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INDIA IN THE NEW KNOWLEDGE ECONOMY The Changing Scenario Dr

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INDIA IN THE NEW KNOWLEDGE ECONOMY The Changing Scenario Dr. Naresh Trehan Chairman, CII National Committee on Healthcare & Executive Director ... – PowerPoint PPT presentation

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Title: INDIA IN THE NEW KNOWLEDGE ECONOMY The Changing Scenario Dr


1
INDIA IN THE NEW KNOWLEDGE ECONOMY The Changing
Scenario
Dr. Naresh Trehan
Chairman, CII National Committee on Healthcare
Executive Director Escorts Heart Institute
and Research Centre, New Delhi, India
2
INDIA IN THE NEW KNOWLEDGE ECONOMY
Transition from BPO to KPO Destination
  • 8
  • 51
  • Growth of Services sector
  • Contribution to Indias GDP

Knowledge Process Outsourcing - To grow 46 to
17 Billion by 2010
  • Emerging Trends in the last two years
  • Silicon Valley VCs setting shop
  • US companies relocating up to 95 of RD work in
    next generation technologies especially in the
  • wireless space optical networking systems.
  • Intel, Cisco doing core development work on chip
    design.
  • Texas Instrument has its global centre for
    wireless LAN semi-conductors RD based in India
  • Tech Multinationals have filed 1, 700 global
    patents for product developed out of India
  • Automotive engineering design services (AEDS)
    projects already executed 500 million worth
    of
  • Global Contacts Boschs Indian team does
    major chunk of Diesel systems development in
    India

PRODUCT DEVELOPMENT REQUIRES ONE FOURTH THE
INVESTMENT IN INDIA
3
INDIA IN THE NEW KNOWLEDGE ECONOMY
  • Healthcare
  • Pharma Biotechnology
  • Information Communication Technology (ICT)

4
Indian Healthcare The Changing Scenario
Current Healthcare Landscape
5
Indian Healthcare The Changing Scenario
INDIA SPENDS US 22.7 BILLION ON HEALTHCARE
5.2 of GDP
Total Healthcare Market
Pharma market
Healthcare delivery market
Retail Source National Accounts Statistics
2001 McKinsey analysis
6
Indian Healthcare The Changing Scenario
THE HEALTHCARE DELIVERY SECTOR PLAYS AN
IMPORTANT ROLE IN THE ECONOMY TODAY
Sector
Direct employment
Revenues/GDP
Million, 2000-2001
Per cent, 2000-2001
Healthcare
Education
Healthcare is the largest service industry in
terms of revenues and the second largest after
education in terms of employment
Retail banking
Power
Railways
Telecom
Hotels, restaurants
IT
By 2012, the sector could account for 7 to 8 per
cent of GDP and provide direct and indirect
employment of 9 million
Source National Accounts Statistics, 2001
Manpower profile CBHI McKinsey analysis
7
Indian Healthcare The Changing Scenario
IN TERMS OF DELIVERY, PRIVATE PROVIDERS CAPTURE
63 0F THE US 19 BILLION SPEND
Healthcare provision, 2002
Per cent of total spending
100 US 19 billion
Government and public employers
Private providers (individual, charitable and
for-profit)
Including government spend (20),
public employers spend (11) and out-of-pocket
spend at government providers (6) Source
McKinsey analysis
8
Indian Healthcare The Changing Scenario
INDIA AN EMERGING HEALTHCARE HUB
9
INDIAN HEALTHCARE CAPABILITY FACT1 Proven
Indian healthcare system
  • Over 60,000 cardiac surgeries done per year with
    out comes at par with international standards
  • Multi organ transplants like Renal, Liver, Heart,
    Bone Marrow Transplants, are successfully
    performed at one tenth the cost.
  • Patients from over 55 countries treated at Indian
    Hospitals.

10

INDIA HAS THE OPPOURTUNITY TO PROVIDE THE BEST OF
THE WEST EASTERN HEALTCARE SYSTEMS
Indian Systems Of Medicine Staging a Comeback
  • Ayurveda recognized as an official healthcare
    system in Hungary.
  • Doctors in the west are increasingly prescribing
    Indian Systems of Medicine
  • More than 70 of the American population prefer a
    natural approach to health
  • Americans are said to spend around 25bn on
    non-traditional medical therapies and products

Indias Gift to the World
Ayurveda Yoga Siddha
Source Los Angeles Times Economic times
dated 25th July 2003
11
HEALTHCARE.THE SUNRISE INDUSTRY
Physicians, Nurses, Medical Technicians and
Other Scientific Occupations will Become Growth
Industries to Rival the IT Sector within the Next
Decade - India Vision 2020 Report
12
Indian Healthcare The Changing Scenario
Cost Advantage
PROCEDURE
COST (US)
THAILAND
INDIA
US
UK
THAILAND
US
Heart Surgery Bone Marrow Transplant Liver
Transplant Knee Replacement Cosmetic Surgery
7,500 ------- ------- 8,000 3,500
6,000 26,000 69,000 6,000 2,000
40,000 2,50,000 3,00,000 20,000 20,000
23,000 1,50,000 2,00,000 12,000 10,000
13
Indian Healthcare The Changing Scenario
HUGE GROWTH POTENTIAL TO GROW BETWEEN US 43
US 60 BILLION IN 2012
60.0
US IN BILLION at 2000-2001 prices
ESTIMATE
51.0
17.0
43
8.0
8.0
43.0
19
43.0
Government spending
3.76
35.0
Private spending
15.24
2012 Scenario 1 Baseline increase in private
spend
2012 Scenario 2 Baseline with insurance in
middle class
2012 Scenario 3 Baseline with insurance and
high government spending
2001
Key Assumption
Government Spending
1 GDP
1 GDP
2 GDP
With 6 GDP real growth per year
14
Indian Healthcare The Changing Scenario
INDIA OFFERS HUGE POTENTIAL FOR INVESTMENTS IN
HEALTHCARE OVER THE NEXT 10 YEARS
Investment requirements in India (Estimates)
US in Billion Next 10 years
Healthcare
22-31
Investment needs of the healthcare sector are
comparable to other infrastructure sectors
Power
95-126
Telecom
40-51
Roads
24-33
Estimates based on analysis detailed
in Chapter 3 of this report
Estimates computed by scaling 2002-06
estimates from Rakesh Mohan committee report by a
factor of 1.5-2.0
15
Indias Growth Sectors - Pharmaceuticals
Biotech
INDIA IN THE NEW KNOWLEDGE ECONOMY
16
  • The Indian Pharmaceutical Industry
  • has practically achieved
  • Self sufficiency
  • Global recognition
  • as a
  • Low cost producer
  • of
  • High-quality bulk drugs formulations

17
KEY ACHIEVEMENTS
Indias huge population and the prevalence of a
wide spectrum of disease conditions offer a wide
patient-resource for clinical trials
India has the 2nd highest number of qualified
doctors in the world. Of every six medical
doctors in the US, one is Indian
While clinical trials cost approximately 300 to
350 million in US, they cost only about 25
million in India
Indian companies are offering custom synthesis
services at 30-50 cost savings compared to
global costs
Investigational New Drug stage costs about 100
to 150 million in US, but costs only around 10
to 15 million in India
700,000 science and engineering graduates 1500
PhDs qualify annually. Over 15,000 scientists
18
CHANGING FACE OF INDIAN PHARMA
Top 5 Companies Sales Export Revenues
Source Company reports
19
CHANGING FACE OF INDIAN PHARMA
CHANGING FACE OF INDIAN PHARMA
Co-marketing
New Drug Research
Glaxo-Cipla, Wockhardt-Bayer, Ranbaxy-Knoll
tie-ups
Glaxo SmithKline's recent RD alliance with
Ranbaxy Laboratories
Clinical Trials
Pharma - IT
COLLABORATION
Novartis, Astra Zeneca and Eli Lilly making India
a global hub for clinical trials
Novartis processes drug safety data and is
designing clinical development software
Local research
In-licensing
Astra Zenecas 40 million RD facility in
Bangalore for TB drug discovery
Ranbaxy licensing agreement with KSB, UK for
marketing TransMID
Source Media Reports, EY
20
INDIA IN THE NEW KNOWLEDGE ECONOMY
BIOTECHNOLOGY
21

Market - A Consistent Uptrend
25 growth in investment
2002-03
70 growth in employment
74 growth in RD manpower
USD 5 billion annual revenues
2010
1 million skilled jobs
10 of global industry
Source Confederation of Indian Industry (CII)
22
GOING GLOBAL IN BIOTECH
SOURCE FROM INDIA
Shantha Biotech- SHANVAC-B meets 40 of the
global demand of Hepatitis B vaccine.  
Indias first genetically engineered vaccine
costs less than half the price of competing
vaccines
Clinton Foundation sourcing HIV treatment from
four firms - three of which are from India
India largest producer of Measles DTP
vaccines. Vaccine exports to over 130 countries
Biogenerics - 25 billion
biological products going off patent in 2004.
Indian companies strong in biogenerics
Biocon was the first enzyme company globally to
receive ISO certification in 1993
Bio Agri - India (2nd largest producer of food)
offers significant opportunities to source
products
One out of every two children in the world is
immunized by a vaccine made in India
Source Newspaper Reports
23
The India Advantage
Excellent network of research laboratories
Well-developed base industries
Rich biodiversity
Extensive clinical trials opportunities
Trained manpower and knowledge base
24
INDIA IN THE NEW KNOWLEDGE ECONOMY
Information Communication Technology (ICT)
25
India Key IT figures
  • Software services export(2004-05) US 17.5
    billion
  • Grown from a 150m in 1991-92
  • CAGR in last 10 yrs 35
  • Projected to be US 50 b in 2008
  • Software services domestic(2004-05) US 4.5
    bn
  • IT enabled services(2004-05) US 4.9 bn
  • IT domestic hardware(2004-05) US 4.8 bn

US bn
Balanced Portfolio of IT offerings
Source McKinseyNASSCOM
26
India Moving up the Value Chain
Aligned to Technology Needs
Source SSB, Fall 2000
27
Telecom Market
  • 7th largest telecom network in the world
  • Size (2003) US 9 billion
  • 2010 (projected) US 23 billion
  • Telecom network growth rate 30
  • Fixed lines (Dec, 2004) 44.76 million
  • Wireless connections (Dec, 2004) 48 million

28
Rising Teledensity Telephone Subscribers
  • India is targeting 250 million users by 2007
  • India needs 30 billion to meet a target of one
    phone for every five people by 2010
  • Total telecom revenues expected to almost triple
    from USD9 billion in 2002 to
  • USD 23-25 billion by 2007.

29
WORKFORCE SHORTAGES AND AVENUES OF SUPPLY
Potential surplus population in working age group
(2020)
Germany
-3 Mn
UK
-2 Mn
Russia
Czech Republic
0Mn
-6 Mn
-1 Mn
Ireland
Turkey
Iraq
-17Mn
2Mn
China
-3 Mn
France
-10 Mn
US
-9 Mn
Japan
2Mn
Israel
Pakistan
Iran
5Mn
Spain
0Mn
-3 Mn
-2 Mn
19 Mn
3Mn
Philippines
7 Mn
Italy
47 Mn
Bangladesh
5Mn
4Mn
Egypt
Mexico
4Mn
India
Vietnam
1Mn
Malaysia
5Mn
3Mn
Indonesia
Brazil
Note Potential surplus is calculated keeping
the ratio of working population (age group 15
59) to total population constant Source U.S.
Census Bureau BCG Analysis
30
THANK YOU
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