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How can india become globally competitive
1. How can India become Globally
Competitive? (w.r.t-GCI)
Presented by -
Shwetan Burkule
2. Flow of Presentation
Definition - Global Competitiveness
Importance
About GCI
12 Pillars for determination of GCI.
India vis-à-vis the world
Obstacles for India to be globally competitive
Steps for Attaining Competitiveness
Solutions for becoming globally competitive
References
3. Global Competitiveness
Global Competitiveness definition - Ability
of nation to provide quality products and
services at competitive prices thereby
providing adequate returns.
Competitiveness is the Comparative
concept of the ability and performance of a
firm, sub-sector or a country
4. Importance of global
competitiveness
To increase Productivity.
To encourage FDI’s.
To increase the living standards.
To maintain the balance of trade between import
and export of an country.
To gain macro economic stability.
For the economic development of the country.
5.
6. Global Competitive Index - GCI
GCI Definition - An international ranking of countries which
uses economic and other information to list countries in order
of their competitive performance.
Developed for the World Economic Forum by Columbia
University Professor Xavier Sala-i-Martin and originally
introduced in 2004.
The Pillars include:
Institutions, Infrastructure, Macroeconomic Stability, Health &
Primary Education, Higher Education & Training, Goods
Market, Efficiency, Labor Market Efficiency, Financial Market
Sophistication, Technological Readiness, Market Size,
Business Sophistication & Innovation.
8. 1. Institutions
Public Institutions
Private Institutions
2. Market Size
The PPP decides Market size of the country.
The Consumption pattern of the consumer.
9. 3. Infrastructure
Overall infrastructure quality
Railroad infrastructure development
Quality of port infrastructure
Quality of air transport infrastructure
Quality of electricity supply
Telephone lines
10. 4. Macro economic stability
Government surplus/deficit
National savings
Inflation
Interest rate spread
Government debt
Real effective exchange rate
11. 5. Health and primary education
A. Health
Infant mortality
Life expectancy
Tuberculosis prevalence
Malaria prevalence
HIV prevalence
B. Primary education
Primary enrolment
12. 6.Higher education and training
Quantity of education
Secondary enrolment ratio
Tertiary enrolment ratio
Quality of education
Quality of the educational system
Quality of math and science education
Quality of management schools
On-the-job training
Local availability of specialized research and training
services
Extent of staff training
13. 7. Goods Market efficiency
Distortions
- Efficiency of legal framework
- Extent and effect of taxation
- Number of procedures required to start a business
- Time required to start a business
Competition
- Intensity of local competition
- Effectiveness of antitrust policy
- Imports
- Prevalence of trade barriers
- Foreign ownership restrictions
Size (Export & Import)
14. 8. Labor Market Efficiency
Flexibility
- Hiring and firing practices
- Flexibility of wage determination
- Cooperation in labor-employer relations
Efficiency
- Reliance on professional management
- Pay and productivity
- Brain drain
- Private sector employment of women
15. 9. Financial Market Sophistication
Ease of access to loans
Venture capital availability
Soundness of banks
Local equity market access
17. 11. Business sophistication
Networks and supporting industries
- Local supplier quantity
- Local supplier quality
• Sophistication of firms’ operations and strategy
- Production process sophistication
- Extent of marketing
- Control of international distribution
- Willingness to delegate authority
- Nature of competitive advantage
- Value-chain presence
18. 12.Innovation
Quality of scientific research institutions
Company spending on research and development
University/industry research collaboration
Government procurement of advanced technology
products
Availability of scientists and engineers
Utility patents
Intellectual property protection
Capacity for innovation
19. How to be Globally Competitive
Need to address one basic question:
Why are the heavyweights of India so lightweight globally?
Reason is that either we have not aspired to go global or we do not have global orientation.
Global Repositioning of India Competing in Global Market
20. Competitiveness among
BRIC and India
According to Goldman Sachs
report on 22nd Feb 2008, India
is the more economic growth
engine among the BRIC
nations.
This is because of
improvement in the ranking of
PPP (Purchasing Power
Parity) of India from 5th to 4th
position.
Also India is the youngest
country in the world as
compared to BRIC and other
developed economies like US
and JAPAN.
21. Contd.
In order to emerge as a global hub, India would face
competition from other low cost countries such as
• China
• Thailand
• Brazil
IMaCS has compared the cost competitiveness of India
with respect to these countries in terms of factors like
• Taxes and duties
• Cost of manufacturing
• Economies of scale
22. Obstacles to India for being
Globally competitive
Ever Increasing Population
Widespread Corruption related to tax collection,
exports, custom duties, government offices.
Poor Basic infrastructure such as roads, water
and electricity.
Inaccessibility to internet, telephones, mobiles.
Poverty and apathy towards education.
Apathy towards R&D and non parallelism
between industries and education undertaken.
23. Steps for Attaining Competitiveness
Growing Trend of acquiring Foreign Companies.
Competitiveness is mainly attained by India in sectors
like:
IT & ITES, Pharmaceuticals, Textile
eg- SWITCH companies and Pharma gaints like
Ranbaxy, Dr.Reddys, Piramal etc.
Competitiveness is yet to be attained in major sectors
like:
Agriculture and Allied Business Industry, Manufacturing,
Automotive, etc.
24. Solutions for becoming Globally
Competitive
As lndia integrates into the world economy, there is a
need to reposition itself as a country.
Branding of India has thus become the necessity.
The casual approach needs to be shredded off and
professionalism be developed.
To achieve this objective, lndia needs to reengineer
itself in the following areas:
25. Solutions Contd.
Privatization of public enterprises;
Incentives for quality;
Innovation and productivity;
Employment through growth;
Globalization of domestic markets;
Investment in quality and innovation;
26. Solutions Contd.
Process reengineering;
Reduction in unorganized sector.
Up gradation of transport and logistics;
Special economic zones and energy reliability. Strengthening rural
sector growth
Improving access to assets and sustainable natural resource use:-
Balancing poverty reduction and conservation priorities