Propelling India into a new growth trajectory

The Indian Union Cabinet Minister for heavy industries, Mr Praful Patel delivered the most anticipated keynote address at the 2011 Kellogg India Business Conference. Mr. Patel, who was the minister of Civil Aviation until very recently, shared his experiences in building the Indian Aviation industry from a small base to one of the biggest globally. Mr. Patel also shared his views on the increased importance of India in the globalized economy and assured the audience of a robust growth growing forward, especially in the heavy industries segment of the Indian economy.  He discussed some of the challenges faced by India today yet emphasized his deep faith in the democratic process in India in dealing with them. Mr Patel then discussed the modernization and private participation strategies that the public sector enterprises would pursue in the near future, that would propel India into a new growth trajectory. Here are the excerpts from his note at the conference:

On Globalization and US’s recent policy on Out-shoring:

“…If the Indian industries have grown, and have had a foreign investment of 50 B dollars in the past 5 years, more than 25 B dollars of that investment has gone to the United States!  And in the next 10 years, if 100 Billion dollars is invested in India, more than 20 Billion dollars would go back to USA in one form or the other. USA is the one who produce the planes, the air-traffic control systems, and other types of technologies that are driving Indian businesses.  So in the process, US is also creating jobs back home!”

“And the other side of the phenomenon is that until and unless, American industries and businesses become competitive, how will they be able to compete with the rest of the world anyway? It’s not about India taking away jobs, but also about the US firms to be able to compete in a global arena! It is America who has always been the proponent of Globalization. It is important that we look at the global context and that is exactly what America has shown and taught the world. And therefore it is no time for America to go back on what it has preached the world.”

“We (India) opened our economy and we believe that it has been a win-win for us and the world as well. We cannot now say that we want to go back to the older world. The world has now changed and has become integrated with each other.”

On the position of India in the global economy

“…Despite all the constraints, India today has some things to offer that are unique among all the developing countries of the world. We have a proven legal jurisdiction, an established democratic system and so many other systems in place, including autonomous institutions working in all sectors of the industry. These things cannot be ignored, and are important for any country (to do business with) and that is why India has a great position in the developing world.”

“We do acknowledge that China has a far larger economy, has a better competitive edge than India, but at the end of the day, I would have to say the (international business) confidence in India is much more in the long run. China does offer better economies of scale, but in the long run, when people value and judge where they would be more comfortable in putting their money,  India is emerging as the winner. That never used to happen in the past, but it is on account of our opening of the economy. We have definitely had a slow start, but I can tell you with certainty that there will be a lot of opening up of the economy going forward.”

On Privatization and the role of Public Sector on the Indian economy

“…I have now taken over a new responsibility of Public Industries.  India’s public sector is huge, and goes to the days of Nehru and Indira Gandhi, after independence. I think that the Indian economy was kick-started, the industrial foundation was laid from the public sector. It may not be the greatest model today, but at that point in time, it surely made a lot of sense.”

“We have companies which produce salt, some that produce ink and even tractors and scooters. I don’t think that these are strategic businesses that the government needs to be involved with in future. So I think that we need to take some tough decisions. E.g. we took decisions to privatize first the Mumbai and Delhi airports and later also the Bangalore and Hyderabad ones. They have created huge results.”

“In the long run we need to change the government’s approach to its own companies. E.g. I have been advocating for a long time that Air India must have some sort of private participation, at some appropriate stage.  When there is good private competition, e.g. in the airline industry, one has to see which are our core businesses vs (those that are) not. The ones that are core we should continue to propel them, and those that are non-core, we should move away from them. That would unlock value for the larger good.”

“We should see the trends in the size of Indian economy: India’s population, emerging middle class, the consumerism in India, these are all drivers of huge growth. There is no way that India would not grow at the rate of 8-9% (average) y-o-y in the next 10 year horizon. There may be years in which it grows by more than 10%. E.g. The Indian auto sector has been growing at the mind boggling rate of 37% in the last one year. We used to sell only a 100 thousand automobiles in a year, but this year we would sell 3 Million this year and would go to 10 M in the next 8-10 years.”

“All these sectors including irrigation, power (nuclear etc) roads, airports, faster railway system are generating huge investment opportunities.”

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Succeeding in India as a woman

The 2011 Kellogg India Business Conference brought together eminent female leaders across the fields of arts, finance, media and global trade to discuss the evolving challenges and opportunities faced by women in India.

Ketki Parikh moderated the passionate discussion between four successful Indian women leaders – Shikha Sharma, Angela Chitkara, S. Mitra Kalita and Aroon Shivdasani. The discussion drew the audience into topics ranging from overcoming biases against women in the workplace to developing personal and professional success metrics.

Left to Right: Shikha Sharma, Arron Shivdasani, Angela Chitkara, S. Mitra Kalita

Change is all around us

Ketki kicked off with a brief depiction of evolution of the role of women in Indian society. The increasing number of Indian women in sports, parliament and business is evident of radical change. Yet, despite these developments, Ketki sees a paradox – many women are still unaware of their human rights and are limited to domestic life. Human rights for women are more than simply constitutional and should include the freedom to dress and feel as they please and do what they enjoy. As Ketki drew her introduction to a close, she posed her first question to Shikha Sharma.

Overcoming biases against women in the workplace

Given her extensive experience in the Indian banking industry, Shikha spoke about her ability to deal with biases about women in a traditionally male-dominated profession. Shikha highlighted that while she was fortunate to have female role models at ICICI, it is important to simply do the job well without being overly conscious of your gender. As women focus on substance and prove their capabilities, they will be naturally valued in the workplace.

The need for multitasking

The panel then went on to discuss the complex challenges and strengths of women in multitasking across their professional and personal lives as they juggle the roles as a working professional, mother and partner. The panel took the audience through a vibrant discussion of the increasing pressure to be successful across all roles.

For Shikha, taking on multiple roles is done by choice and excluding any of them is a choice that she does not want to take.

For Mitra, multitasking is also a strength that leverages the capabilities women are naturally endowed with. An anecdote about her first working day in India for her start-up venture, her first experience being a manager in India shines the light on the issues that women have to deal with.

On this first day Mitra had to decide not just the appropriate wear (settling on a dress with a Nehru collar) but also deal with multiple requests for her husband’s and father’s names and new colleagues assuming that she is Mr. Kalita given her seniority. However, according to Mitra, the skills naturally endowed by women and mothers, including a natural multitasking ability, fit well with those required in a modern Indian business environment and in cross-cultural situations. Mitra ends by emphasizing the need to be and act as a woman in the workforce and  the importance of having access to management, who have children.

Measuring success and the four Bs

The discussion then turned to how each of the women measure success. For Aroon, success is related to the perception of oneself, and specifically for the philanthropic cause in the arts that she is involved in.

For Mitra, during her 20s, success was related to achieving at 3 out of 4 Bs in any given day: Business Reporting, Book, Body and Boys. Lately, she has however relieved the pressure on herself and jokingly admits to being happy with simply achieving one of the four Bs in a day.

The glass ceiling

As the panel discussion draws to an end, the panelists offered their views on the presence of glass ceiling.  For Angela Chitkara the best approach to any potential ceiling is to identify your values and stand by them and let the chips fall the way they will. Shikha highlighted the fact that more and more women are getting into senior executive positions in India, indicating that we are currently not near hitting a glass ceiling.

Parting advice on being successful as a woman in India

Finally, the panelists gave their parting thoughts and advice for being successful as a woman in India.

Shikha encouraged women to think carefully about the many choices that are presented to them, emphasizing the importance of picking what you enjoy and makes you happy. Aroon flagged the need to be passionate and allowing this passion to fuel how you deal with challenges. Angela encouraged women to identify their values and sticking to them, while Mitra finally urged women to not forget their Indian backgrounds, offering assurance of the possibility of blending east and west.

Biographies

Shikha Sharma is the Managing Director and CEO of Axis Bank. Shikha was previously the Managing Director & founder CEO of ICICI Prudential Life Insurance Company.

Angela Chitkara is the Founder and CEO of US-India Corridor, a strategic consultancy firm focusing on international companies with India exposure. Angela has trained and worked as a television journalist for more than a decade in across multiple global locations, serving in various roles from News Associate to International News Editor.

S. Mitra Kalita is the senior writer covering housing at The Wall Street Journal, but most recently helped launch the Greater New York section as a senior editor. She has held prominent positions across the US and Indian media in the roles of reporter, editor and columnist. Her second book, “My Two Indias: A Journey to the Ends of Opportunity” has just been released by Harper Collins India.

Aroon Shivdasani is the Executive Director and founding member of the Indo-American Arts Council. She was Adjunct Professor of Creative Writing & English literature as well as VP of her husband’s marketing company prior to her current position.

Ketki Parikh moderated the panel. Ketki is an entrepreneur who established Vachikam in 1995 with the goal of sharing her experiences at theatre in India with her friends and the greater Indian community in America. Ketki is also a board member of Apna Ghar, a domestic violence shelter and donates her time and efforts to other NGOs, including the Indian Development Service.

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The Role of Media and Entertainment in Modern India

Panelists:

Moderator: Prof. Sree Sreenivasan – Dean of Students Affairs, Graduate School of Journalism, Columbia University.

Speakers: Shivnath Thukral – Group President, Corporate Branding and Strategic Initiatives, Essar Group; Aparisim Ghosh – Deputy International Editor, TIME Magazine; S. Mitra Kalita – Senior Writer (Housing), Wall Street Journal ; Afsar Zaidi– CEO, Carving Dreams (One of India’s leading talent management agencies).

Left to Right: Shivnath Thukral, Afsar Zaidi, Mitra Kalita, Aparisim Ghosh

The media and entertainment panel at the 2011 Kellogg India Business Conference was the first panel of the day.  At the conclusion of the panel, one of the panelists, Shivnath Thukral, Group President, Corporate Branding and Strategic Initiatives, Essar Group, tweeted that the, “hunger to know about Indian Media was immense.”  There are no better words to describe the mood in the room during the most exciting panel of the day.  The featured panelists, with impressive resumes, approached the panel in a candid manner and did not hold back to voice their opinions.  Moderated by Professor Sree Srinivasan, Dean of Journalism at Columbia University, the panel’s key element was the use of new media such as Twitter and Facebook that he updated constantly with questions and inputs from the attendees and a global twitter audience.  This tactic generated enthusiasm, excitement, and kicked up the level of interest and audience engagement in the panel a couple of notches.

Role of Media and Entertainment in Social Issues

The state of media and entertainment in India was debated during the panel.  Bobby Ghosh, Time Magazine, Deputy International Editor, suggested a mixed picture of the state of media and entertainment.  He spoke of the flourishing Indian entertainment industry that was successful in addressing themes of social and political importance that other media has not been able to achieve as successfully.  Social media is also gaining relevance and has been able to force main media to bring topics to national debates.  The confluence of mainstream movies and social issues has resulted in a positive movement for critical issues like education in India.  However, it is unfortunate that journalists are not as active as commercial cinema in bringing similar social issues to the forefront.

Infotainment and Bollywood

No discussion on Indian media and entertainment is complete without a discussion of Bollywood, the world’s largest film industry.  The panel lamented the devolution of news into ‘Infotainment’ and highlighted that the distinction between news and opinions had blurred only because the audience wanted it that way. No profit-driven media firm in India or even the US had found a way to drive revenues through a balanced reporting of facts.  Despite vigorous debate on other issues, all panelists were in agreement that serious news doesn’t command much viewership and that Bollywood and Entertainment tend to dominate the headlines.

Afsar Zaidi, CEO of Carving Dreams (the top talent management company in India) brought some Bollywood sparkle to the conference, and talked about the evolution of a professional talent management sphere in India.  Introduced as the Jerry Maguire of Indian entertainment, Afsar stated that in this industry one is successful by, “creating value, providing value and delivering value” to all stakeholders.  Carving Dreams creates value in the entertainment and media space by enabling its talent to reach and stay at his/her peak as there is a small window of opportunity to touch a chord with the public.  These services become increasingly important as billions of rupees are at stake in the Indian entertainment industry.

Competition and professionalism in Indian Journalism

Mitra Kalita, Senior Writer (Housing), Wall Street Journal led the launch of a start up online publication, Mint, in India.  The competitive nature of the business was apparent to her when 7 different newspapers were deposited at her doorstep each morning.  She knew that the pace of delivering news in India was much faster than she had been used to in the past.  Here, “before you had the time to think about the concept, somebody else was already doing it.”  However, it was not all doom and gloom for the crowded newspaper industry.  Mitra shed light on the fact that while competition in journalism was severe in the metros, there is immense opportunity in the 2^nd and 3^rd tier cities that are hungry for legit and unbiased journalism.

The panelists expressed their dissatisfaction on the inadequacy of professionalism in journalism in India.  Mitra worked on transforming journalism professionalism at Mint by establishing a “code of conduct” centered on ethical fairness and accuracy of information.  Bobby Ghosh voiced his disappointment on the aggressive nature and narrow focus on the issues being written and the lack of efforts to take steps outside of the mainstream issues by journalists in India.  The panel concluded that sheer scale and competition was making professional representation in media a necessity.

Business of Media and Entertainment

The panel successfully balanced opportunities with realism.  Shivnath Thukral, voiced his concern of an impending industry crisis if the media channels end up in a ‘me too” race and avoided differentiating themselves.  The ingredient that made this panel very intriguing was the contrast in the highs and lows in this industry.  For every stride this industry has taken to prove its mettle, a statistic and opinion was provided for the lack of impact of the same industry.  For instance, there are as many as 6 business specific news channels in India, however the average household savings in India has not increased.  Overall, the panel ended on a high note by calling attention to the colossal business opportunity that is Indian media and entertainment.  Shivnath Thukral stated, “India has 600 TV channels. Of these, 260 are news channels,” a statistic unmatched by any other nation in the world.  This sheer number underscores the vast extent of media’s power in India.  The question that played on everyone’s mind was, ‘how will this business focused audience harness the power and opportunity presented by the media and entertainment industry in India?’

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The shifting structure of the Indian economy

The MD and CEO of Axis Bank, Shikha Sharma delivered an insightful talk about the changing structure of the Indian economy and outlined some of the issues facing the financial sector in India today. Following are excerpts of her speech at the Kellogg India Business Conference 2011.

State of the Indian economy

“Since the implementation of economic reforms in 1992, India has undergone a significant structural shift in its economy. Post global recession in 2010 the following trends have emerged.  There is a long term savings rate, of close to 30%, and over time, this fuels the growth story in India. One also observed a decoupling from global economic markets. The financial and banking industries remained fundamentally strong, and liquidity shocks were curtailed by strong domestic demand and prompt policy response.  Trades continue to rise, and internal remittances continue to grow at a healthy pace.”

Building connections externally and internally

“In building bridges externally, Indian firms have expanded their presence overseas for sales, technology and resources.  Labor mobility also forms a significant portion of this bridging efforts. There is a lot of innovation on delivery to large markets globally and several smaller markets internally. One example is in mobile telephony where a lot of innovation caters to the needs of the bottom of the pyramid. Indian companies have accepted that they are a part of a global economy and they compete globally.  She spoke of many firms like Tata and Hindustan Unilever Limited (HUL) that have devised innovative new products. Large firms have shifted their India strategy and no longer move to India only to save costs.  They are here to devise innovative products for the large market that is India.

Internally, labor mobility also helps spread change across the Urban rural divide. The size of the rural markets in India have significantly changed due to implementation of NREGA and other national schemes designed to distribute growth evenly across the divide. This is leading to an integration of the urban and rural market in India, by accelerating market convergence in other areas like delivery of medical and education services.  GE healthcare was one such example.  IT e-choupal is an example of changes in logistics and supply chain.”

Credit crisis and the perception of the Indian economy

 

“Around 2003, the global business world began to view India as a high growth economy. The structure of the economy has changed significantly over the last decade where services have become the dominant driver of the economy. When the crisis hit the world in 2008, the jury was out on ifit would rein in growth in India and China or whether these countries were decoupled from the global economy.   India did feel the impact, but very soon began to recover (faster than other economies) because a large part of the economy is driven by domestic factors. While financial flows impacted Indian markets immediately, the government took a lot of steps, including reduction in excise duties, government guarantees for export, NRETS gave money to the public and re kick-started consumption.   Many in the industry were surprised at the low level of impact of the crisis, and as a result India has taken on a larger role in global forums places like FSB, WEC, G20 etc”

Drivers of this transformation

 

“Increasing global connections were both a manifestation and a result of growth. Trade volumes in service and merchandise exports increased. The development of infrastructure and ports was privatized and this helped catalyze growth.  India also became a global outsourcing and R&D hub – with firms like Ranbaxy, GE, Kalyani, Renault, and DRL setting up research centers in India.  Indian companies expanded their presence overseas, gaining access to new technologies. (eg Tata acquisition of Jaguar)   Government Initiatives around import of fuel, co investing in coal mines, natural gas, iron ore etc  helped provide the base resources for Industrial expansion”.

Next Steps in the Financial Sector

 

“The focus now needs to move to financial inclusion.  Every firms needs to do its bit in terms of getting financial solutions out that provide greater inclusion and better levels of service. Firms need to innovate and come up with a new model. A combination of some models like HUL ‘Shakti’ model in tandem with mobile technologies and stripped down versions of these products could help generate growth in this sector.  India does not have well developed debt and pensions market, and there is a huge opportunity in this space for new products”

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Channeling growth to the bottom of the pyramid – Sam Pitroda

The Kellogg India Business Conference had the honor of having Mr. Sam Pitroda deliver the morning keynote address.  Mr. Pitroda currently advises the Prime Minister of India on Public Information Infrastructure (PII) and Innovation.  He is responsible for creating the blueprint of a unified information infrastructure that will radically alter democracy by making information readily available to people throughout India and enhancing the delivery of public services and welfare programs. As head of the National Innovation Council, Mr. Pitroda hopes to create an innovation model that will foster growth and improve lifestyles at the bottom of the pyramid.

Reflecting on the current state of affairs in India, Mr. Pitroda said that India’s information technology program had been tremendously successful in putting India on the global economic map. With India’s software exports expected to reach USD 70 billion in 2011, information technology had clearly brought wealth and recognition to India. Unfortunately, the growth and accompanying prosperity are concentrated in the hands of a few – India’s urban middle class – and in a few cities.  Mr. Pitroda believes that critical to India’s long-term prosperity is inclusive growth, one that reaches the bottom of the pyramid.  This necessitates re-engineering of existing governance systems and processes in a manner that makes it easier to deliver public services and welfare programs to every Indian citizen.

The Public Information Infrastructure project is based on the belief that information will be a key lever of India’s economic and social development in the 21^st century. Along with Executive, Legislature and Judiciary, Information will constitute the fourth pillar of democracy in India.  Mr. Pitroda envisions PII to radically alter India’s democracy by empowering local governments with critical and accurate information while facilitating informed participation from citizens at the grass roots level. Essentially, PII aims to use technology to dismantle barriers that have led to information arbitrage and inefficiencies in day-to-day governance. The e-governance systems currently in place have evolved in silos with each state having its own software and information architecture. This makes it hard to seamlessly exchange information across states and administer services swiftly and efficiently. PII will setup a uniform infrastructure that is standardized, vendor independent, cost effective and free of duplicity.

The backbone of PII is an ambitious USD 120 billion National Knowledge Network (NKN) that will  connect 1500 institutions across India using high-speed data networks. NKN will include educational institutions, research labs and about 600 district offices that have already been wired up with optic-fiber cables carrying data at 1 Gbps (gigabits per second). In the last mile, the network plans to connect about 250,000 local governments at the village level (called gram panchayats). In addition, NKN would enable creating and maintaining a national repository of information about people, places and programs.

The infrastructure that Mr. Pitroda has in mind is clearly unprecedented in its scale, but this might well be the solution that a country with a billion dreams needs.  Luckily for Mr. Pitroda, the present UPA government led by Dr. Manmohan Singh supports his vision and has set aside a massive multi-year budget to execute on Mr. Pitroda’s plans.

Moving on to his latest assignment as head of the National Innovation Council, Mr. Pitroda spoke about the need for an “Inclusive Innovation Model” that is suited to India’s needs and challenges. With special emphasis on facilitating innovation by micro, small and medium enterprises, Mr. Pitroda outlined five key focus areas for the National Innovation Council:

• Think of innovation as a platform.
• Focus only on the bottom of the pyramid espousing sustainability, affordability and access.
• Create an eco-system for innovation that includes venture capital, angel investment and intellectual property protection.
• Define the right drivers for innovation – for example foster durability over disposability.
• Have discourses on innovation to question the fundamentals of how and why we do things the way we do them.

Mr. Pitroda’s plans involve a USD 1 billion “Inclusive Innovation Fund”, with seed capital provided by the government. The fund plans to raise additional capital from the private sector. Noting that changes at the bottom of the pyramid are often met with strong resistance by stakeholders that have a vested interest in maintaining the status quo, Mr. Pitroda believes that it will take time for changes to percolate, but it is critical that we setup a process now.

Sam Pitroda is once again at the brink of ushering a revolution in India, this time with implications on  governance and eliminating disparities by improving the quality of life at the bottom of the pyramid. In his previous stint as Technology Advisor to Prime Minister Rajiv Gandhi, Mr. Pitroda championed India’s telecommunications revolution and played a seminal role in the evolution of India’s telecommunication policy. India at Kellogg wishes Mr. Pitroda the very best.

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