3rd
Millennium – Opportunities, Issues and Challenges
R.Kannan
, Hinduja Group
International
Research Conference conducted by Indian Accounting Association, University of
Mumbai and Chadrabhan Sharma College on
7th April 2018 .
Hon’ble Member
of Parliament, Shri Dr. Kirit Somaiyaji, Prof.Shiware, Prof Chitra Natarajan,
Prof. Ashok Joshi, Prof. Madhu Nair,
Prof Pratima Singh, Members of Indian Accounting Association, Faculty Members and Researchers
from all over the world , Ladies and Gentlemen, Good morning to all of you.
I am very happy
to be part of the 4th International Multi-Disciplinary Conference on
Transition and the Transformation in 3rd millennium. I would like to thank Prof.Shiware and
Prof.Chitra for inviting me to deliver the key note address.
I am happy to
know that in this conference, research papers relating to:
i)
Strategic Marketing and Planning
ii)
Business Ethics
iii)
CSR
iv)
Global Management
v)
HRM
vi)
Digital Strategies
vii)
Innovation
viii)
Empowering Women
ix)
Telecommunication, etc
Will be
presented. It is very heartening to note that more than 400 research papers
were received from various parts of the world and am happy to see , many
dignitaries have come from abroad to attend this conference.
Am sure with these
wide variety of subjects and perspectives, the participants including me will
benefit a lot from the proceedings. The topic today is of utmost relevance in
the context of continued disruptions and uncertainty in the Economy.
The advancements
in the first 17 years of the 3rd
millennium are breath taking. We
are living in an age where continued disruption, uncertainty, volatility,
complexity and ambiguity are part of our daily life. The advancement in recent
past is much larger than the advancement witnessed in the earlier few thousand
years in the past.
Few hundred
years ago China and India were the leading economics in the world. According to
some sources, both countries had more than 50% of the world’s GDP.
Later when
Britain started expanding its operations globally, it became the leading
economy in the world. Technology revolution catapulted USA to the leading
position in the world. Afterwards, we witnessed the rise of Europe, Russia,
Japan and South Korea.
From 1980
onwards, China started growing fast and India started reporting higher growth
after liberalisation. Then we started hearing Acronyms like BRICS, MENA, CIVET,
etc. In 1980 , China and India were of the same size . The
breath taking reforms undertaken by China and the fast growth it was able to
sustain for many years have made China , a global power today.
US and Europe and
countries like Japan, Singapore and Hong Kong were contributing to the growth a
few years ago. Even today, because of its large size, US contribution to the
Incremental economic growth in the world is substantial. Since the growth
potential in these countries have become less, the countries like China, India,
Indonesia, Middle East and Arica have started growing fast.
According to predictions
for 2050 by various experts, China will be the leading economy with a GDP of about
$ 50 trillion, followed by US at $ 36 to 40 trn and India $ 27 to 30 trn.
Indonesia will be the fourth largest economy in the world.
In the next 2/3
years, India will become the country with the maximum population in the world.
It has the largest number of youth in
the world. The largest number of entrepreneurs in the world are living in
India. We create the maximum number of
entrepreneurs in a year in the world.
As per the
forecast by all the leading financial institutions and Economists through out
world, India will continue to grow at a rate of more than 7% p.a. for many more
years. The high growth will create many opportunities for people from across
the society. The path to the growth is paved with lot of challenges.
Indian society
had gone through a fast transformation in the last few years. From total
dependence on Agriculture and rural areas, the growth has shifted to services,
manufacturing and cities. Despite, the level of urbanisation is only at 32%,
what we find today is that lot of developments taking place in villages also.
They are being provided with electricity, water, road connectivity, media and digital
connectivity. The penetration of mobile phones in rural areas is taking information
to every nook and corner of the country. The concept of joint family is giving
way to nuclear families. In a family, many go to work, resulting in multiple
income and high earning capacity. People have started spending money and India
has become one of the high consumption economies in the world today.
The entry of e-commerce
players has increased the consumption level. Unlike in the past, today people spend lot of money
on Education, Health , Leisure, Entertainment and Travel.
In an Economic
Growth model, the growth of an economy is initially dominated by Agriculture
and then manufacturing picks up. Finally, the services takes the dominant
position. In the case of India, even without creating a big manufacturing base,
the initial fast growth was supported by services. As the services grew, it
gained its share from Agriculture in proportion to the lost share of Agriculture. Whereas the share of industry and
manufacturing remained at the same level for many years.
The fast growth
in services was mainly supported by Trade. India has got one of the largest and
deepest Retail systems in the world. There are six levels of trade before it
reaches the final customer. At the retail level itself there are more than 15
million establishments. If we take the other six levels, it adds up to a lot in
terms of number of entrepreneurs. This has created lot of business and
entrepreneurial opportunities in India. Most of the jobs in India are created
in the unorgainsed sector and too in the area of trade. At the global level,
India becoming the leading country in the world for IT outsourcing , has
created many businesses in the area of services. An entire eco system of
businesses has been created around IT and ITES.
Whereas China’s
growth strategy was anchored on manufacturing. With the low cost of all factors
of production, China was able to become the manufacturing hub for the world.
Now China wants to build its service sector and aspires to compete with India ,
in services.
If India has to
grow at more than 7% p.a and the fast growth has to be sustained, manufacturing
has to be developed. The share of manufacturing in our economy is only 16% and
the Government has formulated a programme“Make in India” to increase the share
of manufacturing share to 25% of GDP. 25
thrust sectors have been identified for increasing the share of manufacturing
in GDP.
To achieve this
objective lot of skills are required. When there is availability of lot of
people for work, there is also a big
demand for specific skills to develop industries. Realising this need,
Government has created a Skill development programme to fill the gaps in the
skills required. Skill development programmes are in place at the National,
Regional, Local levels and the target is to train 500mn people in the next few
years in more than 43 areas.
To develop
manufacturing, a conducive eco system needs to be developed. To address this
issue ,National level Industrial corridors spanning across many states and industrial corridors within the states were identified and in the process of
implementation. These initiatives will help to develop the industrial clusters
and infrastructure required for industrial development. This will go a long way in accelerating the growth
of manufacturing and the economy.
Countries across
the world have recognised the importance of fast economic growth. The ruling
parties/rulers across the world , irrespective of the form of government , drawn up ambitious plans for the growth of their
economies. They conduct road shows to attract investments into their countries.
Political
climate across the world is becoming business friendly and the culture has
changed. Earlier , investors used to visit the government offices to obtain
permits. Now, the Government authorities , visit , various countries in the
world and inviting the investors to invest.
In India every
state Government has a plan to grow fast and each state conducts Road
Shows/Investment meets to attract investments in the state. This will go a long
way in increasing the competitiveness of states and formulation of robust economic growth strategies.
Digitisation and
Technology. The latest development in technology has created a lot of
opportunities for growth but at the same time has destroyed several industries. The fast
penetration of mobile technology has advanced the social/financial inclusion
and today even a person living in a rural area can use a smart phone to read
and receive a high quality content which is of global standard. The
advancements in AI, IOT, VR and block chain are going to improve the
productivity several times.
At the same
time, faster adoption of these technologies will destroy many jobs. Further ,
misuse of these technologies is threatening the privacy of individuals. The
exploitation and profiteering is also a big threat. Cyber security has become
one of the major areas of concern. The adoption of these technologies should be
handled with great care and measured approach to adopting these technologies
will ensure a balanced Economic Growth .
To ensure a
balanced development of any industry and an economy, regulation and regulatory
agencies play a major role. As the world becomes more and more complex, new
regulations have to be formulated and new regulatory authorities have to be
created. The time taken and procedures
to be adopted to adhere to regulations results in significant costs for an
enterprise. Regulatory costs have become one of the major costs of doing
business today.
The adoption of
new technologies / manufacturing techniques has resulted in degradation of the
environment. Higher level of manufacturing will result in higher pollution. Now
that , we have set a higher target for manufacturing, there is always a dilemma,
which one should be given precedence over the other.
The
opportunities before us are accompanied by several challenges. Considering
India has a large population, all our future economic strategies should be based
on use of the available manpower. Considering the large number of work force, even
a small improvement in productivity in India will lead to big gain. This is the
moment for India. We have very good economic development programmes in India.
By formulating workable implementation plans and effective implementation,
India can regain the global leadership in the third millennium. To realise this
dream, all the stake holders in the society should work together and Make
India a leading force in the world.
Thank you.
