© Swaminathan 2011
India: An Economic Superpower?
Jayashankar M. Swaminathan
© Swaminathan 2011
India: Past• The Indus Valley (1500 BC)
as well as Pataliputra (400BC - 800 AD) were comparable to the New York, London or Tokyo of today for their times.– Scholars from world over
came to learn in India– Yoga, Vedas and Buddha still
impact of our lives globally
© Swaminathan 2011
India: Past• The medieval period saw
the splendor of large kingdoms in north and the south– Explorers such as Marco
Polo, Vasco De Gama and Columbus traveled long distances searching for spices, silk, jewellery and craftswork
© Swaminathan 2011
India: Past• Post industrialization India was
colonized and remained a British colony till 1947
– As late the beginning of the 19th century, India was the major producer of cotton for the globe
– Gandhi’s non-violence approach makes India famous
© Swaminathan 2011
India: Past to Present
• Transformation from a underdeveloped to an emerging economy
• Change from an agro to a service economy
© Swaminathan 2011
India: Present
• 2nd fastest growing country
• USD 1 trillion + GDP
• 250 million middle class
• Young, educated, eager
• Retail market expected to reach 300 billion in 2010
• Only 4% of retail is organized currently
• By 2050 (maybe earlier) will be the third largest economy
© Swaminathan 2011
India: Present• Beyond IT /Software and
Call Centers to Manufacturing and Knowledge
• Recognized as nuclear nation
• Strides in infrastructure – Delhi metro, airports, quadrilateral
© Swaminathan 2011
India: Present• More than 400 million below
$1.25 per day
• Choking cities
• Literacy rates among the lowest
• Poor intellectual property protection
• Poor rural healthcare and infrastructure
• Terror risk
© Swaminathan 2011
India Present: Sea Change
• Burgeoning Middle Class• Moving beyond
Technology• India’s Young and Vibrant
Workforce• Economic Development
and Politics• Infrastructure Focus• Belief in Future Potential
© Swaminathan 2011
India Potential: Connect Everyone• Market Size
– In 2000, developing countries accounted for one quarter of the world’s 700m mobile phones
– In 2009, they accounted for three quarters of a total of over 4 billion
– upto March 2009: 128 m in India, 89m in China, 96m across Africa
– By 2013 – total mobile phones would reach 6 billion, half of the users in India and China
© Swaminathan 2011
India Potential: Connect Everyone• Business Innovation
– India’s biggest mobile operator– All IT operations are
outsourced to IBM– Mobile network handled by
Ericsson and Nokia Siemens Networks
– Customer care by IBM and other Indian firms
– Bharti now concentrates on marketing and strategy
– Operating margins ~ 40%, Cost reductions obtained through outsourcing
© Swaminathan 2011
India: Potential• Business Innovation
– In a new area, Bharti requests a certain amount of calling capacity and pays for it 3 months later at an agreed price per unit of capacity
– Vendor handles the business of designing networks, putting up base stations etc. with incentive to build the network as frugally as possible
– Costs lowered by ensuring that operators do not pay for more capacity than they really need
– Vendors gain economies of scale as they build, run and support networks for several operators
© Swaminathan 2011
Has a lighter body and engine which is in the rear
No second windshield wiper to cut costs
The speedometer is moved to center of dashboard with the
air vents to cut costs
Reinvented way car seats were made to make more room in compact interior
Tata Motor’s Nano is priced to sell at $2200. Larger, competing vehicles sell for $6500. Plans to export the cars to Europe making some adjustments to the interior and enhancing safety features
India Potential: Global Car
© Swaminathan 2011
India Potential: Global Healthcare• Global Healthcare
– Liver transplant costs USD 45K in India as opposed to USD 280K in US
– Heart surgery costs USD 5K in India as opposed to 30K in US
– Medical tourism business is projected to grow to USD 2.1B by 2012.
© Swaminathan 2011
A local is paid on commission to handout
and receive money
A finger print scanner confirms the account
holder’s identity
A cell phone updates account balances
wherever a network is available
Zero’s rural wireless banking system can manage a branch with thousands of accounts for only $60 a month while regular bank branches (and ATMs) cost thousands of dollars to build and run
India Potential: Rural Banking
© Swaminathan 2011
Opens from the top to keep more cool air in
when opened
Instead of compressor uses a cooling chip ~ to
ones used to cool computers
Small and portable with handles
Can run on battery or “unstable power” instead of being plugged
into an electric outlet
Godrej’s “Little Cool” costs about $70 compared to regular refrigerators that start at around $180. It resembles a cooler, has only 20 (as opposed to 200) moving parts and can run on battery.
India Potential: Rural Refrigerators
© Swaminathan 2011
A small fan delivers air to the burning pellets
Uses gasifier technology ~ to power plants to burn more efficiently
Uses pellets made of agricultural waste like corn husks and peanut shells, cooks don’t have to spend time searching for
wood
Burns three times more efficiently than a regular wood fire, so very little smoke is
created in process
First Energy’s Oorja stove sells for $23 and pellets that fuel the stove cost around $5.60 per month
India Potential: Rural Cooking Stove
© Swaminathan 2011
Attached to a black and white printer to make readings of the heart’s
electric impulses
Uses camera batteries to charge
Lightweight and portable, allowing doctors to reach
more patients
GE’s ECG machine costs $1000. Before design changes, the machine would cost as much as $10000
India Potential: Rural Health Care
© Swaminathan 2011
India Potential: Entertainment
© Swaminathan 2011
India Potential: Global Innovation • Global Supply Chain
Innovation– Went to India in 2001
and set up R&D lab– 5003 tractor was built for
the Indian farmer– 5103 tractor modified for
the American farmer– Very different from its
current line yet successful
© Swaminathan 2011
India: Future• Where is India in terms of
economic development?• Has India reached the
tipping point? • What are the roadblocks? • What can be expected from
India in the next decade?
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