The Indian economy, often derided for its slow pace of reforms, is reaching a point of breakthrough growth. While the last phase of growth was a result of government-led reforms in 1991, this phase is being launched through a much wider coalition of citizens, corporations, entrepreneurs, investors and the government.
India faces a number of obvious and some behind-the-curtain problems. Education, health, power, infrastructure are just some of the areas that suffer from lack of investment and imagination. But these very sectoral challenges can act as a call for solutions that can spur growth. However, the scale of solutions for a nation approaching 1.3 billion people, the complexity of a diverse culture and the need for time-bound outcomes calls for a new growth approach that takes inspiration from India's past but must break new ground. We [PwC] term the approach as the 'Winning Leap'.
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The corporate sector and multinational companies in particular are still reacting slowly to these impending shifts. How do they build new capabilities that will allow them to shape these winning leaps in their respective sectors? Our research points to five key themes that will influence where and how they build new capabilities. The new customer will be far more empowered and informed relative to today, operating models will have to be more flexible, and resources and partnerships needed for the Winning Leap will draw upon non-traditional sources. The approach to innovation and R&D has to make a profound shift, and accountability, integrity and diversity has to be hewn into the organisation's DNA.
While many would like to confine the role of the government to facilitating and easing economic activity, our research throws up an important second task - building national platforms. The Winning Leap will only take place if we create strong digital and physical infrastructure over the coming two decades. This may require execution by the private sector, but the orchestration of these platforms requires the convening power of the government. The creation of the National Optical Fibre Network (NOFN) is one example of enabling infrastructure that can transform small town and rural areas if implemented with speed and precision.
However, the mindset shift required for the Winning Leap has to go beyond the corporate, entrepreneurial or government sector. It has to be powered by a much wider respect for enterprise, and a new way we think about our resources. Instead of looking at citizens as passive voters or employees, we need to consider them as innovators and entrepreneurs. Instead of looking at our middle class as a consuming class, we need to think of them as a producing class. Instead of focusing on a national narrative, we need to consider a state- and district-level narrative to decentralise economic activity. Given the highly connected world that is emerging around us, businesses need not start with the economic boundaries of India, their get-go thinking has to be global.
To create the $10 trillion economy by 2034, India will need approximately $34 trillion cumulative investment. But where and how this investment is directed will decide if the Winning Leap will materialise. Unless India reorients its approach to human, physical and above all intellectual capital, growth will be linear and pyrrhic as it will not improve productivity required to accelerate economic growth. Other roadblocks in physical security, energy scarcity, climate change can also come in the way of India's Winning Leap. The recent Ebola global scare and a weakening Chinese economy are examples of extraneous factors that could also slow down India's growth.
Growing at the current 5.8 percent GDP growth and even with a projected growth of 6.4 per cent for next year, a nine per cent year-on-year growth seems dramatic. However, if India is to produce the 240 million jobs that it needs over the next 20 years, anything less will simply not be enough. With a concerted effort, on the other hand, India can use this once-in-a-lifetime opportunity to take a growth path that is both radical and sustainable. This path needs to bridge the false choice between economic and human development goals. It outlines why India's Winning Leap will not only grow the economy radically, but also bring prosperity to its 1.5 billion citizens in 2034. Those of us lucky to live in these times will bear witness to the largest nation-building exercise attempted in human history.
(The author is Leader Strategy at PwC India. Views expressed are personal)