2012 Association International Conference

Land of Opportunity and Challenge: Build and Expand Business in India

Tarnbir Kaur, CAE- Director,

Association Management & Consulting, MENA & India

Our Agenda

Why India?

How India is unique?

Size of opportunity?

Understanding associations

Challenges

Strategies to use

Why India?

India – Overview

• WEF Ranking of 51• Stage 1 - factor-driven country markets• Phased planning process since independence

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Rise of Middle Class in India

Huge Market for Global products and services• Average household incomes to triple over the next

two decades • World’s 5th-largest consumer economy by 2025• By 2025 India’s wealthiest citizens will total 24

million• Urban population to expand from 318 million to 523

million in 2025

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Increasingly young population

Young Population which will augment productivity of the Nation• Over 35% of India’s population is below the

age of 20• Surplus of 47 million working people by

2020• Dependency ratio to drop from 60 today to

48 by 2025 • Disparity in growth throughout the various

states

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Gradually improving Business Environment

• Commitments to infrastructure more than 9% of GDP

• Involvement of private sector increased in all aspects of development

• Roads, Port, Power, Highways, Airports, Railways, Telecom and IT all a key priority for the government and have made remarkable achievements

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Economic progress despite global recession

Growth driven by a step up in value chain in IT, pharmaceutical, manufacturing

FDI into India remains unaffected by the global slowdown

Manufacturing, communication services and the real estate sector major drivers of FDI

Special economic zones to accelerate exports

Leading Industries by sector

Top sectors attracting FDI equity inflows into India (FY11)

Source: “Doing Business in India 2011” by Earnest & Young India’s 12th Five Year Plan

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Frugal innovation leading to effective solutions

Frugal innovation emerged from drive innovation despite limited resources and financial constraints Frugal products in the market in all sectors such as cars, consumer

durables, banking solutions and computers Concept not new as demonstrated by the Six Sigma dabbawalas

delivery system International companies leading frugal innovation in their Indian

operations US $ 35 Tablet – Akash Entrepreneurial, indigenous companies

Urbanisation

Source: “India Outlook 2011-12” by D&B “India Outlook 2011-12” by D&B

India’s Consumption Basket

Source: Gale

Pronounced Skill Gaps

“We will need to ensure far greater availability of educational opportunities at the higher education level so that we have not just a literate youth but a skilled youth,

with skills which can fetch them gainful employment. As our economy boomsand as our industry grows, I hear a pressing complaint about an imminent shortage of skilled employees. As a country endowed with huge human

resources, we cannot let this be a constraint.”

Indian Prime Minister Manmohan Singh, Independence Dayspeech-2006

India- skill pyramid

Source: FICCI and IMcas

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Import of Higher Education in India

Lack of quality institutions in India leading to interest from western universities

• India (11%) higher education compared to US (82%)• 185,000 Indians study overseas and spend US$ 13 Bn• Opening up of higher education sector recommended by National

Knowledge Commission (NKC)• Foreign university partnerships increasing in India

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Participation of Private sector in Education to close skills gap

Phenomenal growth in private education predicted in the higher education sector• Ranking of 85 on the WEF Global Competitive Index pillar - Higher

education and training • 30private equity and venture capital investors worth over $300 million• Education sector in India expected to reach US$64B in 2013 and

US$107B in 2018

Growth Sectors and Manpower needs

Popular and most in demand professions by employers seeking labour

Based on research done by www.naukri.com, India’s no. 1 job site, top jobs in India are in:• IT Software • BPO (Business Process Outsourcing)• Sales• Finance• Marketing• Engineering• HR Administration• Government jobs• Telecom

Sectoral Growth Rates

• Energy• Transport• Sustainable management of

natural resources• Rural Transformation• Farm sector• Manufacturing sector• Health• Innovation

• Education and skill development

• Social and regional equity• Challenge of urbanisation• Science and technology• Services: Tourism, Hospitality

& Construction• Governance

The 5- year Plan indicates that government policy supports an investment plan in the following 14 sectors:

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Understanding India

Before Liberalization After Liberalisation

Contentment and Stability (Hindu rate of growth)

Striving to keep up with others

Swadeshi (Indian products) Making world class products that can be exported

Self reliance Efficiency

Isolation Exposure

Ideology Pragmatism

Protection Enabling Competition

Skepticism about technology Embracing and using technology

Understanding India

Indian Values Western Values

Patriarchy Egalitarianism

Ambiguity, Adaptability Clarity, linearity

Low dissonance Need for resolution

Socially defines roles Individually chosen roles

Patience and passivity Impatience, assertion

Continuing with tradition Constantly seeking change and novelty

Happiness= self harmony Happiness=material gains

Respect for age Respect for youth

Understanding India

• Unique growth patterns and trends

• Managing plurality

• Constantly changing

Associations in India

• Vibrant association culture • Easily incorporated under Society Act• Professional associations not very evolved with

successful revenue models• Concept of lifetime membership• Value conscious market

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Indian Associations

• 57 professional societies and 108 trade associations in India

• Among the total 165 associations, 41 have membership >1,000, accounting for about 25%.

Source: Gale

Popular certification programmes in India

International CertificationsCertification Association

Chartered Wealth Manager Designation (CEM)

American Academy of Financial Management

India Certified Crop Adviser (CCA)

American Society of Agronomy (ASA)

Certified Technical Analyst (CeTA)

Association of Technical Analysts (ATA)

Project Management Professional (PMP)

Project Management Institute (PMI)

Certified Internal Auditor (CIA)

The Institute of Internal Auditors (IIA)

Finance CertificationsCertification Issued Organisation

Certified Financial Planner Education Programme

Indian Institute of Financial Planning

Certificate Course in Project Finance

Indian Institute of Banking and Finance

Certificate Programme in Quantitative Finance and Risk Management

Indian Institute of Quantitative FinanceLocal IT Certifications

Certification Issued Organisation

VMware Certified Professional(VCP) VMWare

Microsoft Certified Systems Engineer (Security) (MCSE) Microsoft

Cisco Certified Network Professional (CCNP) Cisco

Certified Information Systems Auditor (CISA)

Information Systems Audit and Control Association (ISACA)

Certified Information Security Manager (CISM)

Information Systems Audit and Control Association (ISACA).

Lifetime membership fees

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Association INR USD

Computer Society of India

8,500 160

Indian Pharmaceutical

Association

6,728 127

Association of Physicians of India

5,000 95

The Association of Engineers, India

1,500 28

Association event registration fee

30

Association INR USD

Computer Society of India

2,000 38

Indian Pharmaceutical Association

5,000 95

Association of Physicians of India

4,500 85

The Association of Engineers, India

3,600 68

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Challenges

• Corruption• Complicated tax and legal structure• Infrastructure• Government control• Administrative and political reform

India- ease of doing business

Source: World Bank

Regulations (For profit organisations)

Foreign entities who want to trade in India or carry out their operations can carry out in the following forms:• Through a full fledged representative in India taking management

decisions and carrying on business in India as an Indian Entity this may be referred to as the Permanent Establishment in India.

• Through a representative limited in transactions in India – i.e. the basic management rests out of India and only the representative is there to facilitate a contact between the customer/client and company.

• Through a 100% subsidiary incorporated in India called the Indian Arm.

• Through a Liaison office

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Success achieved by “Global Indianised” products

Only global products that have reviewed the needs of the Indian market and adapted accordingly have been successful• Continued success of Indian companies such as Infosys, TATA, Reliance,

WIPRO and ICICI over its international competitors• Success of international companies such as Google, Nokia, LG and

Facebook that have adapted to local needs• Price conscious consumers and dramatically different needs for various

segments needing different products for each segment• Local management teams that understand the local culture, needs and

challenges.

With the demand being driven by needs that are arising from local requirements, will your association be able to customize or innovate some of its products from content, pricing and delivery methods to meet the local demands?

Strategies for Growth

• Its all about relationships

• Creating relevance for many segments

• Creating perceived value advantage

• Getting business economics right

• Multipronged strategy

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Thank you for your attention

Tarnbir Kaur, CAEDirector- Association Management and Consulting, MENA and IndiaMCI Group+971 4 3116300Tarnbir.kaur@mci-group.comwww.mci-group.com