Experts see huge market opportunity in India's poor population

NEW DELHI: Domestic companies should consider India's large poor population

as a huge market opportunity and design products and systems that are targeted

at them. The skills and innovations developed through this process can then be

used for selling products and services to poor people throughout the world. The

success of this model will contribute towards an annual economic growth of 10 to

15 per cent and the creation of 10 to 15 million new jobs every year, India's

two top priorities for transforming the economy.

This was stated by C K Prahalad, management guru and professor of business

administration, Michigan University, while addressing a session on

"Restructuring of Global Industries: A Role for India'' at Tiecon 2002.

He also said that India would be able to influence global industry evolution

only if it becomes a growth market, focuses both on manufacturing and services,

creates global scale companies, stops differentiating between domestic and

export markets and develops low cost high quality technology.

A 21st century super power, Prahlad said would have to be both militarily and

economically strong. If India continues on its current five per cent growth

path, the gap between India and other countries including China will continue to

widen and by 2010, India's economy will be one-sixth that of China. "The

challenge before India is to transform its economy. With a five per cent growth

rate, India will be unable to compete with China in transforming its economy. At

five per cent growth, you won't get a chance to play,'' he said.

Therefore, unless India was willing to accept a diminished international

status, it had no option but to clock an economic growth of 10 to 15 per cent

and to create 10 to 15 million new jobs, year after year, for the next 20 years.

Prahalad said global firms today were in a constant search for new revenues,

cost reduction, quality improvement, scale and speed. In this context, he said

India had sold itself short by focussing too much on low labor cost advantage

and not adequately emphasizing the quality aspect.

Earlier in the inaugural session, Dr Mashelkar, Director General, CSIR said,

"After the dotcom bubble burst, world economy is on the revival path and

therefore there is a need of hassle free dotcom today."

Rajiv Ratan Shah, Secretary, Ministry of Information Technology stressed the

need of need of computers in education especially in rural areas. "We have

started several programs and soon we will be able to take the IT penetration at

the grass root level of the country."