Mega Trends In IndiaMega Trends In India

Macro to Micro Implications of Top Mega Trends in India To 2020Macro to Micro Implications of Top Mega Trends in India To 2020

Sarwant Singh, Partner

Archana Amarnath, Program Manager

Visionary Innovation Research GroupVisionary Innovation Research Group

2 February 2012

Today’s Presenters

Sarwant Singh

Partner

Frost & Sullivan

2

Archana AmarnathProgram ManagerFrost & Sullivan

Agenda

Introduction and Definition of Mega Trends

3

Presentation of Top Mega Trends of the Future

Macro to Micro: How To Apply Mega Trends within Your Organization to Develop Growth Strategies

Three Main Trends in Urbanization: Development of Mega Cities, Mega Regions and Mega Corridors

4

MEGA CITY

City With A Minimum Population of 8 Million

and GDP of $250 Billion in 2025 (13

Mega Cities in 2011 and 25 Mega Cities in

2025)

EXAMPLE: Greater Mumbai

MEGA REGIONS

Cities Combining with Suburbs to Form Regions. (Population over 15 Million)

EXAMPLE: National Capital Region of Delhi (includes New Delhi, Noida, Greater

Noida, Ghaziabad, Gurgaon, Faridabad)

MEGA CORRIDORS

Corridors Connecting Two Major Cities or Mega

Regions, 60 km or more apart, and with a combined population of 25 million or

more

EXAMPLE: Delhi-Mumbai Corridor with a population of

203.57 Million in 2025

Around 38% of the Total Population (534.8 million) in India to Live in Urban Regions in 2025: Cities to Account for 70% of India’s GDP in 2030

Haryana 46.31%

Urbanization Rate of Highly Urban States and Mega Cities in India in 2025

Delhi 98.8%28.5 million

Madhya Pradesh

Punjab 52.50%

West Bengal 35.13%

Mega Cities in 2025

Emerging Mega Cities (over 4 million population in 2025)

Ahmadabad 7.56 million

Kanpur 4.6 million

Jaipur4.29 million

Key:

UrbanizationRate

Contribution toCountry’s Urban

Population in 2025

Highly Urban States

>30% 69%

Medium Urban States

25-30% 24%

Low Urban States

<25% 7%

Andhra Pradesh 34.02%

Gujarat 53.04%

Karnataka 49.29%

Madhya Pradesh 34.80%

Maharashtra 61.01%

Tamil Nadu 74.78%

35.13%

Note: Mega City is defined as a city with population of over 8 million and GDP of $250 Billion and above

Source: Department of Economic Affairs, Ministry of Finance, India and Frost & Sullivan, 2011

Mumbai 25.8 million

Kolkata 20.1 million

Pune6.79 million

Surat5.70 million

Chennai 9.9 million

Bangalore9.57 million

Hyderabad9.09 million

Mega Connection: India to see 8 Mega Corridors by 2021

Guwahati-Jorhat (NA)

Delhi Mumbai Industrial Corridor (204)

Amritsar-Jalandhar (NA)

Udaipur-Kota (NA)

Delhi-Chandigarh (NA)

Delhi-Jaipur (NA)

Delhi-Agra (NA)

Delhi-Dehradun (NA)

Delhi-Bareily (NA)

Mehsana-Valsa (48)

Ahmedabad- Junagarh

Jamnagar-Bhuj (4)

Lucknow-Kanpur (NA)

Kolkata to Cuttack (NA)

Ahmedabad- Junagarh(6)

Bhavnagar-Porbandar (4)

Mumbai-Ahmedabad (58)

Mumbai-Nagpur (26)

Pune-Jalgaon (7.6)

Bangalore-Belgaum (38.5)

Mysore-Kolar (8.6)

Mangalore-Karwar

Hyderabad-Hindupur (29.1)

Hyderabad- Vijaywada (10.3)

Hyderabad-Adilabad (2.8)

Srikakulum-Nellore (25.3)

Chennai-Hosur (30.4)

Coimbatore-Krishnagiri (13.4)

Chennai- Karaikud (4.9)

Tuticorin- Nagercoil (2.8)

Population greater than 25 million

Population less than 25 millionSource: Population Foundation of India.

Planning Commission of India

Note: Corridors Connecting Two Major Cities or Mega Regions, 60 km or more apart, and with a

combined population of 25 million or more

The figures in brackets represent population in Million units

Cities, and Not Countries, Will Drive Wealth Creation in the Future

What are the Micro Implications ?

• High Economic Power With 85% of Scientific and Technology Innovation from These Cities

Fast Forward City Facts: Did You Know?.....

• Cities like Seoul account for 50% of the country’s GDP; Budapest (Hungary) and Brussels (Belgium) each for roughly 45%.

• Today’s cities use 75% of the world’s energy and are responsible for 80% of energy-related carbon impact.

Innovation from These Cities

• Hub and Spoke Business Model will evolve with Logistics, Healthcare, Retail and many other industries

• New Mobility Solutions like Bike and car sharing, Integrated Door-to-Door Solutions

• Transit oriented development and zoning

• 11 cities in India to have more than 4 million population

• Huge opportunity for Indian companies to create partnerships with Western/Japanese companies to develop city management capabilities

-914

-6,673

-211

9,498

-7,481

4,026

1,788

5,737

796

6,968

Italy

Japan

Korea, Republic of

Mexico

Russian Federation

Saudi Arabia

South Africa

Turkey

United Kingdom

United States

India to have the Highest Increase in Working Age Population (15-64 years) Globally (2010-2020) at 119 million, and will be a Source of Competitive Advantage

2,143

1,016

13,096

513

11,945

-167

-2,568

119,143

18,619

-914

-10000 10000 30000 50000 70000 90000 110000 130000

Argentina

Australia

Brazil

Canada

China

France

Germany

India

Indonesia

Italy

Source: United Nations,2011

Population (thousand)

Note: The figures here represent only the net increase in working age population. In absolute terms, China will still account for a greater level of population in the 15-64 years age group (988 million) compared to India (923 million) in 2020

The Middle Bulge: Middle Class Individuals to Account for 62% of India’s Population (864 Million Individuals) in 2020

2020

1,399 Million Individuals

2010

1,219 Million Individuals

Rs.20,00,000 ($44,000)

Rs.50,00,000 ($110,000)

Rs.100,00,000 ($220,000)

> Rs.1,00,00,000 ($220,000)

0.1%(1)

0.1%(1)

Affluent

Rich

Super Rich

Income Per Annum

0.4%(5)

3%(45)

1%(10)

0.4%(5)

Source: National Council for Applied Economic Research (NCAER), and Frost & Sullivan

Note: Figures in the brackets are million individualsPoverty Line based on planning commission definition of poverty – Rs 4,365 per month per household

Rs. 3,40,000 ($7,500)

Rs. 1,50,000 ($3,200)

Rs. 10,00,000 ($22,000)

Rs. 52,000 ($1,000)

1%(12)

Below Poverty

Line

Poor

Lower Middle Class

Middle Class

Upper Middle Class

36%

(500)

28%(390)

6%

(85)

19%(269)

7%(95)

<Rs. 52,000 ($1,000)

Poverty Line

37%(456)

30%(359)

18%(228)

13%(157)

Generational Political Shift: India will be in the Cusp of Another Gen-Shift in Politics in 2015

1st Generation 2nd Generation 3rd Generation 4th Generation

LEADERS

?

1930-50s 1960- 1970s 1980-1990 2015+

THOUGHT PROCESS

• Secularism• Socialist Economic

Policies

• Left Wing Economic Policy

• Promotion of Agricultural Productivity

• Nationalization of Banks

• Economic Liberalization• Modernization of

Telecom and Space Industry

• Improved Relations with US, EU

• Birth of IT/Software Sector (Outsourcing)

• Platform for Economic Growth

• Youth Empowerment• Transparency in Politics• More Privatization• Upgrade of Infrastructure• Service-Oriented

Economy• Independent and Modern

Thought Process

MILESTONES• Indian

Independence (1947)

• Republic of India (1950)

• First Nuclear Test (1974)• Green Revolution • 20-Point Programme

• One of Fastest Growing Economies

• Birth of Special Economic Zones

• Potential Super power (GDP >7- 8%),

Next-Gen Politics in India: Younger and Urbanized Intellectual Leaders to be the Future Agents of Change

Tech Savvy: Using Internet as a tool to change society.

Eg. Facebook

Educated Abroad: • Eg. Rahul Gandhi (Harvard and

Cambridge), AmethiConstituency, INC

• Jyotiraditya Scindia (Harvard and Stanford), Lok Sabha

To Lead World’s Youngest Population in 2020: India to Have 61% of its population (0.85

billion) less than 35 years (Total Indian population is 1.39 billion in 2020)

Young Brigade of Indian Politicians

• Milind Deora (Boston University), Lok Sabha

• Sachin Pilot (Wharton Business school), Ajmer Constituency, INC

• Agatha K. Sangma (Nottingham University),MP

Global Outlook: Exposure to Western Education and understanding of Global

Competiveness in International Market

Revitalizing Policies and Electoral Make-Up with Modern Thoughts and Pragmatism: Opening up of Sectors such as Automotive,

ITeS

2010 2020Users Of Top Social Networking Sites, (India), 2010 and

2020

FACEBOOK

Non- Internet Users

Internet Users 81 Million

706.1 Million

227 Million

15 Million

1138 Million

693.4 Million

Non-Internet Users

Internet Users

1

TWITTER

55 Million

4.9 Million

Total: 1,219 MillionTotal: 1,219 Million Total: 1,399 MillionTotal: 1,399 Million

2

Six Degrees Apart: Social Networking Users to Reach 554.72 Million in India in 2020: Facebook to Become Number 1 with 227 Million Users

24.30Million

56.7 Million

Non Social Networking Users

554.72 MillionSocial

Networking Users

138.68Million

2010 2020Non Social

Networking Users

Social Networking

Users

LinkedIn

6 Million

49 Million

2010 2020

3

2010 2020

4.9 Million

4ORKUT

44 Million20 Million

2010 2020

Source: Socialbakers.com, comscore linkedin.com, facebook.com, twitter.in, orkut.com, teck.in, Frost & Sullivan

Connected India: India is Expected to have 1.5 billion Connected Devices in 2020

Total pay-TVsubscribers expected to

reach 166 million by 2015 and 190 million by

2020

A ten-fold increase in broadband subscribers

10.29 million (2010) 100 million (2014)

The mobile subscriber base

910 million(2014)

4G Rollout Could Start by 2012

100 million 3G broadband subscribers

by 2015

Internet users

81 million (2010)

237 million (2015)

910 million(2014)

Source: International Telecommunications Union and Frost & SullivanImages: Google Images

Around 1.4 Million Connected Cars in

2020

India’s GDP vs Population Levels: GDP to Reach $4.6 Trillion in 2020; India is Expected to Record a GDP Growth of 10.1% in 2020; Making it One of the Fastest Growing Economies Globally

$4.60 Trillion

$2.74 Trillion

$1.63 Trillion

6.0%6.0%

6.3 %6.3 %

8.5 %8.5 %

10.1 %10.1 %

1990 1995 2000 2005 2010 2015 2020

Population (Million) 857 922 1003 1080 1219 1318 1399

Real GDP (Growth (%)) 6.0 5.2 6.3 7.0 8.5 9.5 10.1

Per Capita Income ($) 377.51 395.90 474.92 748.76 1,338.7 2,077.5 3284.5

$0.32 Trillion

$0.48 Trillion$0.37 Trillion

$0.81 Trillion

Note: GDP at Market PricesSource: IMF, World Bank, economy watch, RBI, ICRIER, Planning Commission, Frost & Sullivan

6.0%6.0%

130.0

41.0

15.4

356.4

20.5

7.7

178.5

2012-2017Infrastructure Investments (India), 2007 - 2017

$1,024 Billion

2007-2012

$513 Billion

327.7356.4

200

300

400

500

600In

ve

stm

en

t in

$ B

illi

on

2012-2017

2007-2012

India Infrastructure Investment Trends (2007-2017)

164.1

153.6

164.1

77.0

65.2

20.5

Source: Planning Commission and Frost & Sullivan

Twelfth Five Year Plan (2012-17) $ 1024 Billion Rs 40,99,240 Crores (9.5 % of GDP)

Infrastructure Investments Under Five Year Plans

Tenth Five Year Plan (2002-2007) $ 212 Billion Rs 9,19,225 Crores (5.7 % of GDP)Eleventh Five Year Plan (2007-12) $ 513 Billion Rs 20,54,205 Crores (7.5 % of GDP)Twelfth Five Year Plan (2012-17) $ 1024 Billion Rs 40,99,240 Crores (9.5 % of GDP)

Electricity Roads and Bridges

Railways Ports AirportsOthers (Telecom, Irrigation, Water Supply and Sanitation, Oil and Gas)

164.1

77.0 65.220.5 7.7

178.5

153.6130.0

41.015.4

0

100

Electricity Roads and Bridges Railways Ports Airports Others

Inv

est

me

nt

in $

Bil

lio

n

327.7

Example of “Value for Many” Business Model

“Value for Many” Will Replace

“Value for Money”

Tata Nano: The People’s Car At Low Price (Rs 1 Lakh

or €1,600)

Aravind Eye Hospital: Conducts 286,000 Assembly-

Line type Cataract Operations per year

EChoupal Initiative by ITC: Leveraging Internet to

Empower 4 Million Farmers

Grameen Bank: Microfinance Bank for the 8.34 Million

Borrowers in Bangladesh (97% Women)

Ford Business Model

Macro to Micro Analysis

Mega Trend Matrix: Understanding Implications of Key Mega Trends on Indian Economy

Deg

ree o

f Im

pact

on

In

dia

n E

co

no

my

Hig

h

Urbanization

Generation Y

Increase in Working Age

Population

“She-conomy”

The Middle Bulge

“Beyond

Future Economic Growth

Connectivity

Future Infrastructure

Generational Political Shift

Low Probability of Success

Deg

ree o

f Im

pact

on

In

dia

n E

co

no

my

Lo

w

High

Wealth Watchers

“Beyond Bangalore”

Space Jam

Innovating to Zero

E-Mobility

Top Industries of the Future

“Value for Many” Business Model

Health, Wellness and Well Being

Future Energy Power Generation Game On! Sports

Industry

E-Governance

“Click-n-Connect”

Note: The size of the bubble represents the scale of opportunity within each Mega TrendThe Mega Trends have been plotted based on quantitative and qualitative reasoning

From Macro to Micro: How to Take Mega Trends from Information to Strategy Implementation

Sub Trend

Mega TrendSelected Trends that Impact Your Business

and Markets

Analysis of Opportunities

and Unmet Needs

Impact on Future Product/

Macro Micro

Eg. Urbanization Example: Mega City electric cars with small turning radius, autonomous parking in busy cities, Facebook Sub Trend

A Sub Layer of Trends that Has Wide Ranging Impact

Future Product/ Technology

Impact to Your Industry

Visualising The Roadmap of These Critical Forces Through Scenario Building and Macro

Economic Forecasts

Eg. India to have 4 Mega Regions by 2025 Each with

Population Over 15 Million

• New Mobility Solutions• Hub and Spoke Business model for

different industries e.g.. Logistics• Specialized Hospitals in City Centers

and Walk –in Clinics in city suburbs

New Mega City Cars, Car sharing, Connected carSmart city solutions such as networked infrastructure, integrated transport systems

busy cities, Facebook on wheels, seamless switching from home to car

Mega Trends Research Plan 2011-2012:Selective List of Studies That Will be Accessible*

Number Mega Trend Planned TopicsEstimated

Publishing Date

1 Urbanization Urbanization and Mega Cities and Impact on Industries and Business Q1, 2012

2New Business

ModelsNew Business Models of the Future Q1, 2012

3 Mega TrendsWorlds Top Mega Trends to 2020 and Impact on Society, Cultures, Business, and Personal Lives – 2012 Update

2012

4 Healthcare Health, Wellness and Well-Being and Impact on Products and Technologies 2012

5 Energy Innovating to Zero 2012

6 Infrastructure Emerging Transportation Corridors of the Future 2012

7 Industry Industries of the Future 2012

* Titles cannot be confirmed and are subject to change or delays.

7 Industry Industries of the Future 2012

8 Regional Mega Trends for Africa Q1, 2012

9Regional

Mega Trends for India Q1, 2012

10Regional

Mega Trends for Asia Pacific Q1, 2012

11Regional

Mega Trends for LATAM Q1, 2012

12Regional

Mega Trends for Turkey Q2, 2012

13 Technology Top 50 Technologies of the Future: Techvision 2012

14 Urbanization Tracking of Mobility Trends and Transportation Policies in 23 Global Mega Cities 2012

15 Urbanization Global Analysis of Smart and Sustainable Cities 2012

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Sarwant SinghPartner & Practice Director,Visionary Innovation Research Group and Automotive & Transportation + 44 207 915 7843sarwant.singh@frost.com

Archana AmarnathProgram ManagerVisionary Innovation Research Group + 44 207 915 7893aamarnath@frost.com

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