India’s manufacturing sector embraces frugal engineering: Frost & Sullivan
January 13, 2016 10:45 am
Other major trends include the rise of connectivity and data traffic, move towards bricks and clicks model, and emergence of a she-conomy
Frugal innovation will be the key value proposition in the manufacturing space, observes research agency Frost & Sullivan in its latest analysis titled “New Mega Trends in India”. It said that business models surrounding this concept have already yielded low-cost alternatives for simple goods like tablets and complex ones such as satellites.
The report suggests that encouraged by the strong contribution from the industrial and manufacturing sector, India would shift from a services-based economy to an industry-driven one by 2025. The manufacturing sector could account for a whopping $1,149 billion by 2022 in terms of gross value-added to gross domestic product (GDP).
“India will be among the global leaders in at least 10 big markets of the future. For one, it will be the fifth largest exporter and top manufacturer of chemicals worldwide. It will also emerge as the biggest consumer market for luxury goods and technology services such as direct-to-home TV and mobile apps,” the analysis said. Another area in which India will make great progress is connectivity, with around four billion devices expected to be connected in 2025. The nation’s digital economy will see explosive growth due to the proliferation of devices and the Internet economy will hit $266 billion in 2020, accounting for nearly seven percent of the country’s GDP. “With the Internet boom, online retail will emerge as one of the fastest-growing industries in India, holding a market potential of $ 35.08 billion by 2025,” said Frost & Sullivan’s Visionary Innovation Group Team Leader, Archana Devi Vidyasekar. “This will compel many retailers to move from a bricks only model to a bricks and clicks model that amalgamates online channels with brick and mortar stores.”
By the end of this decade, India will also see the development of smart cities as the country has an ambitious plan to upgrade its urban infrastructure. India will need an estimated investment of $216 billion for basic urban infrastructure till 2020, out of which $1.2 billion will be devoted to smart city development. India’s promising growth story could however put pressure on its physical resources such as ground water, which is depleting at a rate of 25 per cent. As per current forecasts, the nation could face water stress with a supply gap of 100 trillion litres by 2025. “Gen Y, the working age population, working women, and the great Indian middle class continue to be the most influential segments of the population triggering new social, technological, and economic trends. With the rise of the she-conomy, India will witness 40 percent women in working age population in 2020 and this will definitely be an important force for positive change in the years to come,” said Vidyasekar. The study provides an insight into the key Mega Trends that will impact and shape India’s economy and society. Understanding macroeconomic forces is crucial to identify future opportunities and the needs of the customer. For the purpose of this study, Mega Trends are categorized into urbanisation, social, economy, technology, energy, eMobility, infrastructure, business, health and wellness, political shift, new business models and industry-specific trends. This study also highlights projects, companies and technologies that will impact the business ecosystem of the country in the next decade.