create a regulatory environment favorable to growth. rather than penalizing companies for not meeting fixed emission-reduction numbers. including customers and investors. They will grant emission-reduction permits to companies that reduce emissions. thereby reducing diesel consumption by more than 70 percent. 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. uses and recycles waste. Polluting companies can choose to reduce emissions or buy permits through an auction. animal waste– is available in enormous quantities. Such systems could make up for the absence of grid electricity supply in many remote areas in India. about the value of sustainable business models. In India’s large agrarian economy. with the scientific and academic communities. Companies thus have an opportunity to shape such regulation in partnership with policymakers. agricultural residues. biomass – wood. and reduces air pollution. they are must-haves.119 Even consumer-durables companies are developing products that use less electricity than ever before.about solar-energy benefits to persuading commercial and rural banking institutions to finance sustainable energy systems for lowincome rural households. over 40 percent of India’s total energy requirement is met through biomass burning. The producer gas is fed into the diesel engine. allowing the engine to operate in dualfuel mode. raw materials and energy. System administrators will take into account the different scales of emissions. TERI’s biomass gasifier requires less expensive diesel. Indeed. Energystar ratings are no longer good-tohave features.
innovation developed at TERI gives consumers the option of using diesel or producer gas. companies can transform waste into assets. businesses must engage with each other. The Energy and Resources Institute (TERI)’s biomass gasifier system uses biomass for power generation.
Turn scarcity into abundance
By using resources in creative ways.
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. because India’s rising incomes and rapid economic growth will almost certainly continue to bode well for business. Those who cling to old strategies and focus exclusively on traditional drivers of business growth will find the future challenging and alien indeed. 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. And they are uncertain.The last word
Ask business leaders today for their assessment of global economic prospects. From the surge of emerging markets and demographic shifts.
. individuals and governments respond to these new opportunities today. They are optimistic. the economic horizon seems both foreign and promising for many of India’s business leaders. 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. Amid this uncertainty. India’s business leaders take a similar mixed view of the future. technology’s accelerating impact offers firms novel ways to tap these new opportunities. new demandand supply-side drivers of growth are taking shape. What is now clear is that future success will hinge on how well businesses. Simultaneously.
2009. “Monetary tightening to pull down India's GDP to 8. March 23. 53 Harvard Business Review Blog. 5 The Economic Times. “Yamaha to make India an export hub”. 2010. 56 ITU & TRAI data. 19 Express Healthcare. 39 Wall Street Journal. 2011. May 04.in. 6 Strategic Plan. 85 Voice & Data. 21 The Economist. 91 Financial Chronicle. December 23. “India’s elusive $150 billion nuclear-energy market”. 80 Information Week. “Tata Power to Boost Renewable Energy Capacity” April 27. 2011. July 19. September 17. 8 Economic Survey of India. 81 Accenture. 2010. 46 Mint. 2010.2%: IMF”. 72 Mint. 22 Business Standard. “ASIA 2050 – Realizing the Asian Century”. February 11. July 28. “Tata Docomo Launches Web Based Live Chat Customer Care”.com. 45 Warc. 27 Financial Times. 2011. 41 Financial Times. “Microfinance on mobile: mChek says it has the key”.Leone in bauxite mining venture”. Biotechnology. 44 Why are emerging markets the new mantra for Indian companies?. “Watch: India Healthcare Awards”. 86 Mint. 29 Mint. 3 The World Bank Website. “UIDAI gets Rs 1900 crore budget allocation”. 33 The Times of India. Biotechnology. 2011. 78 The Times of India. 59 VCyber Media Press Release. January 27. 2011. “GMR is first to operate airport abroad”. 20 Rashtriya Swastha Bima Yojana Website. April 2011. “Central Bank of India eyes UAE in expansion drive”. “New venture seeks to start low-cost rural hospital chain”. 2010. “Navigating cultural differences”. 11 Reserve Bank of India Website. January 26. 2011. February 2011. April 16 2011. July 29. 2011. 26 Khaleej Times. 66 India Brand Equity Foundation. “GMR wins bid to develop Male airport”. 2011. October 2010. Bloom. “India aims at doubling exports to $500 bn by 2014”. April 2011. “Google goes offline to get small cos online”. 71 The Hindu. “India’s $555 Million Coal Tax May Fund Electricity Lines”. March 23. 76 Think India Foundation. June 2010. “India-EU: Creating Complementing Value”. August 19. “Preparing for a Demographic Dividend”. November 30. 2010. “L'Oréal adapts in India”. Department of Commerce. 68 India Brand Equity Foundation. 40 Asian Development Bank. 36 Mint. 2010. 32 The Hindu. 28 The Hindu Business Line. July 2008. 92 DARE. September 23. “Indian BI technology market to grow by 16% in 2011: Gartner”. 15 Money Control. 2010. 2011. Mobile handset and smartphone market will soar: Frost and Sullivan. 54 Indovations. while Desktop Sales remain flat”. September 2010. “Lessons from a frugal innovator”. 2009. 38 Business World. “New Cloud in India”. 73 Voice & Data Magazine. February 2011. 2011. Accenture analysis. 10 David E. 2010-11. February 2011. 79 NASSCOM Press Release. 24 Haver Analytics.References
1 NDTV Profit. February 3. March 23. 2011. World Health Opportunity. 63 The Economic Times. 35 World Franchise Associates. 62 CTO Forum. 2 Asian Development Bank. 13 Commodity Online. June 12. January 4. 34 The New Global Middle Class: Potentially Profitable—but Also Unpredictable”. 64 Search business intelligence. 2010. May 2010. “Indian company partners S. 2010. April 2011. 61 The Economic Times. 84 Asian Development Bank. 87 Market Watch. 2010. October 31. 49 Worldal. 2010. “Aadhaar: Target to enroll 600mn on schedule” March 11. finds Frost & Sullivan”. 52 Techgig. 69 European Business and Technology Centre. 89 Ministry of New and Renewable Energy website. 2011. April 10. 23 Economist Intelligence Unit. Why are emerging markets the new mantra for Indian companies?. 2011. January 2010. Government of India. 82 Techie Buzz.5 million”. Healthcare. June 29. 18 India Brand Equity Foundation. 58 CMR Press Release. April 1.in. 88 Business Standard. 30 The Economic Times. “Xerox Integrates India into its Global Innovation Network”. March 2011. 2011. 47 The Economic Times. 12 Reserve Bank of India Website. April 2011. 42 Department of Commerce. “BRICS to trade in own currencies”. January 27. 9 Economic Survey of India 2010-11. “Bajaj Auto's exports cross 1 million”. January 11. February 2011. September 12. 2011. 2010. Africa”. 2010. “Smart Grid”. 37 The Times of India. April 2009. “India’s Clean Revolution promises employment to 10. 2010. Figo to S. May 3. “Notebook sales triple in 4 Years. 2011. Tech Mahindra commences BPO operations in Philippines recruiting 600 associates. May 25. “Future Trends in Healthcare Industry in India”. 4 World Economic Forum’s Global Competitiveness Report 2010-11. 83 Open Source Drug Discovery website. May 2. September 24. 60 Trak. 31 Business World. 2010. 2011. 67 Biospectrum Asia. 2010. October 2009. “NTPC. January 2011. 2011. NPCIL form JV for nuclear power projects”. April 5. 2011. September 2. 74 Intel website. April 25. March 25. 51 International Telecommunication Union and Telecom Regulatory Authority of India website. “L&T forms JV for T&D in S Africa”. 90 The Wall Street Journal. 2010. “Wipro Technologies launches cloud-based hospitality management system “. February 26.com. 48 Tata Africa website. “India-Indonesia Deals Signal Trend”. August 25. 70 India Brand Equity Foundation. 2010. Indian Retailers Aim to Expand Global Presence. 7 strategy+business Magzine. 43 ADB. “Innovating for High Performance in India”. South Asia 2011–2013. November 2010. 2011. “India Solar Photovoltaic Market Shines Bright as the Government Encourages Private Investments. 2011. April 6. 57 Voice & Data. 2011. 2011. “How Xerox Innovates with Emerging Markets' Brainpower”. 2010 50 Business Standard. 77 UID Enrollment Summary. Asia 2050 Realizing the Asian Century. April 15. 2010. IMF DOTS 25 The Economic Times. November 29. “Mercking Things Happen”. 2011. April 16. 75 Business Today. “Ford India exports engines to Thailand. April 2011. “Managed VAS model and its impact on telecom sector”. “Swabhimaan: India's unique financial inclusion initiative”. April 2011. “Medical tourism in the superbug age”. “Avendus expands in Europe as deals increase”. February 22. “25% concession on capex for the semiconductor biz on the cards”. 55 Information Week. 2010. Biotechnology. “NABARD ties up with Reuters for providing market information to farmers”. “Asian Development Outlook 2011: South-South Economic Links”. “India’s Baby Boomers: Dividend or Disaster?”. 16 World Health Organization Website 17 Mint. 2011. “NPCIL tests confidence in world’s biggest nuclear plant” April 19. June 12. “India's cloud computing mkt to be worth $1 bn in five years”. March 22. 2011. “Indian IT to target domestic market”. 2010. “Indian consumer firms eye Africa as next growth driver”. “Cloud computing in India to grow 40 pc by 2014: IDC study” December 2. June 24. 65 Ministry of Communications & Information Technology. 14 ICICI Lombard Website.
Indonesia” July 14. 105 The Financial Express. March 2011. 100 Outlook Business. February 2010. “Suzlon signs deal with CEIL for 1000 MW wind power project” January 28. 2010. March 6. April 2010. “Green building space at 648 mn sft” April 25. 96 Business Standard. March 17. “BHEL may plug in with Toyota to make electric vehicles”. “Indonesia thermal coal export ban proposal worries India”. April 19. 107 Hindustan Times. 118 Business Standard. Venkataraman et al. 95 Business Standard.
. 2011. “Indian Biomass Energy reaches 1 GW in 2010”. August 3. 110 Deccan Herald. February 7. April 10. “Green energy project poses threat to wildlife in Maharashtra”. “Impact of JNNURM”. 103 Green World Investor. 112 Panchabuta. “Shale gas in India is 300 times KG D-6”. Government of India. 111 Business Line. January 2010. 2011. “Buoyant Pepsi to take contract farming to troubled states”. 104 “The Indian National Initiative for Advanced Biomass Cookstoves: The benefits of clean combustion”. 2011. January 6.93 Centre for Wind Energy Technology website. “An act of commission on emissions”. “Next: Fuel from algae”. “India's green building footprint increases: Jones LaSalle”. “India to face major water scarcity by 2030”. 99 Indian TV Today. 2011. “Orissa Govt decision on Tata-Sasol coal-to-liquid JV soon”. 2011. 2011. 101 India Infrastructure. “Essar Oil starts gas production from Raniganj CBM block”. 2011. 2010. Government of India. 2011. 2011. “NTPC to pursue coal mine acquisition in Australia. 117 Business Standard. Waste and Wealth” February 5. March 10. 2010. January 11. December 21. “Study on Common Pool Price Mechanism for Natural Gas in the country”. 115 The University of Nottingham. June 11. 109 The Economic Times. 102 ITC. May 2011. 2010. “State of environment report 2009”. 2011. “Water. 106 The Economic Times. 108 Mercados Energy Markets. May 6. 114 Global Wind Energy Council website. 120 Indian Express. 94 domain-b. 2011. “Mahindra Reva Electric Vehicles launches its Revai” December 10. 116 The Hindu. 113 Ministry of Finance. 2011. 2010. 119 SELCO website. “Mahindra Reva Electric Vehicle records three-fold rise in average monthly sales following MNRE subsidy”. 97 Business Standard. “ITC Green Centre: A Blueprint for protecting the future”. 98 Ministry of Environment and Forests.
neither Accenture nor any of its directors. Accenture does
not control or guarantee the accuracy. This Report also contains certain information available in public domain. or relied upon as such. The information contained and the references made in this Report is in good faith. Matthew Robinson. Such opinions should not be construed as providing professional advice. agents or employees give any warranty of accuracy nor accepts any liability as a result of reliance upon the information. Smriti Mathur. relevance. created and maintained by private and public organizations.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. Armen Ovanessoff. Aarohi Sen.
Authors Mamta Kapur. Ryan Coffey Senior Review Team Sanjay Jain. advice. 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. Mark Purdy. Raghav Narsalay. statement or opinion contained in this Report. recommendations or endorsements. timelines or completeness of such information. Ladan Davarzani
. Any figures and statistics used in this study were up-to-date at time of writing and are subject to change without notice. David Light.
com. with more than 215. Its home page is www. Combining unparalleled experience.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. technology services and outsourcing company. and extensive research on the world’s most successful companies.
Copyright © 2011 Accenture All rights reserved.000 people serving clients in more than 120 countries. 31.accenture. comprehensive capabilities across all industries and business functions. technology and outsourcing experience to conduct innovative research and analysis into how organizations become and remain high-performance businesses.
. its logo. Its management researchers combine world-class reputations with Accenture’s extensive consulting. and High Performance Delivered are trademarks of Accenture.
Accenture is a global management consulting. Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$21. Accenture.6 billion for the fiscal year ended Aug. 2010.