...the biggest obstacles are going to be the country's long-standing challenges of income inequality and access to quality education
Oxymoronic as it may sound, the next normal will be a steady state that is on constant move, fueled by powerful technological innovations that will empower consumers, and accelerate efficiencies in production processes by several multiples.
This makes it crucial for businesses to rapidly adapt to newer technologies, triggering changes in growth and revenue assumptions in which existing structures will collapse to be replaced by new models. All these will have macroeconomic implications too, with trajectories set to change and most economies, including India, having gone through a reset mode.
Influential national and international figures, global CEOs, opinion makers and government leaders shared their insights on these changes at the Economic Times Global Business Summit 2022 in a wide variety of topics sewn together under the broad theme ‘The Great Resurgence: Now, Next & Beyond.’
Importantly, India had been the global growth engine for years before the pandemic disrupted the applecart. When is India set to regain this lost status? Another key goal. What would it require, from a policy matrix point of view, to turn India into a darling for investors— foreign and domestic?
Punit Renjen, Global CEO, Deloitte, was emphatic and upfront, ticking the boxes on challenges and the prospects in a session fittingly titled “India’s Promise & Potential”.
“I think the biggest obstacles are going to be the country’s long-standing challenges of income inequality and access to quality education. So, let’s talk more about that, starting with access to education. India is already home to one of the largest millennial populations in the world. And as you know, in the next decade, the number is only going to grow. It is expected that India will have the highest population of young people by 2030 in the world”, Renjen said.
The critical aspect, however, would be to create meaningful employment opportunities in millions for a long period of time for the armies of youth that join the queue of job hopefuls every year in India.
“But the jobs of tomorrow will focus on technologies like AI, cloud and cyber. New skills will be required. Will India’s young workforce have the skills to lead the economy forward? I believe it’s a fair question and one that I think will depend largely on what action both government and business take. Now, in my opinion, the path forward is clear. It will be harder to get to 5 trillion if you don’t get this right. India’s national education policy is a powerful start, but this is also a critical opportunity for business to step up,” Renjen said.
The path to the “new” normal is actually the road to the “next” normal. The nuance is important. A new is, in many ways, also a newer version of an existing state. The next, however, represents a dramatic alteration of the current being.
Global companies with large transnational footprint that acknowledge this distinction will be the ones that will keep their nose ahead in these rapidly changing times.
“We operate in 24 different countries, 2.2 million people. And when the first stage (of Covid-19) started happening, of course, there was a lot of uncertainty. We figured it out fairly quickly. We’ve made a lot of progress becoming more of a digital company and being powered by technology in different ways,” said Doug McMillon, President & CEO, Walmart Inc., at a session themed Adapting to the Next Normal.
Historically, there were parts of Walmart’s business where it really leaned on technology. But Covid-19 has triggered a holistic digital transformation that starts with data. “It relates to how we have connected our systems with software and started to put machine learning (ML) and artificial intelligence (AI) at work. All these things get built on a tech stack that is more modernized than it was before. But we actually, all of us had to change our mind set in a way of working to start to design digital products differently, to work in more of an agile fashion, to collaborate with engineering and other parts of the company, data scientists and others in different ways than we had before”, McMillon said.
But, how has the landscape changed for capital movements and deployments? How has the framework altered?
The probably the most important thing for private equity groups to put money to work is to raise the money, and put it to work in a proper fashion.
Bruce Flatt, CEO, Brookfield Asset Management weighed in with his views.
“What is troublesome is when you can raise a lot of money and valuations are high and you put it to work at that point in time. But given that there’s significant cash raised and valuations have been coming in, just because stock markets are down and there’s more disruption in the world, that’s a great opportunity to put money to work. So, I believe that there will be some great opportunities. Now, there may be some sectors that don’t play out, but there will be many things at this point in time. Returns will be higher in the longer term than you would have otherwise found because you’re taking businesses, private or otherwise, at lower multiples,” Flatt said.
Written By Anupama Sughosh
Edited By Queenie Nair