Posted: November 1, 2015 |  AUTHOR: KEN FOX | CONTACT ME

 

I attended a two day conference: USA  India Business Summit at Georgia Tech in Atlanta, Georgia, USA on October 19-20, 2015. Below are highlights from the conference.

India Overview

  • 70% of the population is living under $2 a day
  • 3rd largest trading partner with the U.S after China and the UAE
  • Growing middle class
  • Rapid urbanization: 55% of population will live in cities by 2050
  • 50% of population has access to good drinking water and 33% to power
  • India is not one market but is represented by 29 states
  • The jury is still out on Prime minister Modi’s economic and growth plans.

Key government challenges include:

1. Facilitating the  Ease of doing business

2. Promoting increased Entrepreneurship

3. Improving Infrastructure and transportation 

4. Providing adequate healthcare

Innovation

Previous Global Galaxy blogs cited India’s growing businesses. Dr. R. A. Mashelkar from the Global Research Alliance (in India) presented some interesting trends.

  1. A paradigm shift is ocurring in India to “learning to do more from less for more.”
  2. He spoke about “affordable excellence,” referring to providing highly perceived product quality at an affordable price, using high technology.

-India’s low income population base is so large that appealing to this base can be profitable, while increasing access.

-He gave an example of a company typically selling a smart phone for $250 but being able to manufacture the same thing and selling it in India for $25.

-A research paper (from his website) states technical experts from companies such as the Tata Group and India’s technical universities collaborated in 2010 to develop a $30 laptop computer, mainly designed for students.

-He showed low cost comparisons for cataract and other surgeries undertaken in India versus other markets.

-He discussed the Nano automobile produced by the Tata Group as an example offering a low cost engineered product to reach those who previously could not afford a car.

3. He referred to this phenomenon as MLM (making more for less for more) drivers and cited a Harvard Business article he co-published on the topic as a way to reach the world’s poorest consumers.

4. He cited global companies adopting this strategy for India, including: GE (inclusive innovation), Siemens (smart strategy), Philips, Ford, P&G and Unilever. 

5. He made reference for MLM Innovation strategies to succeed, it needs a paradigm shift (by the manufacturer) with some examples:

Old Culturedoing well and doing good New (MLM) Culture-doing well by doing good

-Technically sophisticated product -Frugal, functional but high quality

  with many features   products

-Remove features to reduce costs -Reinvent the product from ground

up

-Premium priced w/high margins -Affordable priced, high volume

Healthcare/Medical -Presented by Jonathan Goldberg, U.S Dept. of Commerce

  • The Indian government is trying to establish an FDA like agency with at least two divisions, one for pharmaceuticals and one for medial devices.
  • There are 150 biotech centers in India, defined by the government, consisting of current or planned centers of excellence in the biotech industry.
Rajiv Gandi Center for Biotechnology, Trivandrum, India

Rajiv Gandi Center for Biotechnology, Trivandrum, India

  • The government is “sitting” on a lot of healthcare data but not using it (compilation and analysis).
  • The country has dramatically reduced the number of clinical trails it has conducted in the past. This is mainly due to the lack of clear regulations and the concerns for liability, which leads “to an unpredictable business climate.”
  • India’s Dept. of Biotechnology is ten years behind the U.S. National Institute of Health (NIH)
  • Cancer is a big problem in India
  • Other problematic diseases include: Chikungunya, where diagnosis is very difficult, and Dengue, which India reported 60 million cases a year (and is probably under reported).

Other Insights

  • Mr. Aniket Maindarkar is head of the Americas Operations for Infosys, one of the world’s largest BPO (Business Process Outsourcing) companies in the world. Many large global organizations outsource back office operations and other services* to BPO companies.
  • Infosys has 180,000 employees worldwide, offices globally and is based in Bengaluru, India.
Center of Biotechnology, Pravera Institute of Medical Sciences University (Maharashtra, India)

Center of Biotechnology, Pravera Institute of Medical Sciences University (Maharashtra, India)

 *Examples of BPO include: customer and technical support services, call centers, employee IT help desks, data entry and data processing-transcription, transaction data, catalog data entry, bookkeeping and accounting services, insurance form processing, medical billing, on-line order forms and on-line market research surveys and analysis.

Commentary

India’s potential to enhance the quality of life for its population (1.1 billion), improve its economic vibrancy (attract more foreign direct investment) modernize infrastructure (roads, transportation) and ease of doing business is at hand. The initiatives of Prime Minister Narendra Modi, as outlined in a previous Global Galaxy September 2014 blog, represent the beginning of positive efforts towards these goals. However, the challenges for implementing his vision along with reducing poverty and corruption simultaneously are substantial. This is due to the government’s bureaucracy and history of red tape, which translates to lengthy time delays to obtain approvals or new business licenses, getting tax refunds and the possible need to pay bribes along the way.

Comments from a recent Knowledge@Wharton (October 29, 2015) article  traces back some of this government control and resistance to change from the previous colonization of India by Great Britain (which ended in 1947). Additional comments on the Indian government not being conducive to entrepreneurs is eye opening.

India is a control-permit-quota kind of place. The government has to have control over the economy. Entrepreneurs actually bring in disruptive innovation, which creates wealth. It is the job of the entrepreneur. It doesn’t fit well under a control-and-command economy. Therefore, entrepreneurship is being suppressed in India.

Comments from U.S. economist Atanu Dey

  Time will tell if Modi can succeed in changing the government’s culture and infrastructure to make the country more competitive globally and business friendly internally.

Resources:

  1. India Budget Sets Out Country’s Biotechnology Drive, by Dan Stanton,  BioPharma, July 11, 2014
  2. More From Less for More (MLM): The Power of Inclusive Innovation, Dr. R.A. Mashelkar’s company website: http://www.mashelkar.com
  3. Free A Billion: A Way to Lead India from Economic Bondage to Prosperity, Rajesh Jain and Atanu Dey, Knowledge @ Wharton, October 29, 2015
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©2017, The Global Galaxy blog is produced by The Soundings Group, LLC, Charleston, South Carolina, USA, www.thesoundingsgroup.com. The company is an international business consulting firm, specializing in new market assessments, market entry strategies and marketing guidance. The scope of Global Galaxy is to cover timely international trends, issues and business building ideas. Its purpose is to educate, inform and stimulate thinking for business opportunity analyses.

 

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