Davos, Switzerland, January 26, 2012—The rise of Asia – not just India and China but also other Asian economies – means that the continent is now far too important for companies to ignore any longer, according to Ashwani Kumar, minister of state for planning, science & technology and Earth Sciences in the Indian government.
In a special address to business leaders gathered at the annual summit of the World Economic Forum in Davos, Mr Kumar said: "Asia is the default option. No-one has a choice but to be in Asia." Elaborating on this, he said: "I have no doubt that in the decade that is unfolding before us, the story of economic growth will be scripted by China and India, together with the other Asian economies."
At the meeting, the sixth in an annual series hosted at Davos by the Confederation of Indian Industry and The Boston Consulting Group, Mr Kumar said that India was "racing to catch up with China" and had bold plans, outlined in its next Five Year Plan. These included: investments of $1 trillion in the country's physical infrastructure, $35 billion in primary education, and an unspecified amount in "skilling up" 500 million people by 2020. "If this is the range of our ambition," he said, "all I can say is that anyone ignores Asia at their peril." He added "Asia is the next wave and India, within Asia, is the current wave."
These sentiments were echoed by Adi Godrej, president designate of the Confederation of Indian Industry and chairman of the Godrej Group. "Right now, in India, we have a little bit of a slowdown. But I think the reality of the situation is far different from the sentiment." He pointed to India's demographic dividend – a high proportion of young people – as well as research suggesting that India would be the largest economy in the world by 2050.
But Mr Godrej – addressing the theme of the meeting, "Are You Ready For Asia?" – said that a positive approach was vital for success. "It needs imagination and a very strong belief in the future. It is a question of strong belief, strong sentiment and not getting bogged down with the cyclical changes."
Jaspal S Bindra, group executive director and chief executive of Standard Chartered Bank's Asia business, urged companies to enter India and other Asian markets without delay. "Act in haste," he said, "in terms of building relationships with Asia."
Dr. Hans-Paul Bürkner, chief executive officer and president of The Boston Consulting Group, who chaired the meeting, said: "The biggest risk is for Western companies to not get engaged and to always be worried about the setbacks. It is to not move forward with courage and with clear aspirations."
In a wide-ranging debate, Dr. Janmejaya K. Sinha, Chairman of the Asia-Pacific region for The Boston Consulting Group, said it was critical that companies asked themselves a series of key questions about how Asia was going to change by 2020. "In the next nine years, the world will have to shift from serving 600 million people to serving 2.6 billion people. Is your country ready? Does it know who these 2.6 billion people are? There are 3500 billion dollar companies in Asia today and Asia will add another 3500 in the next nine years. Do you know if they will compete with you?"
He added: "You need to start yesterday. You need to keep at it with tenacity. There will be highs and lows. But those 2.6 billion people are not going to disappear. They will continue consuming at an ever increasing rate."
David Michael, Global Leader of The Boston Consulting Group’s Global Advantage Practice, said urged companies to really get to know Asia, to prepare the next generation, who will grow up in a different world to their parents, and to help Asia solve some its biggest challenges. "Asia faces huge development problems, really staggering problems, and positive collaboration to solving those problems is vital."
The meeting was attended by business leaders, investors and academics including Timothy J Roemer, former U.S. Ambassador to India and Ambassador John Negroponte among others.
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