Panel discussions

Betting on the Future: How India can make this decade its own

Read Time:12 Minute

Panel Discussion: The panel included Shivansu Gupta, Sr Partner, McKinsey & Co., K Anantha Krishnan, CTO, TCS, and Dr Kamakoti, Director, IIT Madras.

Mr Shivansu Gupta, Sr Partner, McKinsey & Co

Globally, if we look at what is happening in the last couple of years and what it means for India, we can see three major trends that will affect the way companies operate:

  • A fundamental shift in supply chains, which will lead to a very different future of global trade.
  • Value migration towards digital native businesses.
  • The shift in consumer preferences which have evolved quite significantly.

Our research shows that anywhere between three and five trillion dollars of trade flows every year will shift locations or shift countries in the next half decade. For instance, in the automotive sector, of the 1.7 trillion dollars of trade flows that happen globally, we expect anywhere between 260 to 350 billion dollars of trade flows to shift. This continues to grow because of the Covid shock and a lot of countries and companies want to make their supply chains resilient. Not only do they want to make them efficient and get the lowest possible cost, but they also want to be resilient, like China plus one and diversify the supply chain. The supply chains that can take some level of fluctuation are now having to fulfill anywhere between 15 to 17 percent of demand growth; they are not used to this.

Also, the value chains themselves are shifting. In the automotive sector, for instance, due to the shortage of semiconductors, a lot of the OEMs are thinking about how to bypass the Tier 1 semiconductor suppliers. This is a massive shift and it continues to grow. This will have a lot of implications for all of us.

Value migration
Value migration towards digital natives is happening. Over all, market capitalization has grown from 2019 to 2021. We saw that more than 40% of capitalization growth was captured by only 25 digital native companies—the Apples, Amazons and Microsofts of the world. A lot of them are electric vehicle suppliers or producers like Tesla and other e-commerce companies.

The pandemic has triggered and accelerated it significantly but it has been building up over the last 5 or 10 years. ~ K Anantha Krishnan, CTO, TCS

As people work from home, they prefer ordering things from home. This will be a big driver of growth. Also, this is something that we need to be careful about. In the Indian context, two aspects need to be considered:

  • In the next seven to eight years, there will be about 90 million job seekers in India. For that to happen, we need to drive a GDP growth of 8 to 8.5%. That is not going to be easy. Because, this means that both net employment and productivity growth will have to be the best. We have to continue to grow the economy at a very high rate to be able to absorb them.
  • A lot of value creation happens with large firms that do anything more than 500 MN USD of turnover. 40% of India’s exports are driven by these firms. Almost half of the revenue contribution to nominal GDP happens from these firms and the productivity they drive is more than 10X of other smaller firms. If we compare ourselves to even our Southeast Asian peers, we are much smaller in terms of the number of such firms of this size that we have in India as opposed to any other country. So to drive growth, we have to migrate from smaller size companies and grow bigger and bigger, which will also help drive value creation.

Six imperatives
There are six imperatives for most companies in India. These are:I

  • Investing in innovation.
  • Focussing on growth, which will be driven in large part by Tier 2 and Tier 3 cities.
  • Building cost leadership as a key differentiator.
  • Improving engagement with consumers and connectedness.
  • Driving partnerships and building asset light systems as opposed to investing in capex based assets.
  • Investing in sustainability and focussing on ESG.

K Anantha Krishnan, CTO, TCS

What you have illustrated is not just an India opportunity or India specific analysis, but I hear very similar messages from many parts of the world. Secondly, the expectations of the consumers are also surprisingly uniform across the world. People have got used to digital intermediated consumption. The pandemic has triggered and accelerated it significantly but it has been building up over the last 5 or 10 years. This is a trend which will drive change in multiple industries and in multiple contexts, because the consumer finally drives your products or services, designs supply chain and everything else. Though unglamorous, the production and supply chains are very necessary at the back end. Sustainability is also changing things dramatically.

Dr Kamakoti, Director, IIT Madras:

Covid has actually normalized things. We now compare India versus Europe as an apple versus apple. The needs and trends seem to be the same everywhere. We have our own strengths and weaknesses. The game is all about exploiting the weaknesses of others and leveraging our strengths to grow. That’s what we see in the semiconductors chip shortage. For example, the price of network switches has increased from 15,000 to 36,000 rupees today. Overall, I think, we are in a very good situation. We should fight this battle. Being a Director of a premium technology institution in the country, I am very excited to make this better.


Ananth, you have a unique vantage point of being at the center of technology and innovation in one of the largest firms not only in India, but in the world. What do you think about the role that technology will pay play across industries in the next decade?


If you look at the global trend, there are four horizons or buckets of activity across industries. They are:

  • Leveraging digital technologies in any shape or form as fast as possible. I’ve heard banks, airlines and hospitals saying that we are a technology company with a banking license or airline license and so on. So aspiration is for free but execution is hard. In the last 20 to 30 years, all technologists have become very good marketers. You said that the world’s top companies are all digital natives. It is fuelled by consumer demand and it will be a secular trend for the next 20 to 30 years. Some of us are involved in the India 2047 initiative.
  • The second bucket is what I call the AI-driven mania. AI technically has blossomed in the last 15 years. When I graduated from IIT Delhi in the mid-80s, AI was not a field anybody would go to. But suddenly after about 2006 or 2007, it shot up, predominantly because of processor improvement, data capacity to handle large amounts of data and so on. Now it has become mainstream in industries, in the supply chain, in production and even agriculture. Let’s call this the Intelligent Enterprise. This is going to continue.
  • The third is ‘Ecosystem Connecting Technologies.’ In the last 100 years of industries, supply chains essentially meant there is a well-defined outcome. There is usually a set of players close to the outcome and then there will a set of two, three or four tiers of suppliers—from the raw material all the way to the end product. Everybody expects value along the way. This way of thinking got established, perhaps in early industrial revolution. Now there is a slightly different twist because of the consumer’s changing behaviour. With paths to the consumer being heavily digitally intermediated, the supply chain is becoming more and more dynamic. The data generated from the transactions has become fuel for additional industries or additional players to buy and sell that data and make something out of it. This results in very dynamic value chains. We haven’t yet found a good word for it. Web 3.0 and Blockchain Technologies are coming up. Even 5G is jumping onto the bandwagon.
  • Data, of course, is a well-established platform. So let us watch this space. The experience of it will be real. It could be virtual, like education online. Entertainment is served up virtually on OTT and Metaverse. What else will be served virtually will be interesting to see. The bad guy industries like gambling and illicit trade will be the first ones to adopt the new trend. So we have to watch that ecosystem technology space quite closely.
  • Finally, we have the science-led future. It is about grand challenges. Sustainability by itself is a huge one and there are many hard to abide by problems in sustainability. People talk that IT Industry is 2 percent of the world’s emissions. But we have 30% problems. Here, I think computing, processor improvements, science and engineering in healthcare, etc will play a big role. All these, we will see in better context in India.

The same experience story we have seen will unfold in two or three much unheralded ways. One is health. Take, for instance, CoWin app. The vaccination surge has, of course, now reached a plateau. If you go for vaccination today, you can get a certificate within five minutes, which is outstanding. This kind of expectation is there now in every industry. Every service product will become digitally intermediate in India. Every industry must worry about this.

Lastly, let us look at the supply chain shifts, in automotive, pharmaceuticals and chemicals. Covid test kit manufacturing in India was zero at the beginning of the pandemic. Today, we are not just self-sufficient, but we export it. This has happened not because large companies stepped in. It is a very large number of small and mid-sized companies, which have really dissected the value chain of what goes into a test kit. There is a very efficient data marketplace which are stronger and which connects the demand and supply. It’s a case study in itself. It’s a very low-key kind of an achievement but it is important in the context of supply chains and new value chains.

I feel that we have not tapped real intelligence. I believe that we need to set up some rural Technology Centres. ~ Prof. Kamakoti, IIT-M


Prof Kamakoti, you are at the centre of training all our future leaders of the country. What is the foundation that is required in these leaders, so they help capture this opportunity that we see in the next decade, whether it’s skill, infrastructure, talent or regulations?

Prof Kamakoti:

I’ll share my experience. Three months before, we needed a bunch of Java coders to develop some simple software for our process workflow. After six months of struggle, we got one person whom we offered Rs 80,000 as salary, which by IIT standards is a good pay. Two days later, he left saying he got a job for Rs 1 lakh. This is the reality.

The point is we need to make them employable. There’s no question about it. I always draw parallels between banking system. I was on the board of one of the oldest banks and I went through the records of how promotions were done. I noted that the person who could count thousand notes in half an hour was given promotion. Today, of course, we have counting machine. Not just because of technology, jobs have been cut down. Reskilling becomes extremely important.

We have AI in every Department- chemical, chemistry, engineering design, applied mechanics and computer science. Therefore, reskilling is very important and we have to make it more inclusive. ~ Prof. Kamakoti, IIT-M

From IIT, we are trying to bring a lot more of reskilling opportunities. Our online BSc in Programming and Data Science is a first of its kind, probably in Asia. We have 12,000 online students. We also have 12,000 offline students who joined earlier. So, in one year, we doubled the intake. Every year, 15 lakh students write the JEE for IIT admission but only 15,000 get selected. What happens to the remaining students who are not selected? Online education is the answer. We can definitely scale it up and if all IITs chip in, we can reach out to many students.

Though we teach online, there is live interaction and proctored examination. We conduct labs. We have started with AI and Data Science. Everyone today wants to attend the Deep Learning course. We have AI in every Department- chemical, chemistry, engineering design, applied mechanics and computer science. Therefore, reskilling is very important and we have to make it more inclusive.

During the lockdown, when we had shortages of Covid test kits, many industries from semi-urban areas pitched in. Some of them approached us for evaluation. I feel that we have not tapped real intelligence. I believe that we need to set up some rural Technology Centres. CAMS has helped to set up two centres where we keep some 3D printers and computers. We train people. We can reach out to kids for their online education from these centres. We see some good improvement in the rural colleges and we need to address this, if we really want to scale.


We talked about digital natives and value creation. What is the role that digital natives or startups will play?


A mindset shift has happened in India in the last 10 or 15 years. Earlier, it was not respectable for a person to say that he/she works for a startup after graduating from any institution. We would all try to join either an academic institution or go abroad or join a big company. Today, people join startups, not just at entry level, but at mid carrier level and even senior levels. So the talent pool is coming into the startup world. The quality and quantity has jumped up dramatically. It is a very positive shift.

Across sectors, there are low hanging fruits available to all startups. Startups involved in SaaS are doing B2B business and there are enough examples in Chennai. However, there is a lot of opportunities for core engineering or deep tech engineering companies and there are not many of them.

Not much of Indian venture capital has gone into this. A lot of work is done in this area in premier educational institutions but this is not getting exploited. This is where the role of big companies in supporting the startups becomes very important.