More than 300 business people and entrepreneurs discussed the new business opportunities India offers at the 22@Update Breakfast on February 19.

At February 22@Update Breakfast, Parameshwar P. Iyer, associated president and head of research at the Indian Institute of Science, explained the current situation in India, focusing on the business opportunities and challenges present in this country.

He started his presentation with the firm declaration that India is one of the fastest growing economies in the world. Over the past few years, new sectors have opened up and attracted investors, creating a promising consumer market. With a growing service sector that is becoming more important and prominent on the world stage, India is also increasing their international trade at a frenetic rate. The urgent need to renew the country’s infrastructure is one of the main things holding them back from even faster development.

Four economic sectors are key to India’s economic growth: ICT, auto components, pharmaceuticals and textiles.

Dr. Iyer explained that India is one of the top world destinations, offering many important advantages for companies: location, costs, language, and skilled workers. He also said that the advantages India offers for establishing business headquarters are mainly related to cost efficiency and high-quality work. Choosing India allows companies to:

• Find a large number of university graduates
• Access many technical resources
• Reduce costs -Reduce production time
• Increase productivity by 10-15%

On the other hand, Parameshwar P. Iyer explained that companies move to India to reduce costs but stay and expand their operations there because of the quality and competitive edge the country offers.

“Companies move to India to reduce costs but stay and expand their operations there because of the quality and competitive edge the country offers”

The Indian challenge

Despite improvements that economic development has brought to the country, India still has many challenges to face. On one hand, investment in infrastructures has not grown at as fast as the economy needs. Developing India’s infrastructures, placing special attention on environmental issues and cultural aspects, is an immediate necessity that the country must face if they want to continue developing.

On the other hand, legal aspects such as intellectual property must also be taken into consideration and brought up to par with the current needs created by the country’s increased economic activity.

Opportunities for foreign investors

Despite these challenges, India still offers very attractive opportunities for foreign investors. However, India is a unique country and those considering investing there must also develop a unique strategy, an Indian strategy.

Some of the characteristics that determine the market options are, for example, the size of the territory –India is approximately 82% the size of the whole European continent–, and the variety of different languages spoken in the country –almost as many as are spoken throughout the European continent–, even though English is one of the official languages. Due to these facts, Dr. Iyer warned that companies can’t just transplant strategies, they must also choose the best business relationships, the best regional model, most global techniques, and conceptualize specific products in India. Moreover, Dr. Iyer also stressed the importance of optimizing the balance between emigrant directors and local talent.

India needs business people to benefit from these new opportunities and create jobs. Over the next 10 years between 110 and 130 million Indians will look for a job.

Parameshwar P. Iyer, professor at the Indian Institute of Science, concluded his presentation by offering his view of his country’s future: “I believe that India has an extraordinary talent pool whose potential to become entrepreneurs is practically limitless.”

22@ Innovator of the month: Enric Solé, founder and CEO of Sitmobile

The businessperson invited to share their experience at February’s 22@Update Breakfast was the founder of Sitmobile, a company that provides mobile access and solutions, and has experience working in India. Founder and CEO Enric Solé started off his presentation by making it clear that moving into India is a “very, very tempting idea!”

Sitmobile initiated their relationship with India in 2005 during a “business bridge” to Mumbai and Bangalore, organized by the Chamber of Commerce. Sitmobile started off with a joint project with an Indian company. Only a few months later Sitmobile bought part of the company, which slowly became their main supplier. After working together for 18 months, they found they were not “in line” anymore. To solve this problem, Sitmobile decided to start a company on their own and expand their business in India (incorporating sales and support, not just development). “We quickly found out that the Indian market is very different from the Spanish market,” explained Enric Solé. The CEO of Sitmobile agreed that his company initially went to India in order to lower costs, but they quickly realized that it’s not only about reducing costs but also about the development services opportunities.

Finally, SITmobile chose to establish their office in Kerala, which is in southern India, has good universities and is well connected. Quality of life is high, 100% of the population is literate and they don’t have the same poverty levels as other parts of India. Large cities like Mumbai, Bangalore and Delhi are already relatively expensive. “Kerala offered us a new opportunity to find many professionals and still enjoy low costs.” Regarding Human Resources, India has a large number of very talented, ambitious and hard-working professionals.

Therefore, Sitmobile has chosen an in sourcing strategy in India, which looks for talent abroad that is difficult to find here and, at times, optimizes costs.

“If you can be competitive in India, which is very difficult, you can do it in Asia and Africa”

“If you only want to reduce costs, go to South America. If you want to improve and develop globally, go to India”

The head of SITmobile explained that, since Indian culture is very different from European or South American cultures, it is essential to bring Indian workers to work in the company’s offices in Spain before going to India. “They understand and help you,” explained Solé.

Before finishing his talk, February’s Innovator of the month reminded everyone that the biggest advantage of the Indian market is that you can find professionals that look at the international business perspective. “If you only want to reduce costs, go to South America. If you want to improve and develop globally, go to India. You will reduce costs but you’ll also have a lot of opportunities to improve. You might end up selling your product on the global market,” declared the founder of SITmobile to close his presentation.

Finally, director of the Barcelona Chamber of Commerce’s Business Internationalization Area, Josep M. Cervera, explained that the Chamber of Commerce is increasing its international exchanges, building bridges with India, and in order to do this they are helping promote development and international expansion of Barcelona’s commerce. The Chamber of Commerce promotes a number of programs with this objective like the Plug & Play, Forfait international, MIT-Spain, Tech Bridge, and Landing programs.

Josep M. Cervera stressed the idea that Barcelona has to let the world know more about the city in order to open up and expand its business sphere around the world. Cervera made it clear that if you can establish contacts in India, the whole country will open up to you. “In India if someone recommends you, that’s all you need,” explained the director of the Barcelona Chamber of Commerce’s Business Internationalization Area.

“In India if someone recommends you, that’s all you need!”

To finish up, Josep M. Piqué, managing director of 22@Barcelona, thanked the Indian students present at the event, who participated in the question-answer session with the speakers. He also announced the next event organized by 22@Barcelona and KimBCN: a symposium on new knowledge and innovation markets which will take place February 27.

KEY IDEAS