Opportunities in manufacturing are India's to take in next two decades

Source:Global Times Published: 2016/6/28 0:28:04

India will dominate future manufacturing landscape


Manoj Chugh, president of Enterprise Business at Tech Mahindra Photo: Li Qiaoyi/GT


Editor's Note:

With the theme of this year's Summer Davos in Tianjin revolving around the Fourth Industrial Revolution, or Industry 4.0, and its transformational impact, recasting manufacturing has been put on the priority list of the world's economy, the reform-bound Chinese economy, in particular. On the sidelines of the annual forum, Global Times reporter Li Qiaoyi (GT) spoke with Manoj Chugh (C), president of Enterprise Business at Tech Mahindra, a major information technology provider in India, dipping deeper into the debate about the transition that is under way in manufacturing in the world's two most populous nations.

GT: India is pushing its Make in India campaign. How would you evaluate the Indian government's efforts to catapult India into a global manufacturing power? 

C: With the agenda being set by Prime Minister Narendra Modi, a lot of work is underway, and we are confident in the future the vision he has created will take India on the next journey of success. Manufacturing was important in India, but perhaps somewhere it lost its sheen, so I think it's very important to set the agenda back to say manufacturing is critical.

It will bring jobs, opportunities with the recent liberalization we've seen in the last few days, particularly in foreign direct investment welcoming more and more people, widening opportunities for them to come in.

GT: Tesla has reportedly picked China over India to build a $9 billion production base. Does this indicate that India is at a disadvantage in developing its manufacturing sector and do you believe India is set to be a global manufacturing power in a way that put pressure on China's factory sector?

C: I'm sure different companies have different agendas. I don't think Tesla anywhere said … the company won't come to India at all. They will do what they need to do. I think India continues to be a very vibrant color if you look at the largest manufacturers in the world. They are all in India, as you know, very much like they are here in China. So I'm sure India and China both will be important markets for anyone who has to do business in the long term.

In terms of infrastructure, I think it's in the works, whether it's building roads, ports, highways, airports, we're welcoming investment to come to India, participate in all of these areas.

I think going forward, India actually has a very big advantage in manufacturing. If half of the products are going to be built around digital technologies, a foundation of digital technologies is on software, that's traditionally where India has its strength. So I think if you start looking at the five, or 10-15 years, the opportunity is truly India's opportunity, to take its software strength. However, I don't think India and China are competing, both have to serve their citizens. I look on it as an opportunity, certainly from an Indian perspective. China has done a marvelous job in manufacturing, restructuring its manufacturing, to the next level, both have their tasks, I see them as collaborating in many ways. If there's great component supply from China, they'll certainly want to come to India, participate … likewise, manufacturers in India would like to come to China because China's such a big market. I don't see supply chain competitiveness should favor India over China, the supply chain will be more integrated.

GT: How would you compare the Fourth Industrial Revolution to China's national strategy of "Made in China 2025?"

C: Industry 4.0 is about how we make sure we embrace new technologies and innovation and drive a significant amount of efficiency in automation, and then 2025 is about how China takes advantage of all of these to make sure it can meet its needs. When you look at "Made in China 2025," what perhaps industries are going to look like, over the next 10-15 years, and how that's going to be profoundly different as compared to what we have today. It is my belief that over the next four, five years, 30 percent of the products that you see today are not going to look the same.

Also, if you look at the fundamental technology, which is embedded in the product, that's going to change. And more than half of the product will be digital technology going forward in the future. With digital technologies, you can now bring about much more smartness to the product … [we] can add significant value to the product, because now the product, through sensors, can talk to the cloud. If you look at the fundamental nature of the product itself, digital technologies are going to be more than half of the components of that product. That means when you start looking at "Made in China 2025" and Industry 4.0, the reality of life is a significant amount of automation and important innovation is going to be required. 

GT: What do you think might be pitfalls that would stand in the way of traditional Chinese manufacturing firms' efforts to jump on disruptive new technologies?

C: The reality is if they do not change, they will not have businesses. And there's always this one interesting thing I see happening here all the time, which is in most organizations, people think if this is technology, it is the job of IT, let the IT guy come and do something. What people must recognize is it's not IT; it's a role of everyone, to understand technology, and to integrate it, into the process, into the fundamental way by which they're manufactured. Even if they are small, even if they are private, the country's manufacturing businesses must recognize it's now time for them to change and they must embrace the digital technologies.

The other importance piece China must recognize is that its traditional manufacturing sector needs a whole lot of talent. Because we have around 200 million people who will retire voluntarily or involuntarily in the space of manufacturing over the next few years. People must recognize that you need new talent, different talent, you need people who can understand innovation and disruptive technologies. That presents China with huge opportunities of putting talent who understand things like analytics, big data, the Internet of things, new technologies which are going to fundamentally change the way products will be manufactured … the second challenge is how they attract the talent. 

My suggestions to those organizations would be when you hire from the market, hire people with new skills, and thus are able to add value on top of the product. Don't hire people with the same skills that you already have, which will be less relevant going forward.


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