October 2018 – Into India

World’s tallest statue to be inaugurated today in India by PM Modi

The world’s tallest statue – the ‘Statue of Unity’ to honour Sardar Vallabhbhai Patel – will be inaugurated today by the Indian Prime Minister Narendra Modi.

Sardar Patel, who was one of the founding fathers of the Republic of India, and became the first Deputy PM, has been credited for his role in uniting independent-divided India in 1947.

Here are the top 10 interesting facts about the project:

The project was announced by PM Narendra Modi in 2010 when he was the chief minister of the state of Gujarat. He had laid the foundation stone in 2013.
The statute is 182-metres tall and is built with 25,000 tonnes of iron and 90, 000 tonnes of cement.
The height of the statue will be more than double the Statue of Liberty, which stands tall at 93-metres off the coast of New York City and four times that of Christ the Redeemer in Rio de Janeiro.
The project involves a walkway, the four-lane approach highway, and the Shrestha Bharat Bhavan which is a three-star lodging facility with 52 rooms.
The Statue of Unity is built on Sadhu Island in the Narmada river, approximately 3.2 km away from the Sardar Sarovar Dam.
The world’s tallest statue will be able to withstand wind velocity up to 60 m/sec, vibration and earthquakes.
The statue will have a viewing gallery at 153 m, which can accommodate up to 200 visitors and will offer an expansive view of the dam and environs.
As the Sardar is known as the ‘Iron Man of India’, iron was collected from across the length and breadth of the country.
The time for construction was fixed at 42 months and no escalation on labour, fuel, and material was allowed.
There is a three-story base that comprises a memorial garden and a large Exhibit hall developed as an edutainment attraction.

India – economy is not so much the elephant, more the tiger on a leash

According to Dhiraj Nayyar, Chief Economist, Vedanta Ltd, “Perhaps India’s economy is not a lumbering elephant, but a tiger on leash.”

What does he mean? In a major article in the Economic Times, he notes that every time India tries to break free, it hurts – rising economic growth is plagued by side-effects, whether high inflation or rising Current Account Deficit (CAD). With growth crossing 8.2% in the last quarter, India’s recovery may be adding to its external account woes.

I have followed the writings and commentary of Dhiraj Nayyar for some time, including when he was with NITI Aayog. He has just released a book “Modi and Markets”. Always clear and persuasive, he is a passionate advocate of a successful India.

He believes politicians look for the quick fix, rather than curing the problem.

Instead, politicians should “focus on enabling the most important feature of free markets: competition. In the end, that is the principle which delivers the lowest prices, highest quantities, reasonable profits, investment and plenty of jobs.”

Since economic liberalisation, the successful industries have been aviation, telecom, pharma, IT, hospitality and automobiles — those where competition has been intense. Sectors where the government has retained greater control on outcomes through policy, and dominant public enterprises have done less well.

Dhiraj Nayyar argues the government should test every policy on the principle of competition. The goal of policies should be to ensure competition between enterprises operating in India, and to create a fair competition for India-based enterprises vis-à-vis their foreign counterparts.

He goes further: “Domestically, policy should be agnostic about whether an enterprise is foreign, private domestic or public domestic, as long as the policy/regulatory regime creates maximum competition.”

Entry for a new firm should be simple, exit for a dying firm should be orderly.

India suffers from mostly self-imposed constraints. A more liberalised and flexible economy will help correct chronic CAD, while containing the pressures of excess demand as growth approaches double digits.

Dhiraj Nayyar concludes: “Less control by government will lead to outcomes that don’t need to be controlled. It will also lead to rapid growth without side-effects.”

As always, he makes a strong case – will politicians act on it?

India to become world’s third largest aviation market by 2024

India will become the world’s third largest aviation market around 2024 surpassing the UK, according to the global airlines’ body the International Air Transport Association (IATA). It projected total air passenger numbers to touch 8.2 billion in 2037.

The top four markets are predicted to be China, USA, India and Indonesia.

The Asia-Pacific region is projected to drive the biggest growth with more than half the total number of new passengers over the next 20 years coming from these markets.

The India growth is being driven by a combination of continued robust economic growth, improvements in household incomes and favourable population and demographic profiles, it noted.

According to the IATA, China would displace the United States as the world’s largest aviation market in the mid-2020s.

The aviation market is defined in terms of traffic to, from and within a country, as per the grouping.

By taking 3rd place after China and the US, India passes the UK around 2024. Indonesia is forecast to be a standout performer – climbing from the world’s 10th largest aviation market in 2017 to the 4th largest by 2030.

IATA believes a doubling of air passengers in the next 20 years could support 100 million jobs globally.

Tourism or business – start your India visit in Maharashtra

The Indian state of Maharashtra and the capital, Mumbai, is situated in the western region of the country – but really it is central to almost everything.

Maharashtra’s gross state domestic product (GSDP) at current prices accounted for 14.89 per cent of India’s gross domestic product (GDP) in 2017-18, the highest among all states – valued at US$ 387.36 billion. It’s the economic powerhouse of India.

We know and love the state’s capital, Mumbai, as the commercial and financial capital of India – plus with heaps to interest both business and tourism. The city is home to several global banking and financial service firms, plus India’s stock exchanges.

Pune is a city I really love and recommend not just because it is on the edge of the most beautiful mountain range. It has emerged as the educational hub.

Maharashtra has emerged as a key hub for IT and ITeS, electronics and business outsourcing industries.

The state has a well-developed social, physical and industrial infrastructure. Apart from 16 airports, the state has two major and 48 minor ports. It also has a well-developed power supply grid.

If you are not convinced, look at these numbers:

At current prices, the contribution of the financial sector to the GSDP of the state increased at a CAGR of 10.51 per cent between 2011-12 and 2016-17.
From August 1991 to December 2017, a total of 894 projects with an investment of Rs 19,088 crore (US$ 2.96 billion) have been approved for the pharmaceutical industry in the state.
The government has launched Wi-Fi services, which will connect 500 hotspots across Mumbai, under the smart city project.
The state has produced 6.55 million bales of cotton in 2017-18*. In 2017-18(P), the state has also produced 184 MT of raw silk.
Power generation in the state has been steadily increasing. Production figure stood at 124.31 TWH in 2017-18 and 47.19 TWH during April – July 2018.
Maharashtra accounts for approximately 35.1 per cent of the country’s output of automobiles by value.
The state has launched Unlimited Maharashtra advertising campaign through newspapers and television channels to attract tourists during summer vacations. A half-hour ferry ride across Mumbai harbor takes visitors to view the superbly carved 1,300 years old cave temple on the little island of Elephanta, a favourite picnic spot.
In 2017, the state had 119.2 million domestic tourist arrival and 5.08 million foreign tourist arrival.

Mumbai is always on my itinerary for India – and there are many other cities worthy of our attention.

India’s healthcare sector growing fast

Healthcare has become one of India’s largest sectors both in terms of revenue and employment.

During 2008-22, the market is expected to record a CAGR of 16.28 per cent.

The total industry size is expected to touch US$ 160 billion by 2017 and US$ 372 billion by 2022.

Indian companies are entering into merger and acquisitions with domestic and foreign companies to drive growth and gain new markets.

The hospital industry in India stood at US$ 61.79 billion in 2017 and is expected to increase at a Compound Annual Growth Rate (CAGR) of 16-17 per cent to reach US$ 132.84 billion by 2023.

Engagement through regular visits and providing innovation should prove to be fruitful in this growth economy.

Handling the two big cultural divides between India and the west

People often ask me “what are the main cultural differences between India and the west?” That is, the differences that lead to misunderstanding and failure to do long term business.

For me, there are two major causes leading to a breakdown in trade and business discussions.

The first is what the researchers call Universalism vs Particularism. Universalism exists in the west – people believe you can discover what is true and good and can apply it as a general rule. Particularism is the culture of India – relationships are more important and unique situations more important, so each situation is considered on its merits.

This difference is sometimes referred to as the “absolutism” of the west (things are absolutely good or bad, right or wrong etc) compared to the “relativism” of India (things are never wholly good or bad, it depends, relationship is more central).

Universalism is the culture of USA, England, Australia and Particularism is the culture of India, China and Thailand.

When it comes to agreements and contracts you can see this difference cause divisions – the west believes what is written down is permanent, fixed, never to be changed, while India and China realise that life is constantly changing, and variations might be needed.

The second major cause of breakdown is that India is a “collective” culture, while the west is increasingly individual.

You will find in most Indian companies that decision making is a collective operation, even at Director level. Whereas in the west, a Director or Manager of a division has their yearly budget and puts a program to the board, and then gets on with it largely uninterrupted, your Indian counterpart involves the collective in almost every decision – even where the yearly budget and program are already set.

This also shows up in work styles – a western manager will set the task and assist, then largely stay out of things – whereas both sides in India will want moment by moment contact. For companies involved in the west and east, the western managers find this demand for constant feedback and contact very challenging.

Individualism is the culture in the USA, Canada and Australia while Collectivism is the culture of India, Japan and China.

I am not suggesting that one culture is “better” than the other – they are simply different, and it is important we know the difference. That way, we can adapt our behavior and succeed across cultures. Given that India has around 600 million people below the age of 25 (what a market!) we will all be better off if we can adapt and succeed together.

University students out of step with employers on what employers really want in new hires

A NEW survey has revealed the skills that employers value and how different they are to what university graduates think are important. The QS Global Employer Survey 2018 has highlighted the misconceptions students have about what skills employers want and the areas where there is a graduate skills gap.

For the report released last month, more than 11,000 employers were surveyed around the world and their answers were compared to responses from 16,000 prospective students.

A key finding is that students relatively overvalue the importance of creativity and leadership skills, and undervalue the importance of flexibility/adaptability and teamwork.

The development of soft skills, such as team-playing and resilience, had become almost as important as the technical skills and knowledge acquired during a degree. What are known as “enterprise skills” such as problem solving, communication, teamwork and digital literacy, were in demand.

The skills employers ranked as the most important for graduates:

Problem solving
Teamwork
Communication
Adaptability
Data analysis
Resilience
Organisation
Technical skills
Creativity
Leadership
Language
Commercial awareness

The skills students thought were the most important:

Creativity
Organisation
Problem solving
Leadership
Teamwork
Communication
Resilience
Commercial awareness
Adaptability
Technical skills
Language
Data analysis

The biggest difference between the two answers was for creativity, which students placed as the most important skill but employers ranked ninth among their priorities.

This was followed by data analysis, which employers ranked highly as the fifth most important skill but students ranked 12th.

Students were also confused by leadership, which they ranked as fourth most important, but employers rated as 10th.

Employers also rated adaptability highly, in fourth place but students put this in ninth place.

The only skill to feature on the top three for both employers and students was problem solving.

The report suggests students around the world underestimate how much employers value flexibility/adaptability and analytical skills, as well as resilience. They wrongly assume creativity, leadership and organisational skills are more important.

Our Employability Skills Master Class helps students align with what employers want, and builds in the skills to thrive in the era of the Fourth Industrial Revolution.

India continues to lead the world in Business Process Management services

India continues to be the largest BPM (business process management) base in the world, generating close to USD 32.5 billion in revenue with an employee strength of 1.2 million.

The Indian BPM industry is estimated to now account for over 37 per cent share in global sourcing and is witnessing a 1.7X revenue growth. Global BPM revenue is set to grow from USD 154 billion to a projected USD 167 billion in FY18, an increase of almost 8 per cent.

Upskilling for digital, acquiring competencies through acquisitions or partnerships, building platforms and products, and leveraging centers of excellence in new technologies are some of the key priorities of Indian companies in the BPM industry.

The industry is taking advantage of emerging technologies such as Robotic process automation (RPA), artificial intelligence (AI), digital communications, Internet of Things (IoT), cognitive computing and more, to improve profitability, collaboration and competitiveness.

India targets 40% of energy from solar and wind by 2030

To see how fast the world is turning away from coal and gas take a look at China and India – big things happening.

India is targeting 40 per cent of electricity generation from non-fossil fuel-based resources by 2030 as it looks to tap vast solar and wind potential to replace reliance on polluting coal to meet its energy needs, Prime Minister Narendra Modi said Tuesday.

Modi said he saw the 121-country International Solar Alliance as the future OPEC for meeting energy needs of the world.

Speaking at the first Assembly of the ISA here, he said solar power will play the same role that oil wells have played over the past few decades in meeting global energy needs.

Humans have in the last 150-200 years relied on resources trapped below the earth’s surface for meeting energy needs. But for a secure future, resources available above the ground like solar and wind energy need to be harnessed, he said.

“This is the right time to invest in solar manufacturing,” he said adding he saw an investment potential of USD 70-80 billion in solar manufacturing.

How can Australian investors and superannuation funds best access investment into solar and wind in China and India?

My state of Victoria hits record export levels and is open for business

Forgive me for being parochial in this blog, but I just have to talk about my home city of Melbourne and our state of Victoria – so well known to tourists for the Great Ocean Road (pictured below).

Victoria’s exports have hit record levels and are still growing as the Victorian Government helps more Victorian companies break into global markets and create local jobs. Exports from Victoria grew 6.45 per cent to reach a record $51.6 billion in 2017-18.

Victoria’s services export performance has been particularly strong. Valued at $22.5 billion in 2017, it now represents more than 40 per cent of total Victorian exports.

This has been driven by sectors like international education, which has grown 98 per cent since 2012 to $9.8 billion, and tourism which is up 62 per cent to $4.8 billion over the same period.

Medical technologies and pharmaceuticals, a key sector identified for support through the government’s $200 million Future Industries Fund, has seen substantial growth, with exports of pharmaceutical products surging 72 per cent in the past two years to $1.56 billion.

Victoria is Australia’s biggest exporter of food and fibre, another key sector the Victorian Government is supporting, with exports reaching a record $12.8 billion in 2016-17. Victoria now accounts for 79 per cent of Australia’s dairy exports, 52 per cent of animal fibre, 45 per cent of horticulture and 38 per cent of prepared foods exports.

Victoria’s export growth is even more impressive given it has come over a period when the state’s single biggest exporter, Toyota, ceased production, highlighting the diversity and strength of our export sector.

The Victorian Government offers a range of services to help local businesses get export ready, prepare market strategies and understand regulatory requirements so they can start taking their products and services to the world.

Since December 2014, more than 4600 Victorian companies have participated in 130 government-supported inbound and outbound trade missions, resulting in more than $267 million of actual export sales.

The government has also grown Victoria’s network of international trade and investment offices (VGTIs) to 22, which is more than any other state, and put in place strategies to grow trade and investment with key markets including China, India, Latin America, and Southeast Asia.

So – looking for a dynamic, quality partner or location for business and education? Try Victoria!

Above pic – just one hour drive from Melbourne CBD is the beautiful wine and food area the Yarra Valley and one of the great forest drives, the Black Spur.