Post on 10-Dec-2015
India & Europe Win-Win Game
1
India & EuropeHow to create a Win-Win
game in IT ?
IIT Delhi - 24 November 2008
Dr. Jean-Joseph BOILLOTEconomist India-China
Cofounder Euro-India Economic & Business GroupEIEBGgroup@gmail.com
India & Europe Win-Win Game
2
Challenges ahead
Economic catch up: magnitude and lag
Population challenge: the Window of Opportunity
Global challenges: see climate change
The Services Revolution
Challenges for Europe
Challenges for India
India & Europe Win-Win Game
3
India and Europe 2025: still distantProjection 2025 en Mds USD (current US $ and current relative prices base 2000)
PIB China US India India* France Germany Japan Brazil Monde2005 2 300 11 100 671 671 1 400 1 840 5 190 615 36 2942025 8 287 19 287 1 890 2 772 1 833 2 692 7 113 605 60 902
PIB/hab2005 1 748 37 222 608 608 22 951 22 169 40 563 3 366 5 6142025 5 749 55 091 1 354 1 986 29 097 33 647 58 486 2 644 7 704
Population Mios2005 1 316 298 1 103 1 103 61 83 128 187 6 4652025 1 441 350 1 395 1 395 63 80 122 229 7 905
PIB % Monde2005 6,3% 30,6% 1,8% 1,8% 3,9% 5,1% 14,3% 1,7% 100%2025 13,6% 31,7% 3,1% 4,6% 3,0% 4,4% 11,7% 1,0% 100%
PIB/hab USA=1002005 5% 100% 2% 2% 62% 60% 109% 9% 15%2025 10% 100% 2% 4% 53% 61% 106% 5% 14%
Pop % Monde2005 20% 5% 17% 17% 1% 1% 2% 3% 100%2025 18% 4% 18% 18% 1% 1% 2% 3% 100%
Croiss. val/an 6,6 2,8 5,3 7,4 1,4 1,9 1,6 -0,1* Scˇnario croissance en volume Goldman Sachs et valorisation CEPII
India & Europe Win-Win Game
4
… even more per capita
0
10
20
30
40
50
60
70
80
90
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
in 000
USA
Japan
EUR4
China
India
source: Goldman Sachs oct 2003
GDP per Capita in USD at current exchange rate USD
India & Europe Win-Win Game
5
How long the Demographic Window of opportunity?
CHINA: annual rate of growth total and active population
-1,5
-1,0
-0,5
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
1950-55 1960-65 1970-75 1980-85 1990-95 2000-05 2010-15 2020-25 2030-35 2040-45
Total Pop
old 15-59
: INDIA: annual rate of growth total
and active population
1950-55 1960-65 1970-75 1980-85 1990-95 2000-05 2010-15 2020-25 2030-35 2040-45
-0,5
0,0
0,5
1,0
1,5
2,0
2,5
3,0Total Pop
old15-59
India & Europe Win-Win Game
6
The World Population 1950-2050 (billion)
0
1
1
2
2
319
50
1960
1970
1980
1990
2000
2010
2020
2030
2040
2050
Millions
Europe Eur Ouest USA China Afrique India
India & Europe Win-Win Game
7
Same in percentage, Different picture!
0%
5%
10%
15%
20%
25%19
50
1960
1970
1980
1990
2000
2010
2020
2030
2040
2050
Europe Eur Ouest USA China India Afrique
India & Europe Win-Win Game
8
Even more with the 15-24 years old group
0
50
100
150
200
250
300
350
40019
50
1960
1970
1980
1990
2000
2010
2020
2030
2040
2050
USA Europe India China Afrique
India & Europe Win-Win Game
9
The Earthquake on the global labor Market 5 years incremental variation of the age group 15-59 % total world
-50
-30
-10
10
30
50
70
90
110
1950-5
5
1955-6
0
1960-6
5
1965-7
0
1970-7
5
1975-8
0
1980-8
5
1985-9
0
1990-9
5
1995-0
0
2000-0
5
2005-1
0
2010-1
5
2015-2
0
2020-2
5
2025-3
0
2030-3
5
2035-4
0
2040-4
5
2045-5
0
India China Europe USA Eur Ouest Afrique
India & Europe Win-Win Game
10
CO2: a good exemple of the sustainable challenge
India & Europe Win-Win Game
11
II-The Services Revolution and the standart Economic Theory
India & Europe Win-Win Game
12
The Services Revolution and the standart Economic Theory
India & Europe Win-Win Game
13
The Services Revolution and the New Economic Theory of imperfect competition and localisation
1/ The ITC revolution allows an increasing number of services to be produced at TIME and PLACE different from the place of consumption. 2/ The production any services can be henceforth distributed internationally according to the comparative advantages of territories and of the competitive strategies of firms.
3/ The economics of services gets more and more closer to the standart « industrialisation model » and « imperfect competition » : high specialisation, return to scale, cluster and size benefits etc…
India & Europe Win-Win Game
14
Outsourcing: just a begining!
India & Europe Win-Win Game
15
Global Gains, yes, but what distribution?Country advantage(45-55% savings)
Vendor advantage(30-40% savings)
OriginalCostbase
FactorCostSavings
AdditionalTelecom& manage-ment costs
Off-shoreLocationcost
Consoli-ation,Standar-Dization& superiorskills
TaskReengineering
Econo-mies ofscale
ProcessReengine-ering
New costbase
Task migration Task levelimprovement
100 60-65
10-15 8-135-7
3-5
Does notInclude gains fromOver-delivery and
continuousimprovement
India & Europe Win-Win Game
16And Europe swandich between the USA and India
GrowingEmbryonic MatureEnd of cycle
Timing
Low(High)
Contract manufacturi
ng
IT Offshoring
AccountingHR
Call centers
Banking BPO
High(Low)
Maturity(Value Add)
R&D/Innovation
KnowledgeProcesses
How to reopen the pathway to India with a mixed strategy
India & Europe Win-Win Game
17
III- Dual challenge Europe and India
a/ for Europe The Brain Drain between Knowledge Based Economies: the EU Human Capital Outflows to the US (Ahmed Tritah survey, CEPII 2008) 1/ EU brain drain to US is about a small number of individuals, but the share of Europeans who are leaving is increasing as one moves along the educational distribution and ladder of occupations that matter the most in the knowledge economy.
2/ Using productivity based brain drain indices it is found that aggregate human capital conveyed by emigrants has increased since the 1990s.
3/ Finally, as a proxy for the of human capital embodied in EU emigrants, Europeans earn a positive wage premium relative to the US natives and even higher for the most recent expatriates cohorts, providing further evidence that the quality of European emigrants has increased.
India & Europe Win-Win Game
18
a/ for Europe (2)
India & Europe Win-Win Game
19
b/ for INDIA
India & Europe Win-Win Game
20
Understanding better the EU New Economic Geography in our Globalized World