Arundhati Bhattacharya, Chairperson, State Bank of India
In the beginning of the 1990s, our bipolar world suddenly became unipolar. In the same decade, the internet and the emergence of cellular mobile phone technology such as GSM in Europe, CDMA in the US and their subsequent global adoption, increased the magnitude of people-to-people contact and enabled the expansion of companies across continents. The term ‘global village’ became popular and the global economy surged till it was briefly punctuated by the 2000 Asian crisis.
Then in 2007, the global financial crisis brought entire systems to the brink of a collapse. Today, we can envisage that no country will be a hegemonic power by 2030; the world is already moving to maximal entropy state. The global crisis highlighted the importance of a coordinated international response to such shocks. A panoramic view of the world suggests that it has, at the same time, become flatter and more uneven in the previous 25-odd years.
The two dimensional effects of demography and technology are reshaping the market for the CEO in India as well as abroad. The universal diffusion of technology such as workflow software, internet and mobile, have altered production and cost structures in complex ways. With increased internet penetration as well as the advent of 3G and 4G telecom services, the scope for online retail is exponentially greater.
For India and the Indian corporate, these global value chains offer immense potential in terms of both backward and forward participation. India’s backward participation is currently higher than its forward participation. If technology is changing the production process and making the world flatter, demographics are altering the very organic composition of future demand, making the world more uneven. Pockets such as Japan, Europe and China are rapidly aging while countries such as India, where the population is predominantly young, are poised to reap their demographic dividend.
Are CEOs in India ready?
I believe they are. PwC India’s CEO Survey report bears testimony to this sentiment.
But do they know which core capabilities they need for a marketplace without boundaries?Demography is a major vector in creating boundaries and a successful product effort must be accompanied by a cost-competitive solution to a set of fully understood customer problems. Talent management by CEOs in India needs to encompass diversity and inclusion issues. This is where we need considerable improvement. Manpower that possesses multidisciplinary skill sets and can seamlessly perform in diverse cultural settings in today’s world without boundaries has to be the top priority.
Today, when I look at the return on equity from the developed countries, I’d much rather choose to be in Bangladesh and Nepal. Groupings are changing and so are geopolitical realities. We are on a much better footing with our neighbours than we were three years ago and they are, in turn, much more comfortable with us. While the world is becoming more uncertain and volatile, it is also better connected than ever before.
The world will become more and more globalised hereon, as it becomes increasingly connected, yet with barriers in different places. It’s time to gear up for the challenges thrown in our wake.
This is an excerpt from her keynote address at the PwC CEO Summit 2015, Mumbai.