Industry stalwarts, Anand Mahindra, Chairman of Mahindra Group and Kumar Mangalam Birla, Chairman of Aditya Birla Group, highlighted their views about manufacturing in India and said that new technologies and better regulation will help the country emerge as the new manufacturing and innovation hub of the world.
The duo were part of a panel discussing the government's ‘Make In India' initiative on the sidelines of the ongoing ‘Make In India Week’ in Mumbai. The panel discussion organized as part of the CNN Asia Business Forum 2016 was moderated by CNN's Richard Quest, the host of 'Quest Means Business'. Other panel members included Banmali Agrawala, President and CEO, GE, South Asia and Edward Monser, President of Emerson Electric.
Speaking against the notion that India is not known for its innovation, Birla said, "I do not agree that we are not innovative. I think, as a country, we are highly innovative." He did agree that India has lagged in R&D investments because of the disparity in resources between India and the Western nations, which has made it dependent on the West for R&D investment; a situation he said that needed to be changed.
Mahindra also opined that innovation could not be mandated, neither could execution. Addressing concerns that 'Make In India' was more of a slogan, Mahindra said, "Let us not be pejorative about the word 'slogan'. You need a rallying cry. This government is trying to focus attention."
On the role of the government in fostering innovation, Mahindra said the government should provide direction and then move out of the way. "Government should put in place institutions that encourage entrepreneurship. It should set up regulations, like bankruptcy laws, which makes it easier for people to move in and out of business and leave the rest to us. Remove the stigma against failure, make the penalty of failure minimal and make the fear of failure go away," he added.
Adding to the point of entrepreneurship, Birla pointed out, "10 years ago being an entrepreneur was a stigma. It was felt that you became an entrepreneur only when you have failed in everything else. This has now changed. It is a matter of change that is happening due to evolution of the economy. The government has a role to play as a catalyst. There are things that still need to be done on the ground."
Commenting that India had shown great promise in the field of entrepreneurship Agrawala said the focus has always been more on spreading wealth rather than creating wealth but the message has now changed. "The market has moved more towards solutions. Manufacturing is no more just about products," he added.
On making India the manufacturing hub of the world, Birla was of the opinion that new technologies like algorithms that optimize manufacturing, miniaturization, remote sensing, etc. will have a major role to play. "We have to stay contemporary," he said. He, along with other panelists, agreed that disruptive solutions would be needed to further improve the manufacturing process.
Mahindra added that decentralization and digitization would be highly important going forward as the country looks at increasing the buyer base. "Creating a decentralized model of production is a challenge that we need to talk about more," he said.
Mahindra was also of the opinion that we would see migration of some low-cost, large-scale production from China to India. "But this is not the only type of manufacturing that we should do. We have a chance to leapfrog China. Indians need to build global brands and then decide where to manufacture them," he added.
Monser also suggested that India will need to change its image as a producer of cheap, low quality products. “Make In India should be about high quality production,” he said.
All the panelists agreed that talent would become increasingly important if the dream of making India a global manufacturing hub was to be realized. However, on being asked whether companies should hire talent from within India or from other geographies, Agrawala said that companies have to be neutral about talent.
"We cannot set artificial rules about where talent comes from. If you have a reason for people to come to work every day; an overarching vision, then you will attract and retain talent," said Mahindra.