![Manny-Maceda-bccl](https://img.etimg.com/thumb/msid-63554258,width-300,height-225,imgsize-27327,resizemode-75/manny-maceda-bccl.jpg)
You have forecast that automation will displace millions of jobs over the next 20 years, how does that augur for India where we have to create employment for so many people?
India has a big advantage because of its wage arbitrage. In Germany, the cost of a factory worker per hour is thirty times the cost in India. Even cobots or robots cost about $4 per hour. In India, the average factory worker gets paid less than $2 per hour. It’s an area that you can capitalize on for growing manufacturing.
Are you seeing appetite from global companies to invest in India?
Both global corporations and private equity firms view this as a booming market. Population growth is negative in many parts of the world. China’s population growth has plateaued. India is the only significant market where population is growing creating a large pool of unserved and underserved consumers.
Which sectors will drive growth and investments here?
The automotive industry has created more billionaires that the IT services space in India. This demonstrates India’s has the ability to be competitive in manufacturing. Its consumer base can potentially attract a lot of companies to make in India for India. This can reduce reliance on imports. Additionally, with government policy support, India should target areas like technology and artificial intelligence based applications as sectors to build expertise.
Internet-based businesses are the new phenomenon here. What is the future of these businesses?
It’s a big opportunity. IT services reflected India’s potential in the area of technology and internet is the next wave of opportunity. China has capitalized on this by creating global businesses such as Alibaba. They now have access to data across consumer sets in different markets. They can use it to create artificial intelligence based applications. In India, you have the same opportunity. Flipkart is now a national player. But can it develop a larger footprint. That’s the opportunity to target. And this requires policy support from the government.
India has a lot of family-run businesses. How are they equipped to cope with change?
I like to split it into two buckets. One are founder-driven businesses. The other are those businesses where the founders have passed on the baton to the following generations. Founders tend to be instinctive and move faster. Most founders such as Michael Dell or Charles Schwab didn’t pass on their businesses to their children. When you look at Indian family-run businesses there are new generations involved. They are looking to professionalize. But they will need to put in thought around their business models which are changing rapidly due to factors such as advances in technology and globalization.
Interest rates are beginning to move upward in the US. The cost of capital is likely to increase now. How will this impact investments into emerging economies like India?
The impact at best will be short term. There could be some redeployment of capital by investors. But the challenge really is for the US where we have had the longest running period of growth due to low interest rates.
Read More News on
(Catch all the Business News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.)
Subscribe to The Economic Times Prime and read the ET ePaper online.
Read More News on
(Catch all the Business News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.)
Subscribe to The Economic Times Prime and read the ET ePaper online.