Understanding hard skills and soft skills..!!

In the 1970s and 80s, recruitment in companies and growth in the career were measured in terms of hard skills possessed by a candidate.

---

The first step in developing good soft skills is to unlearn the negative traits developed and re-learn.

---

One of the fashionable terms floating around these days is “soft skills.” But what exactly are these soft skills? If we have a term ‘soft skill', does that mean there are also skills which are hard?

‘Skill' as defined by the Oxford Dictionary is “The ability to do something well.” And management gurus relate soft skills to emotional quotient and define soft skills as “a cluster of personality traits.”

During the 1970s and 80s, recruitment in companies and later growth in the career were measured in terms of hard skills (Intelligence Quotient) possessed by a person.

“These included knowledge in a particular field, experience in working on a set of machines, ability to apply theoretical knowledge to practical use, logical and analytical reasoning, etc. Most of these skills are generally imparted as a part of the academic curriculum at school and college and therefore an academically successful student was expected to succeed in life and career too.

However, over a period of time, the dynamically changing society, technology and economy have brought about a phenomenal shift in the skills required for a person to succeed in career and life.

“This sea change was precipitated by many developments which inter alia include the macro-economic shift from secondary sector to tertiary sector, the enhanced complexities in work places like the increased emphasis on team work, greater participation of women and the concomitant gender sensitivity and also superior benchmarks of quality and pace,” says Mohammed Abdullah, director of Conduira, a training and placement institution.

Recent studies clearly point out the fact that irrespective of the industry, job type or rank, there are a few traits that high performing individuals possess.

“Typically, soft skills can be defined as the skill that enables an individual to engage and interact effectively with others, obtain acceptance, build consensus and provide assistance, leadership and direction,” says P.V. Rama Sasank of Conduira.

The hard skills are usually easy to observe, quantify and measure and thus easy to train and acquire.

However, soft skills — being more behavioural in nature — are a result of various influences and interactions one has had in his or her life since childhood. These influences have long term implications — both positive and negative.

Hence, most of the individuals, by the time they reach an age of employability, already possess a few soft skills — positive as well as negative — and therefore soft skill training includes a lot of unlearning and re-learning issues.

“Many students confuse the concept of soft skills with English communication skills. This is not really true. Communication skills are very much a part of the soft skills, but only a ‘part'.

Soft skills go much further enabling the individual to discharge his or her responsibilities in the most effective and efficient way possible both at work and at home,”.

What are the soft skills that organisations look for in a candidate who is just entering the workforce? “Primarily the companies look for the ability to learn. In addition, companies today are surmounting geographical barriers and as a result, teams often comprise employees from different cultural and geographical backgrounds.

Being able to appreciate these diverse views and assimilate them is a challenge and recent graduates are expected to adapt to these changes as soon as possible. Further, in a multi-cultural team, an ability to communicate becomes extremely important and fluency in business language English is a must-have requirement rather than just a good-to-have skill. Business meetings over telephone are norm of the day and e-mail has become the standard business communication. Therefore a student is expected to have good written communication skills too — non-ambiguity, conciseness and crispness being the desired parameters.

The biggest challenge, a student faces when he is on board, is the ability to work in a team. “And last but not the least, companies often place good faith in their employees and often give them sizeable responsibilities very early in their career. It is not surprising to find a 25-year-old leading a 30-member team and being responsible for revenues up to Rs. 500 crore. In such a scenario, ethics and integrity become supremely important,”.

The first step in developing good soft skills is to unlearn the negative traits developed and re-learn. Unless they have seen success in applying a new skill or method, they are not convinced that a change is required.

What's the name of your gift ????????

September 5 is Teachers' Day. A look at how some teachers touch the hearts of their students. Just a bit of kindness, a dash of wisdom and a sprinkling of love.

Sakshi raced up the stairs her schoolbag dangling from her shoulder. She guessed it right. Her friends were chatting in the corridor. While nudging her way past the other children so she could spend a few minutes with her friends before her teacher arrived, she collided with someone she thought she should not have. Her class teacher looked bemused. Sakshi blinked innocently. Her snack bag with water bottle almost fell when her teacher asked, “Can I keep it for you?”

Abdul thinks the world of his teacher who doesn't speak English very well. Her voice is not sweet for she has to be really loud in class so that even the sleepiest child is attentive. She is well mannered and gentle but does not accept excuses. Children flock round her table and ask how her Sunday was. They also know that if they hadn't done their homework, they will be made to miss activity period. Abdul, however, has only one thing to say. For all the years he will have to spend in school, he wishes his teacher would be promoted along with him, from one class to the other.

They care

Netra and Surya cannot stop talking about their teacher. “Oh she is so good,” they say. “Good?” I ask. “How do you know she is good?” Summer holidays were longer than usual but when school reopened textbooks weren't ready. Only one book was available and that was with the teacher. But when lessons were taught, the entire class would follow word by word as the teacher read aloud from the book. How? The teacher would, every single day, write down the page to be taught on the blackboard, till textbooks were given to the children ten days later. “Our teacher wanted us to know what she was reading. She made sure we didn't take our eyes off the board. We love her for writing out pages for us,” they say.

Do children really care if their teacher taught them well or not? Of course they do. Every student has an ability to evaluate the teacher. They can quickly identify the teacher who knows the job from the one who doesn't. In fact, behaviour patterns of the students largely depend on the kind of teacher they have.

Ved keeps asking his teacher why she wears more than one ring on her finger. If wedding ring was one, what was the other for? Dayanita likes it when her teacher pleats her saree and pins it to her blouse. She says it makes her look “neat”. Even mannerisms are made much of. The teacher who nods her head with a smile is remembered and spoken fondly of.

It is hard to believe but true. Children seem to appreciate the teacher who bothers to ask why they missed school when they get back after a day's leave. And when the teacher is away for a day, she is enquired of her absence too, the very next day!

Who's a “good teacher”? Taking notes from what children look for in a teacher, it is fair to call a good teacher a gift. The child who gets to learn from such a teacher is gifted. Creative wisdom, beauty of character, a kind heart and knowledge that endures are wished for every teacher today.

Deepti's views sum up the need every child feels for in a teacher. “I am fine in school. My teacher is like a mother. Just one more exam to go and I can do what I want. My teacher said so.” I turn to the teacher. Deepti had been asking her teacher if she could wear nail polish to school. The teacher had said yes, a white polish, after the exams!

A celebration

September 5 is the birth anniversary of Dr. Sarvapalli Radhakrishnan. He was a diplomat, scholar, philosopher and the President of India. It is in his memory that this day is celebrated as Teachers' Day.

In 1962, when he was the President some of his students wanted to celebrate his birthday. But Dr. Radhakrishnan said, “instead of celebrating my birthday separately, it would be my proud privilege if September 5 is observed as Teachers' day”. From then on, the day has been observed as Teachers' Day in India.

The soldier needs the nation's attention..!!!

India today exists in a seriously embattled security environment, more than ever in the last 63 years, with external military threats and the difficult situation in Kashmir, besides the Naxalite movement having acquired dangerously devious contours. Our armed forces have determinedly and innovatively strategised to meet the expanded threats.

Our armed forces have won wars and tackled insurgency and terrorism with effective leadership and sacrifices. The accounts of their bravery and valour are well known. Their morale is high and the men and soldiers are highly motivated to safeguard the nation's sovereignty and integrity.

Though the Army has not fought a full-blown war in the last three decades, it is bogged down in fighting domestic insurgencies, guarding the restive borders, responding to requests for quelling civil riots, tackling insurgency, and terrorism, and rescue operations during natural calamities. These have a put a tremendous stress and strain on the soldiers.

Surprisingly, there has been a sharp rise in suicides in the Army in the past five years. The trend in the third largest and one of the best disciplined armies in the world is a cause for grave concern. Over 100 soldiers have taken their lives in last three years under extreme pressure, mainly poor service conditions leading to frustration or rebellion.

Discipline is also becoming a casualty. The armed forces have held a staggering 6,000 courts martial since 2000. The latest statistics show that the Army alone court-martialled 1,215 soldiers in 2000; 1,034 in 2001; 1,031 in 2002; 945 in 2003; and 872 in 2004. In just the last two years, over 20 rape and 10 murder charges have been levelled against soldiers.

And it is not only the “lower ranks” that have been afflicted. It is true even of officers. Last year, around 30 officers were convicted in court martial proceedings. But, unlike other agencies, the armed forces deal “swiftly and effectively'' with “aberrations and delinquents.”

Of late, even a Lieutenant-General and two other general officers have been in trouble for alleged involvement in West Bengal's Sukna land scam. A retired General has also been court-martialled in a scam over provision of unhygienic food to the troops in Siachen.

What the services need is high quality leadership which can motivate the rank and file in times of challenges. One reason for poor leadership is that the military is the last priority for bright young men due to various factors.

The soldiers' pay and allowances are less than that of a skilled labour in industry. The defence forces are the lowest paid service and in a state of neglect. Our soldiers retire at the age of 34 in the prime of their youth when they face loads of responsibilities. The officers retire at an average age of 52 when they have another 15 productive years.

Then there is no coordination between the Ministries of Home and Defence; otherwise, all the officers could have served up to 60 years through lateral entry. Fourth, the downtrend in the warrant of precedence has brought down the image of the defence services.

Finally, deterioration and corruption in all walks of life — our politicians, educationists, media barons, bureaucrats and even judges are not immune to the ills of filthy lucre and moral turpitude. The armed forces too are no exception.

Pray, is this woman power at all ????????

BEAUTY PAGEANT:The Miss Universe 2010 contestants in Las Vegas.

I watch Miss Universe every year and every year I try to figure out why anyone would combine swimsuit modelling with world peace. It's like adding apples and oranges.

Quite frankly, this is a competition where size zero – or even smaller (is there something like size minus one?) – models from around the globe compete with one another, by walking the ramp with attitude and wearing everything from gowns to bikinis. They have perfect hair, a perfect pair of legs and yet their ultimate goal is to spread peace and save the world from global warming!

They say these women represent girl power. Exactly what power are we talking about? Is it that women are nothing but pretty faces who fight the wrongs in the world (for a whole one year as per contract) and yet look gorgeous as ever? Because most women I know don't have that power. Are these women's passions toward world peace actually real? What's the guarantee that they are not in it just for the fame? I back my doubt with the fact that most participants of our national beauty pageant end up in Bollywood as the lead heroine or some item girl or other. Whatever happened to world peace?

I think it's time they stop telling us that these pageants represent the power of women. It has got nothing to do with woman power and has got everything to do with pretty girls who want to make it big in the fashion/film industry. Please, woman power is not so petty..

Hey, it's still a man's world..!!

The prejudice that women face is still present. Only, it has learnt to hide itself better.

It has been said that we now live in an egalitarian society, with little discrimination between the sexes, if any, and freedom for all. This self-congratulatory attitude, however, is a grave impediment to actually achieving such a thing. Only the blissfully ignorant would be unaware of some of the truths that stare us in the face today — it is still a man's world, despite the general feeling that sexism is nearly extinct. It is true that the blatant disregard for women's rights that was prevalent in the times of Kamala Das and Emma Goldman is no longer such a great issue in many parts of the world. On the other hand, this progress has also allowed the emergence of a new, equally frightening kind of bigotry.

The prejudice that women face is still present. Only it has learnt to hide itself better. It has become something that insinuates itself into our subconscious minds, creeping into every hollow of our lives until we are no more conscious of its presence than we are of breathing. And it reveals itself in the most innocuous of ways, like how in a marriage the wife is expected to leave her life behind and move when her husband is offered a better job elsewhere; how women are portrayed in movies as being servile to men, and in how men and women in the workplace are given subtly different treatment. These assumptions of behaviour that we make are dangerous ones. Ursula Le Guin's The Left Hand of Darkness is a fascinating look into how a society functions without separate genders.

The “glass ceiling” that is so often talked about in the workplace isn't so much a ceiling as it is a kind of women-specific gravity. Bosses needn't be misogynists, but they can overlook women when it comes to promotions or important assignments. It was easy to give women the right to vote and to education because doing otherwise would involve active oppression. Whereas, trying to overcome the almost instinctive desire of preferring a man to a woman for something when unearned would involve initiative, and overcoming the inertia of bias.

Then there are the bolder, more visible signs that nothing at all has changed. Everyday, there are reports — that read more like horror stories — of women being raped and killed in alleyways, molested by the very people in whom the public is supposed to place its faith, trafficked in inhuman conditions and treated like slaves. The social double-standard is also still firmly in place. In India, any family would prefer a fair-skinned, slim and tall daughter, if they must have one at all. Sons, on the other hand, are welcome in whatever colour, shape or form.

Parents desperate for male children still murder their infant daughters in brutal ways; women on roads and in other public areas are still fair game for people to leer and make passes at, while crowds of passive onlookers look on; wives are still expected to bear the brunt of household chores, duties and taking care of the children even if they have jobs themselves. The disadvantages of being a woman today are not so plain — but like wounds that appear healed when they actually fester underneath — are still present.

People cannot claim to belong to a truly progressive society unless any and all prejudices based on sex and other such ‘differences' are erased. It has taken us several decades to come this far, but it needn't take several more to scrape away the remnants of old habits. Women definitely have more freedom now — socially and economically — than in the past. But that men and women are treated even nearly as equals, is up for solid debate...

Happy Reading..!!

Made in China: The Evolution of Design

What are the design elements and principles that have emerged from over 1,000 years of producing products sought by the world?

China wants to be more than just the “factory of the world”. While China’s economic strength for decades has been built on the might of its manufacturing sector, policy-makers are currently attempting to steer the economic ship away from the production of low-cost goods. Amid this massive paradigm shift, Chinese enterprises across industries have realized the importance of design in bringing their companies, and the economy writ large, up the value chain.

China has a rich tradition of domestic design capability and has exported design concepts to the rest of the world for centuries. Yet, historical and cultural factors disrupted this process and Chinese designers today find themselves playing catch up with their Western counterparts. However, there are encouraging signs that Chinese design may soon change the identity of the “Made in China” brand.

Many Chinese factories for decades operated on an OEM (original equipment manufacturer) model, in which they produced goods based on foreign designs. Companies have now recognized that the next frontier for China will be the establishment of strong domestic brands, which will necessitate a shift to an ODM (original design manufacturer) model. It is hardly an easy shift, and many, particularly those in the Chinese garment sector, recognize that their design talent continues to lag that of their foreign competitors.

China’s history as an OEM manufacturer, however, may also give it an edge. Manufacturing of goods destined for export was the first step in a continuing internationalization process for China’s designers. Furthermore, China’s manufacturing sector has made an art of the speedy production of goods tailor-made to client demand. As such, the mainland has an unparalleled ability to quickly implement design.

Yet, the new generation of Chinese designers face significant hurdles. There are over 1 million design students on the mainland, but most of them have little understanding of the market’s demand for their services. Young designers also lack the relationships to secure plum government contracts – a major industry driver in China. As a result, government design contracts go to senior designers. The few Chinese enterprises that recognize the importance of design prefer to hire more experienced foreign designers who will work hand in hand with the client throughout the entire project.

Nonetheless, China is approaching a tipping point in the global design industry. Chinese designers are swiftly boosting their capabilities, while garnering the respect of their international peers. Furthermore, the sheer size of China’s consumer market suggests that future global design will be aimed at satisfying the demands of the Chinese consumer. It is a transition that could mark a new day for Chinese design, and domestic designers would be wise to begin preparing now.

Some suggest that China could take a page out of Japan’s playbook. Japanese designers in the 1980s shifted their focus from the export market and sought to reinterpret traditional colours, shapes and textures into their products. Today, Japanese brands such as Muji have championed a modern and quintessentially Japanese aesthetic that has found a market at home and abroad. Ultimately, China’s designers face the same problems as designers around the world. The goal is not to create “Chinese design” but rather “appropriate design” that meets market needs and can help spur innovation.

Happy Reading..!!

Finding a Growth Strategy in the Post-Crisis World ..!!

Despite some headline grabbing, global merger and acquisition volumes are 38% lower than a year ago.

How are major industries rethinking and redesigning future growth models, at home and abroad?

Key Points
• The world will return to growth but it will be a jobless recovery and the economic recovery will vary across regions and countries.
• Companies must remain flexible and innovative to meet shifting purchasing patterns and more demanding consumer needs.
• Organic growth funded by internal cash flows is preferred to debt driven mergers and acquisitions in the new economic environment.

Synopsis
The extent and quality of the economic recovery is the big debate. The US administration says that the freefall has stopped. The IMF upgraded its prediction of world growth in its most recent estimate. However, others such as the World Bank and some independent economists are more negative on the subject. A recent survey found that most observers think there is a recovery but that it remains fragile. The role of sentiment is critical.

The recovery will likely be lumpy and vary by country and by market. Recovery will rely on increasing demand and increasing GDP. However, it is likely to be a jobless recovery since there is excess capacity in the system.

The shape of the recovery will also vary across regions. Western Europe faces an “L shaped” recovery (a longer recession). The US faces a “U shape” (growth will return but not right away). Asia, Latin America, Africa and the Middle East are all well positioned for a “V shaped” recovery (rapid bounce back).

Business leaders need to understand what the new environment will look like. The economy before the crisis was not “normal” and will not return to that situation. There was an extreme expansion of credit that will not be repeated.

For companies to thrive in the post-crisis era, innovation is the key. Innovation is the essence of value creation, and the ability to reinvent business models. When companies diversify, the businesses should complement each other and allow for innovation. There is also need for new business models. Consumers are challenging the old model. Today’s consumer is setting a new standard, looking for new products and new ways of buying things. This is creating a transformation agenda for businesses in meeting this need.

The appropriate business model depends on the situation. There is no silver bullet. Whether a company should be diversified or focused, there is no “right answer”. It needs to be what fits and works. But it is clear that if a company is not successful in one market it is unlikely that it will be successful in others. And for diversification to work, the company cannot have a “top-down” centralized model – flexibility and some decentralization are needed.

Organic growth is always the strongest way for a company to grow, but acquisitions are the quickest way to get there. However, mergers and acquisitions need to be done right. Two drunk people don’t make a stable person. Some Chinese companies have expanded internationally, but not all stories have a happy ending. They have found that there is just as must potential to destroy value as to create value. Issues such as higher labour costs and major cultural differences in Europe and elsewhere are difficult to overcome. All risks need to be considered, and there has to be an underlying purpose for acquiring a company. It needs to link to the overall strategy and what value it will bring. Size itself is not enough to do this. Following mergers, companies then need to be aggressive about driving integration.

Happy Reading..!!

Finding the New Shoots of Growth..!!

As the global economy begins to exit from the deepest recession since World War II, the recovery is expected to follow a different path from those of recent memory.

What, and where, are the new drivers of growth?

Key Points on the Topic
• Economic crises are often accompanied by rapid periods of innovation. New business models and technologies emerge from the ashes to become the new drivers of growth.
• China, India and Africa will lead global growth in the coming decades, particularly in sectors such as renewable energy, information and communication technologies, and biotechnology.
• The Middle East is becoming more integrated globally and will become an important new source of demand as well as a source of capital.
• Innovation does not come without R&D and strong science and technology capabilities. Governments can help by funding these activities, while new businesses and new frameworks of collaboration are necessary to get innovations to the market.

Synopsis
Both government and business play a crucial role in the process of creative destruction. Governments can provide funding for early stage research and development and provide a “test” market for new concepts (e.g. Chinese municipalities trialling electric bus fleets). Policy-makers need to create an environment which encourages entrepreneurial activity (e.g. open economies, tax systems which support R&D, commitment to diversity).

Entrepreneurs and small to medium businesses can identify and meet new demands and new needs. Many great companies were launched in times of crisis and grew to dominate their industries.

In China, there are huge opportunities over the next two decades as the middle class emerges and domestic consumption takes hold. New shoots of growth will include renewable energy and energy efficiency (e.g. solar, wind, LED lighting, fuel cells); healthcare and biotechnology; convergence of IT networks and roll-out of broadband); advanced manufacturing and new materials emerging from nanotechnology. The challenge for China will be to make the transition from an export-dependent economy to one which is based on domestic consumption and services. India is also well placed to benefit from the rise of renewable energy (particularly solar) and efforts are focussed on reducing the cost of solar energy to below that of hydrocarbons.

Africa will be a new driver of growth, especially in the aquaculture, biotechnology and renewable energy sectors. With some countries growing in excess of 8%, the continent offers enormous opportunities and is roughly where China was 10 to 15 years ago. The abundance of mineral resources is well known, but there is also untapped human potential. The quantum leap will come as new information and communication technologies take hold.

In the Middle East, innovation has traditionally been impeded by large government involvement in the economy. With the process of privatization now in full swing, government-controlled assets (airlines and media) are transitioning to private ownership. One fertile area for new opportunities which can exploit the abundance of oil is the development of products which use oil as a key input (moving up the value chain).

New collaborative models will likely emerge, such as arrangements to share intellectual property as well as open innovation (use of external resources and ideas). In this respect, the cross-border cooperation demonstrated by the G20 in response to the financial crisis is a good model.

Happy Reading...!!!

The Rise of Economic Nationalism ..!!

Which industries and regions are most threatened by new forms of economic nationalism?

Key Points
• The global crisis has raised concerns about the adoption of protectionist measures to support domestic industries and please public opinion.
• Despite the severity of the crisis, only a few countries have resorted to such measures, and in a limited number of industries.
• The multilateral trade system (MTS) is under constant threat. Politicians must exhibit stronger leadership in supporting it.
• Fairness and equality of treatment by major trading partners is crucial when negotiating with developing nations.
• While the disastrous effects of protectionism on developing countries are all too obvious, it also negatively affects advanced economies.

Synopsis
The severity of the current crisis has made protectionism increasingly popular. The adoption of measures to support local industries may seem appealing at first and provide some temporary benefits. However, their consequences in the longer run are disastrous because of the retaliatory measures likely to be taken by affected countries, the distortive effects, and the impact on access, prices and variety.

Fortunately, there has not been a major move towards protectionism as the majority of governments around the world realize the positive role of trade in their recovery. Rather than resorting to protectionism, they have been trying to fix the problems that led to the crisis and adopting new international financial regulations. The unprecedented drop in trade over the past 18 months is not the consequence of protectionism but merely the result of collapsing global demand.

Yet, the MTS needs stronger support. Governments need to resist the pressure to adapt populist measures exercised by the electors, labour unions and domestic industries who are most affected by international competition. Their suggestions, all the more persuasive in times of crisis, provide temporary fixes. Governments must exhibit strong leadership and work at convincing all parties of the benefits of pro-trade policies. The latest decision by the US to raise tariffs on tyre imports from China, if confirmed, could have dreadful consequences, such as triggering a cascade of retaliatory measures or damaging the framework of the MTS.

The difficult negotiations of the Doha Round, which trade ministers will attempt to revive next week in Geneva and later at the G20 summit in Pittsburgh, is another reminder of the fragility of the system. To conclude the Doha Round, governments will need to make concessions and be both visionary and reasonable. More work awaits negotiators after Doha, especially regarding the proliferation of regional and free trade agreements. As these agreements create trade among participating countries at the expense of others and violate the most favoured nation clause, governments will have to agree to extend these bilateral agreements to all WTO members.

Besides its fragility, the fairness of the MTS is also the subject of debate. Developing nations resent that advanced nations still seem to dictate the rules of the game. Despite its flaws, the MTS is one of the most successful models of international cooperation.

Happy Reading..!!

Building a Sustainable Value Chain ..!!

The EU highlights that if the rest of the world adopted European lifestyles, the resources of two and a half planets would be needed to support consumption.

As consumption trends towards sustainability in major economies, what will be the future business model for manufacturers and retailers in advanced and developing economies?

Key Points on the Topic
• Sustainability is firmly taking its place on the business and global agendas. It is no longer a fringe discussion or “nice to have”. The prospect of a price on carbon, water scarcity and resource constraints are forcing action.
• Many economies and companies have been built on cheap credit, stable energy and commodity prices, and rising consumer consumption. Sustainable success in the post-crisis world will depend on innovation and collaboration.
• Companies caught flat-footed will miss market opportunities and face both community backlash and regulatory risk. Sustainability should be central to the business mission and a source of competitive advantage.
• Consumer demand for sustainable products is growing rapidly, but it is difficult for consumers to make informed decisions due to information overload (“sustainability spam”) and complexity of the issues.

Synopsis
There will be a tripling of the global middle class over the next two decades, as 2 billion new consumers enter the middle income bracket. If lifestyles of the average European or North American were adopted, the world would need more planet Earths to sustain the populace. In short, current consumption trends are fundamentally unsustainable.

This sustainability challenge poses both a threat and an opportunity. If left unchecked, the human race will face the “ultimate tragedy of the commons”. On the other hand, providing for the next generation of consumers in a sustainable manner presents an enormous opportunity for global businesses.

Companies which have taken the lead on sustainability demonstrate that there is no “impossible trade-off” between profitability and sustainable products and practices. They are also integrating the supply chain by helping suppliers reduce waste, improve energy efficiency, use innovative packaging and adopt closed-loop systems. At the same time, these leading companies are showing consumers that there is no need to sacrifice price or quality for sustainability.

National and local governments are supportive and continue to seek ways to level the playing field and price externalities without compromising development or living standards. The private sector will need to work with government, civil society and the media to help shape policy that aligns incentives for migration towards a sustainable economy.

However, incremental change is not enough. Radical changes are required. It is hoped that the “sustainability crisis” can be approached with the same sense of “can-do” spirit that was applied in response to the economic crisis.

Happy Reading..!!

A Sustainable Road to Development and Growth ..!!

A sustainable global economy is premised on business leaders and policy-makers developing holistic strategies for energy, agriculture, infrastructure and water.

How can policy-makers and business leaders work together to adequately create these synergies?

Key Points
• Various supply and demand forecasts on energy, food, water, and other goods and services indicate serious shortages by 2030.
• But in addressing one problem, the world often creates unintended consequences in other areas because the issues of sustainability are complex and closely interlinked.
• A multistakeholder approach and integrated policy response are required to unravel the complexity of the problem.
• International institutions must also be restructured, a global body created to serve as honest broker and holistic action taken on the regional level.

Synopsis
The World Food Programme estimates that food production must double over the next 40 years to meet projected demand. If agricultural businesses continue to operate as they do today, warns the International Water Management Institute, there would not be enough water to meet the needs of a world population of 9 billion people expected in 2030.

For its part, the International Energy Agency (IEA) forecasts a 45% increase in energy demand by 2030, one-third of which will be met by burning coal. The IEA also estimates that 269 trillion litres of biofuels must be produced per year by 2030 just to account for 5% of total road transport fuels, a significant increase from today’s ethanol production of 368 billion litres.

These issues are closely intertwined. For example, the world will consume dramatically more sugar for food and to produce ethanol by 2030, but an explosion in high-intensity sugar cultivation risks encroachment into forest land, draining of rivers, damage to biodiversity and social problems as smaller farmers are forced off their land.

The push and pull of competing needs require a multi-sectoral approach and a policy package that addresses both supply and demand. On the supply side, trade and energy policies must be reformed so the right incentives encourage sustainable sugar production. Tariffs and other trade barriers must be removed to allow the market to function effectively.

On the demand side, the desirability of sugar as food can be decreased by communicating the downside of consumption on people’s health and the negative impact of intensified cultivation on the environment and farming families. Investments in biofuel technologies that can produce alternatives to sugar-based ethanol must also be increased.

The same dynamic is at work in other sustainability-related problems such as water and infrastructure. All stakeholders, including policy-makers and business leaders, must work together on an integrated policy response. The courses of action developed must be holistic and should not create unintended consequences.

Restructuring today’s international institutions into organizations for sustainability is a difficult task. A dialogue based on scenario planning that takes into account geopolitical and technological interests as well as the voices of smaller players is a meaningful starting point.

But reinvented multilateral agencies alone cannot address all the challenges. A global organization may be needed to act as an honest broker among the various interests. Regional organizations and NGOs also have a significant role to play. Initiatives on a regional basis may be the optimum road to take towards sustainable growth and development.

Happy Reading..!!

Economic Update: India's Outlook..!!

The World Bank has stated that India's growth rate in 2010 could surpass China's for the first time in history.

What critical reforms remain to keep growth on track?

Key Points
• India managed to achieve an average of 9% growth over five years before the economic crisis. There is no reason to believe that its economy is not capable of returning to that level of growth.
• To sustain growth at 9% and above, the country must address its skills shortage, especially at the mid-level, if it is to maintain its competitiveness and attract more investment.
• India must focus on how to reform the legal system to make it more efficient through better implementation and enforcement of laws and a swifter judicial process.
• Effective models of public-private partnerships are needed to address critical bottlenecks to higher growth and efficiency such as infrastructure and the delivery of education and skills training, especially in rural areas.

Synopsis
For five years before the global financial crisis, India had averaged 9% growth. In the 2008-2009 fiscal year, the Indian economy grew by 6.7% and is set to achieve 7% growth next year, assuming a good monsoon season. In the medium term, India is likely to once again reach 8-9% growth.

There are, however, inherent constraints on the supply side that India must address to sustain 9%, plus growth over the medium and long term. Infrastructure is one such inhibiting factor. Another is the lack of skilled workers, especially at the mid-level. To address this deficit will require investment in education to widen access especially in rural areas and improve the quality of schools. A lot needs to be done in higher education. The government is taking a broad-based approach to this problem and is working together with industry to ensure that skills development aligns with the needs of business.

If India is able to adequately address its skills shortage, it is likely to attract more foreign direct investment that will drive new growth. Another area in need of reform is the legal system. The perception is that, while India has good laws on its books and globally comparable legal frameworks, it lacks efficient implementation and adequate law enforcement. The judicial process must be streamlined. It is important to increase transparency standards and to improve the quality of public- and private-sector governance.

To adequately address the constraints to growth from deficiencies in infrastructure, education, health care and the legal system, the Indian government will need to work together with the private sector. The right models of public-private partnership have to be adopted to ensure that they work effectively and achieve results.

Education is a particular concern since many young people in rural areas do not have access to schools. Private-sector education is a controversial issue in India, but often these are the only options available. Yet there is no reason that the government should not be able to provide quality public education. Intense discussions are now under way in India to determine what public-private partnership arrangements would be appropriate in the education sector.

Promoting inclusive growth must be the basis of government action. India’s democratic system means that there are often strenuous debates over policies; this should be viewed not as a deficiency but as an advantage. The airing of disagreements ensures that consensus, once reached, is sustainable and policies may then be implemented with the support of all sectors of society.

The dedication to inclusive growth also entails focusing on how to improve the lives of those at the bottom of the pyramid, by providing them with services that would enable them to be more productive and entrepreneurial. While the financial services sector is regarded as a major success story in India, less than 20% of Indians have access to any kind of credit. A large number of citizens do not have bank accounts. It is critical to find ways to bring banking and financial services to these people. To achieve this, new models of banking that employ mobile technology have to be explored.

On the trade front, India is pursuing both a multilateral and regional strategy, working for fair ways to conclude the Doha Round and negotiating regional and bilateral free trade agreements. It is in the midst of implementing a recently signed free trade agreement with ASEAN. Regional trade and cooperation within South Asia, however, remains weak.

Happy Reading..!!

India's Next Aspiration..!!

India has a potential workforce of 200 million college graduates and 500 million skilled workers, and the ability to generate over 10% of world trade in the next 15 years, provided leaders prioritize this goal.

How can these expectations be fulfilled?

Key Points
• Strong leadership with a clearly articulated vision must augment technological vitality and economic strength – a vision that complements India’s rise as a global economic force.
• Corruption must be dealt with aggressively.
• Business leadership should focus on affordable, high-tech solutions that can be scaled up across India.

Synopsis
Panellists discussed the relationship between government and market forces, and envisioned new models for success and the problems that both business and political leaders face. Economic strength and technological vitality are necessary, but strong leadership is clearly crucial for future growth.

A young, skilled workforce will be an extraordinary resource for an ageing population in Europe and elsewhere, India is in a tremendous position to continue growing economically. But, there is a crucial need to improve access to basic services such as literacy programmes, healthcare and clean water. There was agreement that abject poverty must be reduced, that income inequality will become a dramatically more complex and divisive issue in the future, and that sustainable development is not optional. High-tech solutions are essential but, in a country of India’s size, will only be successful if they can be scaled up.

India has chosen a unique model for development: rather than focusing on a subsidized manufacturing sector, India’s economy has surged atop the services sector, and done so organically with the government relatively in the background. However, concern remains that this has not received due recognition by India’s political leadership. Indeed, politicians have not articulated a clear vision in general to the country.

In terms of higher education, what India lacks is not talent in engineers, but enough skills development in sectors such as advertising, finance, innovation and design.

Concern for providing the poor with world-class services should be a priority for business leaders. One example of innovation in India that recognizes the needs of the people is the Tata Nano, the world’s most affordable car. Another is an eye hospital that performs the same number of cataract surgeries as performed in the United Kingdom, but at approximately 1% the cost. These challenges provide tremendous opportunities for all kinds of products that are needed not only in India but also in Africa, the Middle East and emerging economies.

As India becomes more comfortable and confident in its position on the global stage as an economic leader, its role as global leader must emerge with a proactive voice. Indian leadership must think about their intellectual as well as economic influence. To reach this point, Indian leaders must debate among themselves, but too often they are mired in regional and local politics.

Pervasive corruption is hampering leadership, and must be dealt with head on. India will not develop past a certain point if corruption is not severely curtailed. Not only does corruption raise the ire of the middle class, but it also stands in the way of further economic growth. E-commerce solutions can be a part of the fight against corruption.

Leaders in the private sector have a key role to play, although ostentatious lifestyles and a growing income disparity can often mean they face growing challenges of maintaining the trust and respect of the country’s majority. Although this problem has improved over the years, political leaders must recognize the value of private sector solutions and look beyond the public sector perspective.

Happy Reading..!!

Bucking the Trend: Growth Opportunities in India..!!

While the global recession has forced many Asian economies to rethink their export dependency, India surpassed China this year in auto exports.

As renewed investor confidence contributes to an expansion in private consumption and investment, how are companies adjusting their growth strategies in India?

Key Points
• To attract more investment, India has to deal with perceptions – whether real or not – that it is a difficult place in which to do business, even for Indians themselves
• Infrastructure deficiencies are widely regarded as an obstacle that has to be removed
• India must develop its capacity to absorb investment funds and efficiently deploy the capital and successfully execute projects, especially major infrastructure projects such as airports

Synopsis
India’s resilience in weathering the global economic crisis and maintaining robust growth fuelled significant interest among institutional investors in the country’s markets in recent months, especially after the national elections in May. FDI, however, has not risen in tandem. Yet, growth opportunities in India appear to be multiplying rapidly. Robust exports of autos and auto components are one positive indicator.

The injection of stimulus funds has, in part, been responsible for India’s strong performance during the crisis. But eventually India will have to wean itself off of the stimulus “drug”. To be sure, the flow of institutional funds into the financial markets has already slowed. Investors have become more discriminating. The challenge for India will be to attract the investments required to drive the growth it needs over the long term.

Whatever the realities on the ground, India will have to overcome perceptions, especially among investors outside the country, that it remains a difficult place in which to do business, even for Indians themselves. Beyond that, India must break significant bottlenecks that are preventing it from achieving higher growth.

Infrastructure deficiencies are widely regarded as an obstacle that has to be removed. India’s global ambitions for its auto and auto parts industry will not be realized if it does not build the roads and ports it needs. Raising the funds for these projects may be challenging, but even more difficult is the actual deployment of the capital. Relatively efficient execution is possible in India. Hyderabad’s new airport is a good example. Other airports have taken much longer to complete.

Hardware and software deficiencies have undermined India’s capacity to absorb investments and facilitate the execution of projects, hampering the country’s economic performance. The economy could do much better than it is doing, and more jobs could be created if India were able to successfully reduce these inefficiencies. Every reform measure will help increase India’s competitiveness and make it more attractive to overseas investors.

In addition, India could boost its growth by investing in innovation and R&D, focusing on the sectors where it has developed a competitive advantage. In IT, for example, India already has built up innovation clusters across the country that could help attract more investments.

Happy Reading..!!

The Future of Indian Media and Entertainment..!!

The globalization of Indian cinema is only the beginning of a booming media and entertainment market, which has witnessed tremendous growth in the television, Internet, advertising, music and animation industries.

With growth forecast at 17-18% for next year alone, what must be done to increase access to investment and lower regulatory barriers?

Key Points
• The Indian government is pushing for reform in the media and entertainment sectors
• India’s media industry has an opportunity to leapfrog and avoid the mistakes of mature markets, such as in the US
• The advertising sector can grow as the economy expands
• Parts of the media are likely to see consolidation; only the best content will survive

Synopsis
The current government in India has been proactive in its FDI policy with regard to the media. The Press and Registration of Books Act of 1867 will be amended by the end of 2009 to allow, among other things, foreign newspapers to enter the market or have their Indian editions printed locally.

The government is working to improve the advertising rate structure. Some areas previously considered taboo, such as broadcasting news on private channels, are likely to be allowed. The third auctioning phase of radio stations will begin soon, with FDI in the sector increasing from 20% to 26%. The government is also encouraging foreign filmmakers to make films in India, offering incentives to the nascent but fast-growing animation and gaming industry.

The opportunity that the growing Indian market offers is huge, but it will not last forever. Indian media should take a cue from foreign conglomerates. They should aggregate the various types of media and prepare a digital platform for the future where content can be profitably monetized.

India is one of the most under-advertised and under-branded markets in the world; it spends about 0.5% of its GDP on advertising. The reason: the economy is dominated by the services sector, which is a very reluctant advertiser. However, manufacturing is increasing its market share and, as its branding needs increase, demand for advertising will rise. There are some 470 television channels in the country, yet about 70 of them monopolize the advertising revenue. Yet, content by and large is qualitatively mediocre, as the share in revenue of the content producer/creator is small. It is difficult to make advertisers pay “good money for poor content”, which further hinders growth of advertising.

Of the many channels on air, merely 10% break even; few make a profit. Due to the way the broadcast industry has grown in India, subscription is not part of broadcast economics, whose business model remains advertising-based. Increasingly, there is realization that for all media – especially news media – quality must match quantity. This will entail investment in training professionals to create quality content.

Some panellists opined that the Indian media industry is in for a period of consolidation based on quality content – where quality is driven by competition, and content by quality. The entry of foreign media could encourage consolidation through joint ventures and collaborations, which could raise the bar for the entire industry.

Happy Reading..!!

Post-Crisis Economic Order: How Can Free Market and Control Be Balanced?

National responses to the global economic crisis have included traditional and innovative means of protectionism, challenging the paradigm of globalization and the force of free market.

What must be done to restore balance between regulatory and oversight mechanisms and India’s ongoing reform agenda?

Key Points
• Protectionism is not the answer – there should be collective cooperation among all nations
• The government responded to the financial crisis by stimulating domestic demand – this will have to continue until developed country economies recover
• The government’s three priorities now are investment in agriculture, investment in infrastructure and getting fiscal and monetary policy right
• The free market must be balanced with transparent, innovative regulation – self-regulation has also contributed to India’s resilience during the crisis
• Corruption and red tape are perennial problems holding India back from double-digit growth
• The two key drivers of Indian growth are domestic consumption and investment. The finance minister would be happy with GDP growth of 7%-plus next year and 8%-plus the year after

Synopsis
The spectre of protectionism that seemed likely a year ago has not materialized and global trade flows are now, if anything, more liberal than before. India’s finance minister clearly stated that protectionism is not the answer and called for collective cooperation among all nations.

The minister recounted how his government, faced with shrinking export markets and soaring oil prices, responded to 2008’s financial crisis with two stimulus packages that generated greater domestic demand – enabling India to post modest GDP growth of 6.7% in financial year 2008-2009. This focus on domestic demand will have to continue until the developed world economies, particularly the United States, Europe and Japan, make a more robust recovery. Going forward, the government’s three key priorities are investment in agriculture, investment in infrastructure and getting fiscal and monetary policy right.

In terms of regulation, there was consensus between industry leaders and the government that, while too rule-bound a market would stifle growth, a balance has to be struck in which the free market is governed with sufficient regulation to safeguard the weaker sectors of society. The minister championed regulation that is transparent, innovative and constantly adjusting to the conditions of the market. Self-regulation also emerged as a key factor in limiting India’s exposure to the financial downturn – from banks maintaining strong liquidity ratios and lending only against income to borrowers keeping a close eye on their repayment capacities.

The minister agreed with a comment from the floor that corruption and delays due to red tape remain perennial issues – and may be holding India back from double-digit growth. India’s recent subscription to the OECD’s rules on sharing information about tax evasion is a positive move.

Looking ahead, the key drivers for the Indian economy will be domestic demand and investment. The minister said he would be happy with GDP growth of 7%-plus next year and 8%-plus the year after – with the possibility of 9% or 10% thereafter.

Happy Reading..!!

Trade and Climate Change: Economic Imperative or Green Imperialism?

Trade and climate policies have become increasingly entwined as countries grapple with the challenge of integrating economic interests with the management of climate change.

What are the economic effects of trade and climate change policies, and how can different viewpoints between developed and developing countries be reconciled?

Key Points
• The big growth story of the next two to three decades will be low-carbon technologies
• The climate change debate cannot allow for the introduction of protectionist trade barriers
• A respect for green-friendly technological innovations in developing countries may shift the terms of debate on intellectual property

Synopsis
The process of carbon mitigation can either improve the lives of everyone or bring global economic trade to a grinding halt. Business leaders recognize both the urgency of the problem and the opportunities. For example, both pension fund managers in New York overseeing trillions of dollars and China's next Five-Year Plan place low-carbon and energy-efficient technologies at the top of their list of priorities.

The alternative energy sector – comprised of hydropower, solar, wind, biomass and ocean energy, among others – is a US$ 125 billion industry. By 2050, that figure might rise to US$ 1 trillion. Investors will seize upon opportunities in this sector if policy is properly set, there is the right balance of incentive structures and protectionist trade barriers are mitigated. A clear, strong agreement at the UNFCCC meeting in Copenhagen is fundamental to unleashing private sector forces, although expectations for a legally binding treaty have recently been downgraded, with some now saying that an agreement may take another few years. Discussions in the lead-up to the climate change conference reveal that developed economies fear losing their standard of living, while developing countries are afraid their growth process will be stymied.

However, India recognizes that achieving growth rates of 8-9% will be impossible unless they shift to renewable energy. India's national action plan calls for the installation of 20,000 megawatts of solar power in the next 10-12 years at a cost of billions of dollars. This plan has not been imposed by the outside, but decided on by the government because “it is good for India”. Improving the lives of hundreds of millions of people, climate change and development are interlinked.

Panellists from the private sector voiced concern that climate change negotiations can dominate trade. The reality is that costs associated with adopting green technologies are far less (1-2%) than the tariffs that trade lobbies are requesting (around 20%). A narrow view of costs, self interest and an artificial competition between growth and responsibility can slow progress.

Failure to put a price on greenhouse gases results in subsidizing pollution. At the same time, if customers demand products that are green, then businesses will rise to meet that demand.

Instead of blaming each other, countries must collaborate, especially in developing energy-saving technology, renewable energy and alternative fuels.

Happy Reading..!!

How Can India Become a Global Manufacturing Hub?

While manufacturing in India has remained healthy due to strong domestic demand, its contribution to GDP is only 16%, compared to 34% in China, and largely oriented to the domestic market.

How can India increase its manufacturing competitiveness while employing millions of new entrants into the workforce?

Key Points
• India’s manufacturing sector will be driven by a US$ 500 billion investment in infrastructure across sectors in the near term
• Innovation in manufacturing is crucial; India’s competitive edge is not only in labour arbitrage but in technologically intensive manufacturing
• Both a shortage of roads and power and a skills shortage pose challenges to the manufacturing sector

Synopsis
The manufacturing sector in India faces acute challenges. From problems with power, ports, railroads and roads to a shortage of human capital, manufacturing in India has long lagged behind targeted goals. But the Indian government's commitment to raise its investment in infrastructure from 7% to 9% represents a US$ 500 billion opportunity for growth within India's manufacturing sector.

A number of foreign manufacturers have met India’s infrastructure bottlenecks head on, with considerable success: LG has looked at India as an export hub; Hyundai has set up its small car manufacturing base in India; Nokia's handset manufacturing in the southern state of Tamil Nadu costs 12% less than its counterpart in China.

India offers potential investors in the manufacturing sector a number of competitive advantages. India's own domestic market is large, with over 600 million rural consumers. Workers’ wages in India are less than half of those in China. India has a large talent pool from which to draw, including a strong engineering ecosystem.

From a strategic point of view, growth in the coming decades will come from the developing world. India is in an excellent position to serve emerging economies in Latin America, Africa and elsewhere in Asia. Currently, that represents 11% of India's export market, but it is set to grow dramatically.

India's competitive advantage is in technology-intensive manufacturing. Indian manufacturers must lead by innovation, following the example of the Tata Nano, the world's most affordable car, which was designed from the bottom up.

One challenge facing Indian manufacturing at a time of tremendous growth is high turnover. When the economy grows at a rate beyond 7-8%, companies face a skills shortage and turnover increases from a manageable 2-3% to as much as 20-30%. This creates an unstable environment for manufacturing. The challenge can be mitigated by dramatically increasing the capacity of human resources.

Another challenge is public sector control and the requirement that companies bidding on very large infrastructure projects must have previous experience in the field, which many India companies lack. This results in Indian companies losing out in the competitive bidding process to foreign firms.

At the same time, state governments have been proactive in making manufacturing zones attractive to automobile and other manufacturers. The Indian government has identified areas where its intervention is required, such as social services, and infrastructure, where private industry is more capable.

Innovation in the modes and models of manufacturing can be a solution to the surplus of India's labour pool, which is largely unskilled but highly entrepreneurial. At the same time, core manufacturing capabilities are important for creating a first-world economy.

Happy Reading..!!