June 25, 2006
BRUSSELS: By the year 2020 India, China and the US will jointly
contribute $1 trillion to the global economy, according to a study 'Foresight
2020' conducted by the Economist Intelligence Unit (EIU). The next fifteen years
will see significant outpacing of the rest of the world by Asia, particularly
the powerhouses of India and China, in gross domestic product (GDP), wages and
consuming power. India will contribute 12.2% to global economic growth by 2020.
The study projects the continued rapid growth of India as one of the fastest growing economies. By 2020, India as a trading nation will record the biggest jump in world ranking-from 24th to 10th. Propelled by fast growth in India and China, Asia will increase its slice of the world's GDP from 35% in 2005 to 43% by 2020. India's share in the global GDP will rise from 6.2% in 2005 to 8.8% in 2020.
Developing Asia will account for two-thirds of the increase in employment growth, with India alone making up 30% of the net increase in global employment with 142 million new jobs.
World's consumer spending will expand at an annual rate of 5.6% to US$ 62 trillion by 2020 compared to US$ 27 trillion today. Though US will continue to be the largest consumer market, China will emerge as the world's second largest consumer market and India will rival the bigger European markets. India's share in world consumer spending will increase from 1.9% in 2005 to 3.1% in 2020.
India's growing integration with the global economy and its favourable demographics are likely to ensure a sustained rate of growth of 5.9% a year in 2006-20. India's democracy is well entrenched; its legal system is impartial, if slow-moving, and its constitution is respected. However, India's much-discussed IT sector accounts for too small a share of GDP to be a long-term driver of growth. Much more will depend on the modernisation of the country's agriculture and manufacturing.
Specifically the study found that tailored customer experiences will play a critical role in economic success. Companies will create competitive advantage by creating high touch customer experiences through customisation of products and quality of customer services.
"The rapid growth of India as reflected in this survey is already apparent in the evolving and complex needs of our customers in the Indian market," said Ranajoy Punja, Vice President-Marketing, for Cisco Systems. "As production processes and transactions become more commoditised and automated, value with customers lies in hard-to-replicate personal relationships and interactions.
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