Prime Minister Modi boldly called for ‘Make in India’. The question is: How to Make in India? What will be the roadmap for Make in India? And, how do we go beyond Make in India — to research, design, develop, produce and thus truly ‘Create in India’?
In our opinion, the answer rests on five pillars.
Human Resource: India’s key advantage is its 500 million youth. By 2016, every fourth skilled worker added globally will be an Indian. But it is imperative to ensure employability of this human resource. As many as 82% of our fresh engineers are deemed to be “unemployable”. Unless the quality issue is addressed, Make in India will yield only low-cost, low-return employment for India. Research needs to be promoted to create new skill sets. This would require significantly higher spending on research from the current $36 billion (in terms of purchasing-power parity), less than 1% of GDP. In 2012, China spent $296 billion on R&D (2%) and the US $405 billion (2.7%).
Capital & Incubation: India incubates around 500 startups a year, China over 8,000. With little investor support and the banking system ill-equipped to assess these businesses, startups are like stepchildren in India. This runs against the global trend of funding innovative startups that rely on a few core competencies to invent products, a phenomenon called innovation capitalism.
We have to be ready to let go of old shackles before we realise new dreams. The Make in India campaign needs to plant and nurture homegrown enterprises than merely become an exclusive fishing zone for large MNCs. People should be encouraged to fund the campaign. Indian households hold gold worth $1,160 billion, more than half our GDP. Gold bonds linked to Make in India enterprises could be an option to explore.
Tech Infusion: Technology provides developing economies the ability to leapfrog certain stages of development. Our mobile phone revolution, for instance, leapfrogged the landline stage, growing from a million mobile connections in 1999 to over 700 million by 2013.
We need to build collaborations across nations based on technological abilities. A shining example is the BrahMos (Brahmaputra-Moscow) Cruise Missile co-developed by India and Russia. While India brought its knowledge in developing the targeting mechanism, Russia contributed with the propulsion system. It gave both nations the capability to develop and produce perhaps the best cruise missile system in the world, with a business volume of about $7 billion.
Today, India has world-class ability in IT, communication, pharmaceuticals and space — let us find collaborations for them. What do we need to leapfrog here? The stage of environmental degradation associated with manufacturing. Make in India, Make it Green.
Building the Ecosystem: Large telecom penetration is not good enough. Manufacturing requires infrastructure: it needs roads on which large trucks can run, it needs ports, and it needs a system that operates all this without hassles — and without corruption. As a democracy India is most conducive to breeding new innovations, but is hindered by the lack of proper intellectual property rights. Indians’ contribution to patents filed globally is less than 1%; Chinese account for 32%.
Domestic Consumer Leverage: Our vast consumer base has to be used as an incentive, to create collaborations with foreign companies. The untapped market is in the villages, with 70% of India’s population. Can it be the opportunity to propel Make in India?
Many people question, how can India — with its dreaded red tape and corruption — truly be a manufacturing powerhouse. The answer is perhaps still evolving. However, necessity is the mother of invention. Remember the beryllium diaphragm.
(Source: Extract from an article in the Times of India dated 18-01-2015 by Shri A.P.J. Abdul Kalam, former President of India & Srijan Pal Singh who heads 3-Billion Initiative, an NGO for sustainable development)
