India is picking up economic growth
Both IMF and OECD project India's economic growth to pick up and continue strong in near future. This places India as world fourth largest economy by GDP at PPP (8th at nominal GDP).
In the group of BRICS countries (Emerging economies) India is 2nd largest:
Facing enormous challenges
Despite being a large economy India remains poor when measured by GDP per capita, ranking 125/187 (IMF, 2014) with only 5,808 USD(PPP)/CAP (1,627 USD nominal, PPP = Purchasing power parity) (World average at PPP 10,288 and USA 54,370 USD/CAP).
India has one of world largest cities, Delhi (4th as city proper, 5th as metropol area), but last census India (2011) availabe sets this all in perspective:
Facing challenges India's intangible capital NIC potential is leveling out
Performing strongly in building up NIC potentials (measured by NIC index values) 2001 - 2010/11 a clear stagnation in this postitive development can be detected, starting 2010/11:
This development also puts India in the bottom league within BRICS countries, when it comes to the build up of NIC potential for future growth of NIC impacts boosting GDP:
NIC impacts in India's GDP formation has grown steadily ...
Build up of India's NIC 2001 - 2010/11 has impacted GDP positively through out last decades:
But all this may soon change, as NIC impacts always comes with time lags:
Looking from this point of view: India has benefited from past NIC build up, but if build up don't catch up and continue this resource is at risk. The time lag of 3-4 years is coming to its end.
Focusing on details: To strenghten NIC potentials for future NIC impacts in GDP formation and growth India need to focus primarily on human and process capital.
Summary:
- NIC positive development 2001 - 2010/11 has leveled out and this sets India's potentials for future NIC impacts in GDP formation and growth at risk. To prevent negative effects, India need to refocus on NIC and systematically continue building its NIC potentials and in so doing focus on human and process capital.
This is a developing story: Next update 12:00 CET 08/03/2016.
Stay tuned!
Any questions? Mail a NIC team member or mail your question to: nic research.
NOTE:
Till official release and publication of NIC 2016 Report in April (2016) we elaborate only NIC 2001-2013/14 public data based analysis and results, i.e. data available to all. Customers find latest NIC 2016 data and analysis results on login area. However: Elaborations and results presented here are tried to be in line with results you will find in the NIC 2016 Report and database.
Gender equality as economic driver - and human right
Recap:
- NIC positive development 2001 - 2010/11 has leveled out and this sets India's potentials for future NIC impacts in GDP formation and growth at risk. To prevent negative effects, India need to refocus on NIC and systematically continue building its NIC potentials and in so doing focus on human and process capital.
Two gigants handling gender equality
India:
China:
Gender equality is not only a basic civilized value: It is extremely good business.
Impacts of Gender Equality in GDP formation is significant, or, as IMF (WP/16/16) puts it: gender-targeted policies increase female labor force participation and GDP in both the short run and long run.
But gender equality in India is yet a major challenge. Here female/male ratios with respect to labor:
Source: Macroeconomic Impacts of Gender Inequality and Informality in India, IMF working paper 2016, WP/16/16.
And further:
Impacts of Gender Equality - as a genuine "inexpensive" cultural attitude and value - is also extremely cost efficient, when at place and active:
Building this "almost free of charge" potential?
Development for two "gigants" in building up the potential for future free gains of equality:
The simple, but neccessary step for India here is to strongly focus on education, building up its human capital potential:
Education: "the policy that increases female education, which by increasing female workers’ efficiency at work, leads to higher formal employment of females. In addition, this increase in female efficiency leads to an expansion of the formal sector engendering an increase in both female and male formal employment." (IMF, WP/16/16)
Summary:
- NIC positive development 2001 - 2010/11 has leveled out and this sets India's potentials for future NIC impacts in GDP formation and growth at risk. To prevent negative effects, India need to refocus on NIC and systematically continue building its NIC potentials and in so doing focus on human and process capital.
- On woman's day 2016: India has huge potentials in promoting e.g. gender equality and linked socio-cultural attitudes and values. These attitudes and values are strong and cost effective economic drivers. Focusing on these should be one of India's prime strategies in reshaping its socio-economic struture and making a transition from low income towards middle income social and economic structures. The one can not be achieved without the other!
This is a developing story: Next update 12:00 CET 09/03/2016.
Stay tuned!
Any questions? Mail a NIC team member or mail your question to: nic research.
NOTE:
Till official release and publication of NIC 2016 Report in April (2016) we elaborate only NIC 2001-2013/14 public data based analysis and results, i.e. data available to all. Customers find latest NIC 2016 data and analysis results on login area. However: Elaborations and results presented here are tried to be in line with results you will find in the NIC 2016 Report and database.
SWOT
Recap:
- NIC positive development 2001 - 2010/11 has leveled out and this sets India's potentials for future NIC impacts in GDP formation and growth at risk. To prevent negative effects, India need to refocus on NIC and systematically continue building its NIC potentials and in so doing focus on human and process capital.
- On woman's day 2016: India has huge potentials in promoting e.g. gender equality and linked socio-cultural attitudes and values. These attitudes and values are strong and cost effective economic drivers. Focusing on these should be one of India's prime strategies in reshaping its socio-economic struture and making a transition from low income towards middle income social and economic structures. The one can not be achieved without the other!
Calculating strenghts and weaknesses we take the following steps: For each driver (indicator) we calculate
- Distance to group average, i.e. D1 = value - average(group) with a weight = 1. Motivation: Internal weaknesses and strenghts need to acknowledge intrinsic differences between different NIC capital groups.
- Distance to world average for driver, i.e. D2 = value - average(world) with a weight = 2. Motivation: Internal weakness / strenght does not automatically imply that this is true when compared to world averages.
- Distance to NIC trade value, i.e. D3 = value - NIC trade value with a weight = 3. Motivation: Strenghts and weaknesses need to be measured in the economic realm of production and trade as country specific.
- Weighted distance, i.e. WD =(D1*1 + D2*2 + D3*3)/6
Weights are here chosen to reflect what matters: What matters more than just high values (in group) is that the value is competitive (vs world) and generates economic activity (competitive trade).
We believe this is a more true picture of how strenghts in national intangible capital is distributed. Still, we ask once more:
When looking for strenghts and weaknesses: are drivers potential (index values), impact (as percentage shares in GDP formation and growth) and efficiency (as output/input ratio for impacts) equally important?
One can argue that they are equally important and should be given equal weights and analysed separately. This is OK and is certainly done. However, if we seek a compact list of weaknesses and strenghts combining potential, impact and efficiency (dynamically) we could give impact greatest weight followed by efficiency and potential. The rationale is that focusing on improving any (weak) driver will innevitably also strenghten its efficiency and its potential, but benefits in impacts will be fastest and strongest when initially impact has highest selective power.
Giving impact, efficiency and potential weights 3, 2 and 1 (and calculating Doubble Weighted Distance DWD) we can picture how strenghts and weaknesses is distributed over the various NIC capitals in India:
India's strenghts: Market capital, but no strenghts in process capital!
Keeping in mind India should focus primarily on developing NIC human and process capital strenghts this picture reveals a true weakness: Process capital = No strenghts at all.
India's weaknesses: Worryingly process capital
Strenghts and weaknesses?
Looking broader on strenghts and weakness for India we also here can detect a false (miss placed) priority:
Renewal capital. Renewal capital is not (yet) on the "national" - country wide - developmental path "agenda".
Focus should be - strictly and strongly - on human and process capital & weaknesses in renewal capital are "pre-mature" (a market capital remnant type "cheap India R&D"). Strenghts in national renewal capital is based on strenghts in national process (and human) capital, now lacking almost totally!
Summary:
- NIC positive development 2001 - 2010/11 has leveled out and this sets India's potentials for future NIC impacts in GDP formation and growth at risk. To prevent negative effects, India need to refocus on NIC and systematically continue building its NIC potentials and in so doing focus on human and process capital.
- On woman's day 2016: India has huge potentials in promoting e.g. gender equality and linked socio-cultural attitudes and values. These attitudes and values are strong and cost effective economic drivers. Focusing on these should be one of India's prime strategies in reshaping its socio-economic struture and making a transition from low income towards middle income social and economic structures. The one can not be achieved without the other!
- Build the country intangible capitals, NIC, don't spotlight only GDP. Focusing on market capital benefits via cheap labor, gender inequality based profits and tax based benefits need to come to an end. Focus need to shift to building genuine process capital elements: infrastructure, attitudes and values and social inclusion at large.
This is a developing story: Next update 12:00 CET 10/03/2016.
We next pin point essential drivers for future growth of welfare and prosperity for India and its people.
Stay tuned!
Any questions? Mail a NIC team member or mail your question to: nic research.
NOTE:
Till official release and publication of NIC 2016 Report in April (2016) we elaborate only NIC 2001-2013/14 public data based analysis and results, i.e. data available to all. Customers find latest NIC 2016 data and analysis results on login area. However: Elaborations and results presented here are tried to be in line with results you will find in the NIC 2016 Report and database.
India's strenghts just emerging
Recap:
- NIC positive development 2001 - 2010/11 has leveled out and this sets India's potentials for future NIC impacts in GDP formation and growth at risk. To prevent negative effects, India need to refocus on NIC and systematically continue building its NIC potentials and in so doing focus on human and process capital.
- On woman's day 2016: India has huge potentials in promoting e.g. gender equality and linked socio-cultural attitudes and values. These attitudes and values are strong and cost effective economic drivers. Focusing on these should be one of India's prime strategies in reshaping its socio-economic struture and making a transition from low income towards middle income social and economic structures. The one can not be achieved without the other!
- Build the country intangible capitals, NIC, don't spotlight only GDP. Focusing on market capital benefits via cheap labor, gender inequality based profits and tax based benefits need to come to an end. Focus need to shift to building genuine process capital elements: infrastructure, attitudes and values and social inclusion at large.
India strenghts are just emerging and disengaging from market capital strenghts
India's present strenghts are embedded in market capital. Practically this means: Embedded in exploatation of tax benefits and cheap labor. Keeping in mind that focus should be on human and process capital the total lack of process capital strenghts is alarming.
Emerging strenghts within human capital is ecouraging, but: "Avalability of skilled labor and qualified enginees" (in excess) imply in revers: there is a shortage of formal and demanding jobs (as a result of weak process capital).
However: Emphasis should be on building input strenghts, basic strenghts, which is not yet the case.
Just picking three strongest drivers from each category don't change this picture: Lack of strong inputs building potentials for future and sustained domestic driven growth is mainly missing, considering they should dominate the picture:
Process capital dominate weaknesses
Lack of major weaknesses in area of human capital is encouraging, but HDI being the weakest is worrying: HDI = Human Development Index development should be a priority!
And once more: Input weaknesses are over represented:
Just picking three weakest strenghtens the picture:
Inputs are over represented and also: Basic weaknesses are exposed to be very harmfully gender equality and corruption.
India and NIC Tipping points
We define a NIC Tipping point as a point on a time line (future) where NIC impacts in GDP formation and growth ceases to grow, i.e. NIC impact stagnates on a certain level.
In order to estimate the existance of a tipping point (in near or far future) we calculate a NIC TP value for each driver (indicator) = annual projected increment on impact in GDP. This is performed by analysing near past and far past behavior of the driver (i.e. we perform trend analysis of drivers impact). As in SWOT analysis we acknowledge intrinsic, NIC trade value and global development related impact factors for each driver.
Schematically a positive TP value granting growth looks like this:
As you notice the projection is then calculated using best performer as a target / optimal value for impact (strenghtend by 10 %). All values are calcualted on a year to year basis starting 2001. Schematically a negative TP value causing negative growth (declining impacts) looks like this:
Finally we add together (aggregate) the net cumulating effect(s) of all drivers and come to a NIC Tipping point projection for each country.
The good news for India:
Impacts of national intangible capital NIC will grow steadily throughout the decade.
Summary:
- NIC positive development 2001 - 2010/11 has leveled out and this sets India's potentials for future NIC impacts in GDP formation and growth at risk. To prevent negative effects, India need to refocus on NIC and systematically continue building its NIC potentials and in so doing focus on human and process capital.
- On woman's day 2016: India has huge potentials in promoting e.g. gender equality and linked socio-cultural attitudes and values. These attitudes and values are strong and cost effective economic drivers. Focusing on these should be one of India's prime strategies in reshaping its socio-economic struture and making a transition from low income towards middle income social and economic structures. The one can not be achieved without the other!
- Build the country intangible capitals, NIC, don't spotlight only GDP. Focusing on market capital benefits via cheap labor, gender inequality based profits and tax based benefits need to come to an end. Focus need to shift to building genuine process capital elements: infrastructure, attitudes and values and social inclusion at large.
- Focusing on process capital input drivers together with input drivers in general and human capital drivers strenghtening constructive and positive socio-cultural attitudes and values need to be prioritized.
This is a developing story: Next update 12:00 CET 11/03/2016.
Stay tuned!
Any questions? Mail a NIC team member or mail your question to: nic research.
NOTE:
Till official release and publication of NIC 2016 Report in April (2016) we elaborate only NIC 2001-2013/14 public data based analysis and results, i.e. data available to all. Customers find latest NIC 2016 data and analysis results on login area. However: Elaborations and results presented here are tried to be in line with results you will find in the NIC 2016 Report and database.
Building potentials for future growth: NIC human and process capital in focus
Recap:
- NIC positive development 2001 - 2010/11 has leveled out and this sets India's potentials for future NIC impacts in GDP formation and growth at risk. To prevent negative effects, India need to refocus on NIC and systematically continue building its NIC potentials and in so doing focus on human and process capital.
- On woman's day 2016: India has huge potentials in promoting e.g. gender equality and linked socio-cultural attitudes and values. These attitudes and values are strong and cost effective economic drivers. Focusing on these should be one of India's prime strategies in reshaping its socio-economic struture and making a transition from low income towards middle income social and economic structures. The one can not be achieved without the other!
- Build the country intangible capitals, NIC, don't spotlight only GDP. Focusing on market capital benefits via cheap labor, gender inequality based profits and tax based benefits need to come to an end. Focus need to shift to building genuine process capital elements: infrastructure, attitudes and values and social inclusion at large.
- Focusing on process capital input drivers together with input drivers in general and human capital drivers strenghtening constructive and positive socio-cultural attitudes and values need to be prioritized.
Build up of needed human and process capital potential strenghts is lagging behind:
Present strenghts of strong market capital efficiency and impacts is slowly deteriorating:
Summary:
- NIC positive development 2001 - 2010/11 has leveled out and this sets India's potentials for future NIC impacts in GDP formation and growth at risk. To prevent negative effects, India need to refocus on NIC and systematically continue building its NIC potentials and in so doing focus on human and process capital.
- On woman's day 2016: India has huge potentials in promoting e.g. gender equality and linked socio-cultural attitudes and values. These attitudes and values are strong and cost effective economic drivers. Focusing on these should be one of India's prime strategies in reshaping its socio-economic struture and making a transition from low income towards middle income social and economic structures. The one can not be achieved without the other!
- Build the country intangible capitals, NIC, don't spotlight only GDP. Focusing on market capital benefits via cheap labor, gender inequality based profits and tax based benefits need to come to an end. Focus need to shift to building genuine process capital elements: infrastructure, attitudes and values and social inclusion at large.
- Focusing on process capital input drivers together with input drivers in general and human capital drivers strenghtening constructive and positive socio-cultural attitudes and values need to be prioritized.
- Present strong NIC market capital efficiency is weakening and this already affect impacts in GDP formation and growth, shifting from strong to medium and weak. Building future potentials for growth, building human and process capital, has major weaknesses which may put (IMF and others) projected (national, domestic, driven) growth for India at risk. To ensure future growth India need to follow up on positive progess in strenghtening human and process capital NIC.
NIC on the week: Next update 12:00 CET 14/03/2016.
Week 11: BREAKING: Is Finland the sick man in Europe as Fitch cuts Finland's credit rating to Aa+? Who's next?
Stay tuned!
Any questions? Mail a NIC team member or mail your question to: nic research.
NOTE:
Till official release and publication of NIC 2016 Report in April (2016) we elaborate only NIC 2001-2013/14 public data based analysis and results, i.e. data available to all. Customers find latest NIC 2016 data and analysis results on login area. However: Elaborations and results presented here are tried to be in line with results you will find in the NIC 2016 Report and database.
Triggering stories
Background:
- Reuters: Fitch cuts Finland's credit rating
- Bloomberg: Finland looses AAA rating
- BBC: Finland: The sick man of Euorope?
- FT: Finnish tradition of consensus at risk
This is a developing story: Next update 12:00 CET 14/03/2016.
Stay tuned!
Any questions? Mail a NIC team member or mail your question to: nic research.
NOTE:
Till official release and publication of NIC 2016 Report in April (2016) we elaborate only NIC 2001-2013/14 public data based analysis and results, i.e. data available to all. Customers find latest NIC 2016 data and analysis results on login area. However: Elaborations and results presented here are tried to be in line with results you will find in the NIC 2016 Report and database.