Bushroda
SENIOR MEMBER
- Joined
- Apr 13, 2007
- Messages
- 1,880
- Reaction score
- 0
From Emerging To Surging
Shanker Annaswamy 08.13.07, 12:00 PM ET
FORBES, NY
BANGALORE, India - As India celebrates 60 years of independence, it is appropriate to reflect upon our national direction, how business operates in a rapidly growing economy and some future challenges.
India is moving from the chrysalis of an "emerging" economy to a "surging" economy and becoming a center of innovation, the critical differentiator to ensure future growth for any nation today. India is working to transform its longstanding tradition of innovation into an engine of economic and social progress to create a better tomorrow for its citizens.
In ancient days, India conceived of "zero" and the decimal system. In modern times, India is nurturing the world's largest democracy, one of the world's fastest-growing economies and a multicultural society with tens of religions and languages.
Since its liberalization in 1991, the Indian economy has been on an exhilarating ride. The country is in the midst of a remarkable growth phase. Gross domestic product was 9.4% in 2006 after exceeding 8% annual growth for the previous three years. A growing middle class and a skilled young workforce with increased purchasing power are helping to drive hyper-growth rates. Several industries--including information technology, financial services and telecommunications--are posting double-digit increases.
Growth is not limited to large enterprises. Small- and medium-sized businesses are flourishing in cities around the country, where more than 1.7 million companies employ fewer than 500 people.
More than 60% of India's labor force works in the services sector, as in the U.S. and the U.K. Companies that originally turned to India for commodity-type outsourcing needs are now locating higher-level software development and managed services here, employing an estimated 1.6 million citizens. Now, India is perceived as not only a place to save labor costs but also as a place where innovation can take place. The combination gives India the formula for the growth it needs.
Private enterprise, supported by sound governmental policies, has been the engine of growth. India's entrepreneurs are using their technology and business prowess to create extremely favorable conditions for investors. Venture capital firms invested $508 million in India during 2006, almost double the amount in 2005. Private equity firms invested a record $7.5 billion last year, almost three times the amount from a year earlier.
Mergers and acquisition deals are reported to have increased by 73% in the first four months of 2007, to $37 billion from $21 billion in 2006, and India's leading stock exchange index, the Sensex, stands at nearly 15,000 even after the recent global pullback.
Various think tanks are already working to understand and guide India's journey up the innovation path. Led by the Confederation of Indian Industry, a coalition of business, government and academic leaders prepared a National Innovation Agenda for India. The group's findings were released in May 2007. The " Innovate India" report suggests a strategy and action plan, including development of a framework to evaluate and monitor India's progress in several areas.
The study found that innovation in India needs to extend from urban to rural businesses. In the area of human capital, the report suggests an examination of cultural values of creativity, risk taking, fear of failure and the empowerment of workers, as well as the encouragement of young people to walk the innovation route by aiming to become scientists.
We're already taking steps to execute the innovation agenda and are finding creative ways to solve problems and transform organizations. Business growth in India has kicked off a race to modernize infrastructure and improve the way that industries operate. Technology is being aligned with business strategy to enhance efficiency and productivity on many fronts.
India's Department of Telecommunications hopes to expand the country's telecommunications infrastructure to 500 million telephone lines by 2010, many of which will be mobile phones rather than fixed-line connections. India remains one of the most attractive countries for mobile telephone operators and wireless equipment makers. One company, Bharti Airtel, has more than 40 million mobile phone subscribers.
Since a sizable number of India's residents do not have access to mainstream banking or financial services, there's a need for alternative approaches. A biometric, multifunction smart card has been developed especially for Janalakshim Social Services, a Bangalore-based micro-finance institution, to help its large group of clients with relatively small accounts conduct financial transactions.
Health care providers of all sizes--ranging from primary care clinics and specialized hospitals to alternative-therapy and wellness-management centers--are springing up throughout India and demanding technology solutions. It's estimated, that by 2012, India's spending on health care could exceed $44.9 billion. The recently launched National Health Data Network, which caters to midsized hospitals of 50 to 200 hospital beds, uses a common set of software applications to share clinical and financial information to maximize patient care while holding down the cost of processing claims.
The efforts are not limited to private industry. Many public sector organizations are reinventing themselves by promoting e-governance initiatives to help their citizens. India's highest tax body, the Central Board Direct Taxes is looking to enhance operational efficiencies by creating an integrated, standardized and scalable information technology infrastructure to support its vast network across India. This initiative is a critical part of the transformation project undertaken by CBDT to improve citizens' experience in managing their taxation requirements, while increasing the agency's tax base and revenues.
These examples demonstrate how innovation doesn't just happen. It requires a process; investment from business, government, science and academia; and a passion for fostering an environment that leads to innovation. We need to continue to identify and execute changes that will benefit individual organizations and society at large and lay the foundations for a stronger India.
Shanker Annaswamy is managing director, IBM India/South Asia. He was co-chair of the Confederation of Indian Industry's Advisory Council for the National Innovation Mission for India, which published the "Innovate India" report in May.
Shanker Annaswamy 08.13.07, 12:00 PM ET
FORBES, NY
BANGALORE, India - As India celebrates 60 years of independence, it is appropriate to reflect upon our national direction, how business operates in a rapidly growing economy and some future challenges.
India is moving from the chrysalis of an "emerging" economy to a "surging" economy and becoming a center of innovation, the critical differentiator to ensure future growth for any nation today. India is working to transform its longstanding tradition of innovation into an engine of economic and social progress to create a better tomorrow for its citizens.
In ancient days, India conceived of "zero" and the decimal system. In modern times, India is nurturing the world's largest democracy, one of the world's fastest-growing economies and a multicultural society with tens of religions and languages.
Since its liberalization in 1991, the Indian economy has been on an exhilarating ride. The country is in the midst of a remarkable growth phase. Gross domestic product was 9.4% in 2006 after exceeding 8% annual growth for the previous three years. A growing middle class and a skilled young workforce with increased purchasing power are helping to drive hyper-growth rates. Several industries--including information technology, financial services and telecommunications--are posting double-digit increases.
Growth is not limited to large enterprises. Small- and medium-sized businesses are flourishing in cities around the country, where more than 1.7 million companies employ fewer than 500 people.
More than 60% of India's labor force works in the services sector, as in the U.S. and the U.K. Companies that originally turned to India for commodity-type outsourcing needs are now locating higher-level software development and managed services here, employing an estimated 1.6 million citizens. Now, India is perceived as not only a place to save labor costs but also as a place where innovation can take place. The combination gives India the formula for the growth it needs.
Private enterprise, supported by sound governmental policies, has been the engine of growth. India's entrepreneurs are using their technology and business prowess to create extremely favorable conditions for investors. Venture capital firms invested $508 million in India during 2006, almost double the amount in 2005. Private equity firms invested a record $7.5 billion last year, almost three times the amount from a year earlier.
Mergers and acquisition deals are reported to have increased by 73% in the first four months of 2007, to $37 billion from $21 billion in 2006, and India's leading stock exchange index, the Sensex, stands at nearly 15,000 even after the recent global pullback.
Various think tanks are already working to understand and guide India's journey up the innovation path. Led by the Confederation of Indian Industry, a coalition of business, government and academic leaders prepared a National Innovation Agenda for India. The group's findings were released in May 2007. The " Innovate India" report suggests a strategy and action plan, including development of a framework to evaluate and monitor India's progress in several areas.
The study found that innovation in India needs to extend from urban to rural businesses. In the area of human capital, the report suggests an examination of cultural values of creativity, risk taking, fear of failure and the empowerment of workers, as well as the encouragement of young people to walk the innovation route by aiming to become scientists.
We're already taking steps to execute the innovation agenda and are finding creative ways to solve problems and transform organizations. Business growth in India has kicked off a race to modernize infrastructure and improve the way that industries operate. Technology is being aligned with business strategy to enhance efficiency and productivity on many fronts.
India's Department of Telecommunications hopes to expand the country's telecommunications infrastructure to 500 million telephone lines by 2010, many of which will be mobile phones rather than fixed-line connections. India remains one of the most attractive countries for mobile telephone operators and wireless equipment makers. One company, Bharti Airtel, has more than 40 million mobile phone subscribers.
Since a sizable number of India's residents do not have access to mainstream banking or financial services, there's a need for alternative approaches. A biometric, multifunction smart card has been developed especially for Janalakshim Social Services, a Bangalore-based micro-finance institution, to help its large group of clients with relatively small accounts conduct financial transactions.
Health care providers of all sizes--ranging from primary care clinics and specialized hospitals to alternative-therapy and wellness-management centers--are springing up throughout India and demanding technology solutions. It's estimated, that by 2012, India's spending on health care could exceed $44.9 billion. The recently launched National Health Data Network, which caters to midsized hospitals of 50 to 200 hospital beds, uses a common set of software applications to share clinical and financial information to maximize patient care while holding down the cost of processing claims.
The efforts are not limited to private industry. Many public sector organizations are reinventing themselves by promoting e-governance initiatives to help their citizens. India's highest tax body, the Central Board Direct Taxes is looking to enhance operational efficiencies by creating an integrated, standardized and scalable information technology infrastructure to support its vast network across India. This initiative is a critical part of the transformation project undertaken by CBDT to improve citizens' experience in managing their taxation requirements, while increasing the agency's tax base and revenues.
These examples demonstrate how innovation doesn't just happen. It requires a process; investment from business, government, science and academia; and a passion for fostering an environment that leads to innovation. We need to continue to identify and execute changes that will benefit individual organizations and society at large and lay the foundations for a stronger India.
Shanker Annaswamy is managing director, IBM India/South Asia. He was co-chair of the Confederation of Indian Industry's Advisory Council for the National Innovation Mission for India, which published the "Innovate India" report in May.