India is emerging as the world’s fastest growing economy for 2016 and 2017. Currently, India is a services-driven country. The manufacturing sector in India has been facing challenges due to constantly changing economic, social and technological changes. Its share of manufacturing Gross Value Add (GVA) has hovered around 17-18 per cent since FY2013. The sector is beset with various problems – low productivity, capital and skill intensive, complex labour regulations, frequent power outages, below-par infrastructure, etc.
Given its strategic importance to the country’s economy, the Government of India has recognised the revival of India’s manufacturing sector as one of its topmost priorities through the “Make in India” (MII) initiative. This project is expected to create a “global manufacturing hub” in India and is expected to not only boost the manufacturing sector’s plateauing performance but also make it internationally competitive.
Apart from encouraging foreign investments into India’s manufacturing sector, improving ease of doing business, strengthening IP rights/implementation, etc., what is emerging as an imperative for this sector is the rapid adoption of technology at all levels across the manufacturing value chain. This sector is now at the cusp of a fourth industrial revolution – on the way to an Internet of Things, Data and Services. Technology that used to be more of an appendage has, in the recent times leap-frogged to be the core focus of design and manufacturing. Today, no product can be designed without a lot of technology embedded into it, right from the conceptualisation stage.
Consumers, the final users of both the product and the technology, have also played a key role in triggering this disruption. As the world increasingly becomes mobile-centric and internet-enabled, user experience of any product/service is emerging as a key differentiator.
The last decade has seen an explosion of new technologies, beginning with SMAC (Social, Mobility, Analytics and Cloud) that have and continue to disrupt businesses. Technologies like robots, automation, AI, simulation, 3D Printing, IoT, augmented reality, and more recently, drones have enabled the manufacturing value chain to optimise costs, improve productivity, enhance supply chain efficiencies, and significantly influence and improve user experience – the No. 1 RoI.
Enterprises are responding by re-aligning their businesses and their products/services to these changes and thereby becoming a Digital Enterprise. These digital enterprises are characterised by five distinct aspects: customised, connected and convenient products & services; digital channels focused on customer experience; advanced production methods that reduce operating costs; redefining customer experience; and enhancing operational efficiency.
As Jeff Immelt (Chief Executive, General Electric) so rightly said - “Industrial companies are in the information business whether they want to be or not.”
As OEMs mature further and seek the next level of growth, the question being asked is – Can India establish itself as the design hub for the world? Not just Make in India, but Design in India as well?
Indian OEMs across verticals are working on new products/innovations and exploring ways and means to leverage/embed emerging technologies into these products – can India’s technology sector play a key role in this space?
As Indian firms embark on their journey to transform into a Digital Enterprise, can they leverage the strengths of the technology sector to enable a seamless transition?
NASSCOM is reaching out to the demand side to get their perspective in an attempt to find the answers. In the next part of my blog, I will share some of the insights gleaned from these meetings that may provide us with a roadmap of where and how we can contribute.