Article: Growth will be driven by investment, consumption


Growth will be driven by investment, consumption

In conversation with Chanda Kochhar, MD & CEO, ICICI Bank

Growth in the next decade will be driven by investment & consumption


In your opinion, what will be the main drivers of growth in the next orbit?
Following the global financial crisis, it is now expected that emerging markets like India and China will be the key drivers of global economic growth. Internally, the strength of India’s economic growth is likely to present many business opportunities and I believe that infrastructure development will present the next big opportunity for our businesses. While this will be largely driven by the government, private sector too will play a significant role here. It is estimated that infrastructure investment over the next few years would be about USD 400 billion of which private sector contribution (including PPP investments) is estimated at USD 225 billion. This level of infrastructure investment will have a positive impact on overall businesses with its linkage to other sectors of the economy. The other big driver of growth would be our favorable demographics. We are at the next inflexion point in terms of rising purchasing power and demand for goods and services. In the last decade we have seen the per capita income move from USD 500 to USD 1,000 and the impetus this has given to consumer demand. Another USD 500 is expected to be added to per capita GDP taking it to USD 1,500 by 2015. It is estimated that the next decade should see around 200-250 million people coming into the consuming class in India. The ramifications of this for our businesses are immense. While growth in the 1990s was driven by investment and that in the 2000s by consumption, growth in the next decade will be driven by both these factors, leading to considerable opportunities for businesses.

In this new business scenario, how will the role of the leader emerge?
Certain attributes of a leader will assume critical importance, first being the ability to shape and build an institution and its culture. The average age of employees is likely to come down and this will entail a huge influx of young talent both from semi-urban and rural areas joining the workforce. The ease of integration of this diverse and young workforce into the organization will reflect the robustness of the character and culture of the organization. Further, leaders will have to shoulder the responsibility of shaping a culture where employees imbibe a sense of personal accountability and empowerment to build the organization. The other important trait will be direction setting coupled with strong execution and flawless delivery. With a multitude of changes happening across the globe, no business is insulated from their impact. Along with this, competition will increase and as such identifying the right levers for growth will become more challenging.

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Topics: C-Suite, Strategic HR, #ExpertViews

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