Robotics & Automation in a “New” India
The face of a “new” India is clearly visible, yet will it emerge amid steep challenges?
“I give 10 years for labor-intensive manufacturing to survive in its present form before machines take over.”
—Tharman Shanmugaratnam, Chairman, Policy Advisory Committee, International Monetary Fund
Is there a “new” India emerging?
For the first time in over fifty years, India is faced with an unprecedented influx of foreign direct investment (FDI), venture capital inflows, government financing, high-tech startups, and advanced manufacturing and logistics technology.
An era of success seems to be at hand, but can India measure up to the formidable challenges ahead?
The wave west
According to a report from Standard Chartered, China’s wage costs are on the rise, and the center of gravity of low-cost manufacturing looks set to trend west from coastal China, to inland China, to ASEAN, to India, Bangladesh and eventually to Africa.
India needs to catch the wave of low-cost manufacturing before it blows past on its way west. Africa beckons from across the Indian Ocean.
In the end, the reality is that all low-cost manufacturing worldwide seems to be a time-limited activity that may well disappear faster than anyone ever expected. But for the moment, it is here with us, its huge, it employs countless millions, and it’s on the move.
Next stop: India?
The hunt for cheap, temporary labor is arriving.
Already, places like Sri City, an industrial park in India’s southern state of Andhra Pradesh, are seeing a rapid incursion of Chinese companies: Lenovo, Gionee, Vivo and Xiaomi have each put up production facilities in India over the last year. Another, Xi’an LONGi, will invest $225 million to set up a facility to make solar cells and components.
Terry Gou’s Foxconn has met with Maharashtra Chief Minister Devendra Fadnavis about building a cell phone manufacturing facility for 50,000 workers on 1,200 acres in Maharashtra. Apple is also bringing manufacturing to India, having met with the government of Karnataka to set up a plant in Bengaluru.
The strategy behind the build out of different types of manufacturing seems to be following a path relative to the per capita income of India’s labor force (red notations in map below).
“There’s the threat of India losing out,” reports Madhur Jha, senior economist at Standard Chartered: “Other countries are slightly more developed, have a stronger manufacturing base, and are moving toward automation more quickly to keep themselves competitive.”
Just how fast is automation moving? Well, hard to believe but true, robots have barely penetrated India and China relative to the size of their labor forces, yet is pushing low-cost manufacturing almost completely out of East Asia in under a decade.
In fact, a decade more is all that Tharman Shanmugaratnam, chairman of the International Monetary Fund’s policy advisory committee, gives a fast-closing window for India to catch up with rich countries or miss the boat.
“Time is not on India’s side,” said Shanmugaratnam at a government conference. “I give 10 years for labor-intensive manufacturing to survive in its present form before machines take over.”
With the Modi government needing five million new manufacturing jobs annually to keep pace with a growing population, Shanmugaratnam’s forecast is a punch in the gut.
But is it a well-deserved punch? Better yet, can India counter the blow?
For the time being, with its GDP growing at 7.7 percent India, can boast of the world’s fast-growing economy. However, as the world has already witnessed with China’s decade of 7-plus growth, there’s more to a prosperous future than gaudy GDP stats.
- Will there ever be enough low-cost manufacturing jobs to go around? A report by the JustJobs Network labor research institute says no: “The working-age population is increasing far faster than the number of jobs in the formal sector: roughly 1 million a month versus 1 million a year.
- Dead-end education. According to the United Nations: “The average Indian adult has been schooled for only 4.4 years, the worst among Asia’s major developing economies.”
- What about college grads? The Aspiring Minds skills-assessment group concluded in its report, National Employability Report, Engineers – Annual Report, 2016: “Half of the 5 million [college seniors] graduating annually with bachelor’s degrees are unemployable because of poor cognitive and language skills.”
- India’s productivity: The Boston Consulting Group concluded bluntly in India: Growth & Jobs in the New Globalization: Productivity of Indian factories is the worst among major economies. See related: Quality vs. Chalta Hai.
- And the workforce kicker: India’s economy and social structure is saddled with 287 million illiterate citizens. By far the world’s largest! Amounting to 37 percent of the global total.
Upswells of hope
- White-hot economy: The United Nations forecasts India’s GDP to grow 7.7 percent in 2017 and 7.6 percent in 2018. China is at 6.6, down from 7.5!
- Opportunity exists: Low-cost manufacturing is arriving in a big way. The Deloitte survey, a Global Manufacturing Competitiveness Index (GMCI 2016), pegs India to become the “New China” in terms of low-cost manufacturing country in the next five years.
- Foreign interest: From $44 billion in foreign direct investment (FDI) in 2015 to north of $60 billion in 2016, India is the darling of offshore interest. Lots of new people are arriving with the idea to make lots of money. Can India oblige?
- High-tech hotbed: NASSCOM ranks India as 3rd largest startup ecosystem with more than a 100 accelerators, 200 active angels, 150 VCs and over 4,200 startups.
- Robot “density” is non-existent: According to euRobotics, manufacturing in India has but 2 robots per 10,000 employees; automotive industry sees only 58 per 10,000 employees. Astounding numbers for a country of 1.3 billion people!
- Dr Hongwei Zhang from the Department of Engineering and Mathematics, Sheffield Hallam University, South Yorkshire, England, believes that “automation and robotics are catching on rapidly…In India, it’s happening at a faster rate, he said. Globally, the use of robots is growing at the rate of 6.73 percent per annum. In India, it has been growing around 12 percent cent, he added.”
- With millions of India’s SMEs forecast to be a $25.8 billion market for emerging technologies by 2020, according to the Economic Times of India, robot automation, especially purchases of simple-to-use, fast-ROI cobots, should skyrocket.
Greatest resource: Educating future roboticists
Enclaves around which robotics can grow and flourish and spin off robotics companies traditionally occur in geographic zones where superior education grows and flourishes. Think, Stanford, Berkeley, Carnegie-Mellon, MIT/Harvard, Georgia Tech in the U.S.
Where are India’s zones of excellence? Asian Robotics Review sought out a solid pair of boots on the ground to offer up a glimpse. Aiding in the quest was Debashis Das, founder and CEO of Bharati Robotics (Pune). Well-known, respected and deep into India’s robotics ecosystem and industry, Debashis sat for a Q&A on the centers of excellence and their outlook going forward.
When asked about India’s “enclaves” of great robotics education, he rattled off the following (see map lower left below):
- BITS (Birla Institute of Technology and Science), Pilani
- IISC (Indian Institute of Science), Bangalore
- IIT (Indian Institute of Technology) Bombay, Madras, Delhi, Kanpur, Kharagpur,
- Nirma Institute of Technology, Ahmedabad
- PSG College of Technology, Coimbatore
- VJTI (Veermata Jijabai Technological Institute), Mumbai
- Professional course in robotics engineering available.
- Knowledgeable technical staff to support and guide students, many of who have done MS in major universities in US.
- Colleges have very good Industry connections to develop practical solutions
- Robotics lab facilities have advanced equipment
- Colleges have funds to promote robotics by competitions, seminars, paper presentations, research
- They host very good quality national- and international-level robotics competitions which encourage students to get into robotics field.