Doing Business in India: The Next Wave
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GBS Bindra, Global Innovation Director, Logica, addressed the distinguished gathering at the executive dinner forum on doing business in India, in Abu Dhabi, October 7, 2009. |
Key Events |
Excellencies and distinguished members of the audience. It’s my privilege to be speaking to you tonight.
Let me begin with identifying three distinct trends which are shaping this world and would be redefining opportunities for companies here. Each one of them is a huge opportunity in its own right, but when put together they create much more magic.
Trend One: This presents itself in the form of huge new marketplace that is being created. In next one decade, half a billion new consumers will join the marketplace. They're going to buy houses. They're going to need vehicles, roads. They're going to buy appliances. Global Consumer landscape will thus change and expand significantly. Never before in this world have 500 million new consumers ever joined the marketplace in a decade. This is a BIG opportunity for UAE companies.
Trend Two: Services now form two thirds of world’s economy. And that is only going to increase. If you look closely at the services industry, you would recognize that ICT plays a critical role in stimulating innovation within the services industry.
ICT has - helped create new business models, dramatically improve supply-chain, create new customer experiences, manage risk, help reduce carbon emissions, and importantly, allows companies to tap into brain power spread across geographies.
New age ICT is making computers as we knew, disappear into objects. And people, systems and objects are beginning to collaborate as mobile connectivity and location awareness becomes more and more ubiquitous. India already has 400 million mobile phones and remains the fastest growing mobile market in the world. However there is an even bigger role that ICT plays and that’s in collaboration.
Collaboration is one of the biggest pillars of innovation in recent times. ICT makes collaboration possible by breaking down physical borders. It connects people, machines, economies, organisations and governments in ways that were never thought possible. I call this trend “pervasive collaboration”.
Trend Three: This is shaping the future. For as long as we can see back in history, man has derived its well-being from burning things. Warmth, light and mobility have all been achieved by burning. And for the last 150 years carbon has played a huge role in our development. And it has been fundamental to our economic prosperity.
Imagine in a fully developed world, if humankind in this world were to become equal consumers of carbon as their brethren in rest of the world? Clearly, we know very well now that we have to decarbonise this world. Now how do we decarbonise the world? This challenge can be solved not only by creating new kinds of automobiles…or new kinds of power plants... or formulating new kinds of gasoline … or creating more efficient energy grids …but by changing the way we live, work and play.
But more so, this challenge will be arrested very much by people changing their behaviours. And of course that would mean we need to create new business models to help change behaviour. And this move to transform our economy to low carbon resource efficient economy could be a huge opportunity.
The Economic Opportunity Triangle
Now if we look at all these opportunities as three angles of triangle of what I call “The Economic Opportunity Triangle” then we have growth in marketplace as the first, pervasive collaboration as second and transformation of economy into low carbon/resource efficient economy as third… and when looked at together you have possibly the most significant economic opportunity of the decade.
Let me bring this triangle to life though an example …. And one can choose examples in many vertical areas, but let me start with transportation and personal mobility in particular. I choose personal mobility as it contributes 51% of typical household in a western world. And, learning from it there is no way we should replicate that model in India with half a billion emerging work force….though of course meeting their need for mobility. New wave personal mobility must focus to create a much more sustainable transportation and the right behaviour has a big role to play.
And how do you create the right behavior? When Environment is a matter of ‘public good’ because it’s a shared resource, we can’t expect people, more so in emerging world to pay more in order to turn green. So a creative business model will be one in which private good drives public good; a model that makes it financially attractive for an individual citizen to turn green. For Indian market, it needs to cost less to be green than not to be green.
Some very bright engineers and computer scientists working for Logica, the company I represent, have created a very fascinating system. They have created a technology to connect to the computer of every car that drives on the road. As you know the car is as much a computer as a laptop is or a mobile phone is; this makes a car available on IP network.
When internet came onto its own, imagine how many possibilities got sparked; online retail, online auctions, online bank, stock broking, online search, the list is endless. Once you have a car on the network, there are endless possibilities which can get created. One can now measure the emissions of your drive in real time. Extent of emissions from your car is dependent on your driving style; how do you accelerate and how often do you brake hard?
You bring cars, oil companies, regulatory bodies and government together, as part of what I call pervasive collaboration you can create a business model of future. Every time you go to a fuel pump, you will get fuel refill at a differential fuel price. If your car and your driving style are greener the fuel price is lower; and if your car and driving style are dirtier, the fuel priced is expensive to you.
The system is far more effective in changing behavior than one time tax on big vehicles because when every time you go to a fuel pump and you realise that there is some one behind you or in front of you , who is paying less for the same fuel, it starts working on your mind. And over a period of time, your behavior starts changing, and that of a child too in the car. Our research shows that once implemented this would bring down per capita fuel consumption by vehicles and its associated carbon emissions by 15%.
Adding more to pervasive collaboration platform
You can add insurance companies and an insurance regulator to the pervasive collaboration platform and you can create another business model called “pay as you drive” insurance. Instead of paying for your insurance in the beginning of the year, you could pay it every time you drive, which of course works beautifully for those who drive less and reduces the insurance cost. For insurance companies it reduces risk and for society it reduces driving, as people get sensitised to the fact that apart from fuel, it’s also insurance they pay for and that they can control it.
You want to add more in this pervasive collaboration angle. You bring multi-modal transportation into play, because all the cars are connected and so are taxis, trains, buses and airlines; you could coordinate all of their movement in such a way that they complement each other. So instead of cars transporting air (by means of empty seats) their collaborative play makes full use of all seats and saves more fuel.
This is just one example in this “Economic Opportunity Triangle” that I spoke about. There are of course endless possibilities and many new wave vertical markets get created.
All we need is a creative way at using technology to add value to people’s life in India. And you can find your sweet spot in India’s marketplace.