Developing female leaders at the United Nations

By Dave Pearson - August 17, 2015

Un blogBy their very nature, humanitarian crises are highly dramatic, visible, and distressing events; and effective response requires quick decision-making and strong leadership.

Developing and increasing the effectiveness of those responsible for leading life-saving relief efforts is a key challenge of the United Nations Office for the Coordination of Humanitarian Affairs (UN OCHA). A project recently delivered pro bono as part of the Deloitte Humanitarian Innovation Program with UN OCHA, focused on strengthening the UN’s pipeline of diverse leaders for senior roles in the humanitarian and development sectors. Deloitte Consulting LLP (U.S.), (Deloitte), has lent its support to UN OCHA since 2012, applying its experience in creating talent development programs in the private and public sectors, to those working in these exceptionally challenging environments.

In this latest collaboration, Deloitte contributed to the conceptualization, development, and launch of an interagency talent program for female leaders within the UN system. The program targets high-potential women in seven participating UN agencies to accelerate their readiness for senior leadership roles across the UN system. The program includes a 1-year rotation to roles selected specifically to maximize candidate development, coaching based on individualized development plans, and in-person leadership learning and training led by Deloitte.

This ground-breaking interagency talent program is the UN system’s first attempt ever to build a female leadership pipeline by broadening the exposure of female talent working in UN agencies. It has the potential to shift the leadership landscape of the entire UN system. With the first cohort of women enrolled in the program, it is off to a strong start and is receiving encouraging reports among the agencies involved.

These agencies focus on life-changing issues such as protecting the rights and well-being of refugees, getting food to those in crisis, and the eradication of poverty. While each is effective in its own right, the challenge is developing leaders that can coordinate the capabilities of the agencies working together to accelerate their common goal—responding to essential needs of those in crisis. As more cohorts of women are selected, the intent of UN OCHA is to scale the program in the years ahead.

Read more about how the Deloitte Humanitarian Innovation Program supports humanitarian crises by collaborating with humanitarian organizations to co-create innovative solutions that help improve the sector’s preparedness and readiness to respond to crises here.

 

David-pearsonDavid Pearson is the Chief Sustainability Officer for DTTL. Dave leads innovative programs which demonstrate Deloitte’s commitment to driving societal change and promoting environmental sustainability. Collaborating with government, non-profit organizations, and civil society, the Deloitte network is designing and delivering solutions that contribute to a sustainable and prosperous future for all. Dave has more than 20 years’ experience in both public accounting and private industry. From 2007–2011 he served as CEO of Deloitte CIS, which covers 11 countries in the former Soviet Union.

Landscape evolving for global chemicals industry

By Tim Hanley - February 27, 2015

Chemicals-landscape-blogDeloitte Global was proud to host its 10th Global Chemical Think Tank recently in Dusseldorf, Germany. The event brings together Deloitte member firm clients and Deloitte professionals from around the world to engage in forward thinking discussions on key trends and issues impacting the global chemicals industry. While several topics were featured on the agenda, let me highlight three topics which resonated with me. 

First, the chemicals industry landscape is continuing to evolve with companies that are better focused on providing solutions to emerging customer needs to become more globally competitive. In an industry which over the last decade has grown on average on par with gross domestic product (GDP), breakthrough performance will demand the ability to harness new exponential technologies and adapt business models to drive innovation and exceptional growth. This is an inflection point for the industry, which is poised for new developments in areas such as advanced materials, material-based systems manufacturing, and digital design. To cope with these opportunities and challenges, companies will likely need to deploy innovative talent strategies to have the right skills needed to drive the business forward as the industry competes in the digital age.

Secondly, the feedstock environment is changing, both with the volatility of oil prices, as well as with the potential for next generation bio-based feedstock becoming more important in the future. While lower oil prices continue to steal the headlines, there appears to be growing investments and collaborative innovation in bio-based feedstock as a sustainable energy alternative. Given the multifaceted dimensions of the feedstock prism, companies will likely turn to advanced analytics as a competitive tool to find the right feedstock strategy for their business. The recent steep decline in oil prices, which impacts the pricing of naphtha, will likely create short term opportunities and challenges, depending on the feedstock source for companies. While this decline may not be lasting, it is a development being closely monitored.

Finally, mergers and acquisitions (M&A) will likely continue to be robust in the global chemicals sector. In 2015, the U.S. is expected to continue to be of interest, driven by anticipated moves by chemical companies to realign their portfolio as well as by strategic investments to position as the shale gas opportunity gradually unlocks. Further, commodity deals are likely to lead the pack, but specialty deals is expected to rebound to 2012 levels. Among the challenges that could hamper M&A activity in the sector include debt availability in certain geographies, competition and regulations changes, use of spin-offs rather than divestitures to executive portfolio realignment, and a significant global conflict.  Read more in Deloitte's recently released 2015 Global chemical industry mergers and acquisitions outlook.

Some of the topics I share in this article highlight the dynamic opportunities that lie ahead for all manufacturers – not only in the chemical industry. Over the next few months I hope to continue to offer perspectives on different sectors and issues.

 


 

Tim HanleyTim Hanley is the Global Leader of the Manufacturing Industry group of Deloitte Touche Tohmatsu Limited (DTTL). In his global industry leadership role, he directs strategic initiatives and investments to grow Deloitte member firm market share within the manufacturing industry. During his distinguished 35-year career, Hanley has led teams serving all business aspects, including consulting with top management regarding organizational financial strategy development and execution, acquisitions, and market development.

Mobility preferences of Gen Y in Europe and China

By Tim Hanley - December 03, 2014

Bzi_cho_glb_ho_2083_300X200During the last few months, Deloitte has been sharing insights on mobility trends from a 2014 Global Automotive Consumer Study of more than 23,000 consumers across 19 countries. Two prominent automotive industry events held in France and China recently offered a backdrop to provide a view of the changing mobility needs for Generation Y consumers (Gen Y or Millennials) – those born between 1977 and 1994 – across Europe and also in China.

More than 1.2 million people visited the Mondail de l'Automobile Paris Automotive Show in October to discover the latest trends that automotive companies are integrating into their designs. During this major international automotive show, Deloitte released the 2014 Global Automotive Consumer Study: Exploring European consumer mobility choices report, which draws automakers’ attention to the mobility needs and buying behavior of Gen Y consumers - a group estimated to reach 106 million in Europe by 2020. The analysis examines the preferences of more than 2,800 Gen Y individuals living in eight European markets including Belgium, Czech Republic, France, Italy, Germany, Netherlands, Turkey, and the United Kingdom.  

Interestingly, the European report suggests that approximately 25 percent of Gen Y consumers across the region do not plan to buy or lease a vehicle before 2019. Instead, these young consumers are opting for modes of transportation such as public transit, taxis, rental agencies, and walking, all of which they believe offer more convenience at a lower total cost than owning a personal car. In addition, the study found that cost, fuel efficiency, and affordability of payment options are the top three drivers encouraging a European Millennial's decision to buy or lease a vehicle today. Over 70 percent of European Gen Y said that cost and quality of the service bundle, such as free routine maintenance, also influences their purchase decision.

Around the Paris autoshow, Deloitte held a Gen Y automotive event featuring students from three leading French business schools, Dauphine, Centrale, and Essec universities. Special thanks to the students for highlighting the Deloitte findings to present their viewpoint to industry executives and the media on themes important to Millennials in France.

Senior executives travelled from all corners of the globe to Wuhan, China in October for the Global Automotive Forum. Deloitte was proud to once again be a major sponsor of the premier event. As the largest automotive industry in the world, it is not surprising that automakers are keen to keep a pulse on the trends in China and the mobility needs of an estimated 240 million Gen Y consumers1 in that market.  

Deloitte’s study reveals that over 90 percent of Gen Y consumers in China are interested in buying or leasing cars in the next five years. For these consumers, major considerations in their decision making include affordable prices, convenient and inexpensive parking options, and cost-effectiveness of running a car. Vehicle safety technology as well as innovative consumer experience and service were also cited among the factors important in their decision-making. However, with other modes of mobility available in China and the relatively high cost of a private vehicle, automakers are competing to secure a share of the wallet of this important consumer segment. While interest in vehicle ownership or leasing is high with Chinese Millennials, getting them to actually buy or lease is a challenge. Sixty percent surveyed indicated that they would still rather take the bus, train or taxi to travel, because they like to do other things during the journey. In addition, 69 percent of Gen Y respondents in China mentioned that they are willing to move to live close to their workplace to reduce the round-trip time from work.

These are just some of the findings from the 2014 Deloitte Global Automotive Consumer Study. You can read more or view a video highlighting the global results by visiting the Deloitte website.


1Bloomberg and Business Week. Reckoning with Chinese Gen Y. 25 January 2010.


Tim HanleyTim Hanley is the Global Leader of the Manufacturing Industry group of Deloitte Touche Tohmatsu Limited (DTTL). In his global industry leadership role, he directs strategic initiatives and investments to grow Deloitte member firm market share within the manufacturing industry. During his distinguished 35-year career, Hanley has led teams serving all business aspects, including consulting with top management regarding organizational financial strategy development and execution, acquisitions, and market development.

G20: Insights from the Social Progress Index 2014

By Andrew Johnstone-Burt - November 25, 2014

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The G20 provides a valuable opportunity for leaders to discuss a wide range of global economic issues and to use their collective power to make a difference. The G20’s immediate task is breaking the cycle of low growth, including diminished business and consumer confidence.

A common observation we have is that governments are at, or close to, the limits of macroeconomic policy responses. We observe now there exists a challenge for governments they need to think beyond the usual macroeconomic levers to support social progress. I believe growth on its own without social progress is an empty goal.

In the past we have seen that traditional approaches to solving society’s most complex and challenging social problems have are not been sustainable. These complex problems take time to come to fruition, therefore we need to apply fresh thinking and to act with a sense of urgency.

There is a growing recognition of the need to measure progress over and above GDP to understand the sustained impact of any growth strategies. A more holistic framework of progress measures is needed. Deloitte is working with the Social Progress Imperative, a non–profit which is driving the global debate on measuring what matters most to advance progress through their Social Progress Index (SPI). Designed to complement GDP, and other economic indicators, this new index measures a country’s social and environmental strengths and weaknesses to help prioritise investment decisions.

By examining the SPI indicators and comparing G20 countries we demonstrate the ways in which the SPI can be used to unlock opportunities for true growth in Australia and examples of how these opportunities could be solved through the solution economy. Of the 40 G20 countries the Netherlands, Sweden and Canada ranked the highest in terms of social progress, among G20 countries Australia ranked 6th on the SPI.

Australia’s key social challenges identified through the SPI, when compared to other G20 countries including:

  • Affordable housing: in Australia housing affordability has continued to decline. 862,000 lower income households were experiencing housing stress, comprising 15.8 per cent of all Australian households and 28.2 per cent of low income households in 2002–035. In addition 105,237 people in Australia were homelessness in 2011.
  • Adult literacy: even though Australia does well on the high level measure, there are problematic trends below the surface. In 2011–12 around 3.7% (620,000) of Australians aged 15 to 74 years had literacy skills estimated at below Level 1, with a further 10% (1.7 million) at Level 1 and 30% (5.0 million) at Level 2 (noting that the assessment scale ranges between below Level 1 – the lowest rating – and Level 5).
  • Obesity: the growing trend in overweight and obesity is reflected in Australia. Between 2007–08 and 2011–12, the rate of adult overweight and obesity significantly increased nationally to nearly two thirds (from 61.1% to 63.2%). Children are also affected with a quarter (25.3%) of children (aged 5–17 years) being overweight or obese in 2011–12, (17.7% overweight and 7.6% obese).

I am excited to deliver some  good news: governments, non-government organisations, individual investors and the private sector have been moving towards the solution economy. This will provide new ideas and solutions to social problems, improved communication and collaboration to break down historical silos and unlock true growth. There is a real opportunity to bring new approaches and perspectives to solving society’s most complex challenges, to take an outcomes based focus and collaborate to deliver improved outcomes. If we are to realise the benefit of solving these issues we need to act swiftly and united.


Au-andrew-johnstone-burt-1x1Andrew Johnstone-Burt is the national leader of Deloitte Australia's public sector group. He has a range of specialist skills across policy reform and fiscal sustainability in the public sector in Australia, United Kingdom, and Europe. Along with 10 years’ military service, Andrew has more than 20 years’ advisory experience in strategy, people, change and ICT. He is regarded as a trusted adviser for a number of Australian federal and state government departments.

India’s rebound: will the world be patient?

By Gary Coleman - November 11, 2014

India report_image7At the World Economic Forum’s India Economic Summit this past week, the new Modi government was under particular scrutiny. But as the event concluded, it was clear that most participants were bullish about India given the actions that the government is proposing—with a note of caution, though. With the government now six months in, reforms seem to be slow in coming—and that could be a problem.

The thing is, there’s a lot to be done in order to meet the potential the world is seeing in India right now. A major challenge is the employability of the Indian working population. With one million workers set to enter the job market every month as India’s under-25 population comes of working age,  creating jobs is paramount. But India, like much of the world, is experiencing a talent paradox: 60 percent of India’s total population is available for work, but only 25 percent is capable of being used by the market. How to address this issue was the topic of a session I moderated last week at the summit. Of the many solutions put forward, several proposals the Modi government is seeking to implement were discussed and applauded.

But employability is just a start—to create jobs India must improve its competitiveness overall. With the right policies in place, employability and skills can straightforwardly be improved. But items like infrastructure are long-term investments and are critical to moving raw materials and resources as well as bringing in the FDI needed to boost manufacturing. According to Deloitte Global’s report, Competitiveness: Catching the next wave in India, clearing up bottle-necks in construction projects—some of which the Modi government has already taken action on—will be critical to improving growth.

Creating a pro-business environment will also play a role. India dropped in the World Bank’s latest Doing Business Index, released two weeks’ ago, slipping to 142—the lowest among the BRICS.  While this is a lagging indicator and will most likely improve next year, regulation, taxes, and labor laws all need reforming if “doing business” in India is to improve. The most competitive countries in the world, according to the 2014 WEF Competiveness Index—Singapore, Switzerland, and the United States—all rank in the top 20 on the World Bank index. With that in mind, Modi has vowed to move India into the top 50 of the index.

With promises like this, Modi is clearly putting the world on notice that India is getting ready to take its place as a leading economy. And if the WEF summit last week is any indication, the world is eager to be a part of that journey. But as one speaker at the event’s closing plenary commented, there won’t be a big bang in India; rather reform will come in increments. The question is, will the world wait?


Dttl_garycoleman_56x56Gary Coleman is Managing Director, Global Industries, of Deloitte Touche Tohmatsu Limited. He is a member of Deloitte’s Global Markets Committee and is the lead partner in Deloitte’s strategic relationship with the World Economic Forum. Follow him on Twitter @gcoleman_gary.

Dynamic times ahead for the North American steel industry

By Nick Sowar - November 10, 2014

Steel Blog nd_man_glb_ho_2078When I meet with Deloitte member firm clients around the world, I often get asked about the state of the steel industry in North America. From my perspective, I have never witnessed such dynamic times in the history of the global industry, and North America is currently one of the hotspots of change.

There are three important trends leading the way and driving these paramount times in the industry. First, there appears to be a pick-up in mergers and acquisition activity in North America this year as steel producers execute much needed consolidation strategies. In the first nine months of 2014, there were 66 deals reported (up 20 percent in volume from last year) with a total transaction value of US$8.9 billion. A significant recently-completed deal was the sale by ArcelorMittal and Gerdau of their respective 50 percent interests in Gallatin Steel Company ("Gallatin") to Nucor Corporation. For Nucor, the strategic acquisition expands the company’s position serving flat-rolled customers in the growing pipe and tube segment.

Second, there is a continued focus on operational improvements, reducing structural costs, and improving financial performance. For example, U.S. Steel is implementing a strategic focus it calls “The Carnegie Way” to create value, strengthen its balance sheet, and improve core business process capabilities, including supply chain, manufacturing, and procurement. The company is also seeking to be leaner and recently announced the closure of some production facilities in both the U.S. and Canada.

The third trend is focused on capital raising. Russian producer, Evraz has filed a registration statement to raise capital through an initial public offering (IPO) of ordinal shares in its North American operations. The funds will help the company acquire assets in the region, as well as help to pay down debt.

As we approach 2015, steel demand growth in North America is likely to decrease to around 2 percent from stronger levels in 2014. In markets such as the U.S. and Mexico, apparent steel use is forecasted to increase by 6.7 percent and 6.9 percent respectively this year but plateau to a 1.9 percent and 3.5 percent growth in 2015.  Where will the demand come from? Senior leaders attending the 2014 Steel Success Strategies Conference in New York in June indicated that the oil and gas industry and the automotive sector are expected to be the leading drivers of medium-term growth in North America. I was fortunate enough to attend this event and hear top global metals industry executives discuss the demand realities.

Regional production, however, is not keeping up with demand, attracting imports of steel products to fill the gap. Crude steel production in North America increased by 2.3 percent in the first nine months of 2014 with volumes at 91 million tonnes, representing just over 7 percent of global production. Recently released data indicates that imports of steel products in markets like the U.S. have increased by 35 percent through to August 2014 with more imports coming from Russia, Korea, and China. Furthermore, excess global steel capacity (anywhere from 300 million to 500 million tonnes) will likely continue into 2015 and will put significant downward pressure on steel prices into 2015. Iron ore prices fell to a five-year low in September 2014 by 40 percent to around US$80 per tonne and likely contributed to lower prices in scrap and direct-reduced iron (DRI). Moreover, it is unlikely that overcapacity will be significantly reduced in the short-term in places such as China, where most of the excess capacity is located. Countries with overcapacity will likely continue to look for export markets. Contentious unfair trade complaints around the world will likely be ongoing if the practice of dumping of government-subsidized steel persists.

Sustainable profitable growth and competitiveness of the steel industry will be underscored by the industry’s ability to capture the innovation opportunities from disruptive technologies to meet evolving customer needs. Specifically in advanced manufacturing both from improvements in technologies and materials advancements. Innovation efforts by the steel industry are not often in the spotlight, but many initiatives are yielding new solutions that warrant attention. For example, ArcelorMittal’s spreader beam innovation created the world’s only automated variable-width spreader beam which adjusts to accommodate both scrap bucket and hot metal ladle widths in the electric arc furnace. The award-winning solution provides speed and efficiency in switching between scrap and hot metal charging. The automation took a seven-minute changeover down to 50 seconds, adding the potential for an extra heat of steel per day at the facility. 

Another example is in the automotive sector. Steel has advantages over other competing materials including variables associated with cost, strength, and durability. Within the 2015 Honda Fit, weight reductions were achieved in a number of ways including the extensive use of super-high-tensile strength steel that provides increased structural strength with less material. With 27 percent of the body structure made with these high-grade steels – the vehicle body is 44 pounds lighter than the previous model – fuel-efficiency performance was also improved.

For North American steel companies, energy developments around shale gas also offers longer-term prospects to enhance global competitiveness. However, to the advantage of North American countries like the U.S. over the next one to three years, shale gas will continue to be a largely regional resource with only a limited impact on global markets. Although other countries would likely want to replicate the North American shale gas revolution, they must overcome more challenging geology, and gaps in technology, infrastructure, and domestic service capability before commercial production can begin, as well as political and environmental obstacles in some jurisdictions.

In my several decades of involvement with the global steel industry, I can say that this is truly a monumental time for the steel industry filled with disruptive challenges yet also high-potential opportunities. After the sector weathered years of battered performance from the effects of the global economic downturn, steelmakers have struggled to recover and are more than ever resilient. North America is a region to watch as changing customer demands and energy developments will accelerate innovation within the industry as it strives to remain competitive.

Sources: Thomson Reuters. Nucor, Press release. United States Steel 2013 Annual report. Pittsburgh Post-Gazette. CBC. Evraz. Press release. World Steel Association. American Metals Market, Steel Success Strategies infographic. The United States Census Bureau. Bloomberg. Deloitte Global Energy Resources.


Nicksowar_56x56Nicholas (Nick) Sowar is the Deloitte Global Metals Sector Leader. He has over 37 years of experience with Deloitte, including over 30 years serving leading steel companies worldwide. Nick currently serves as the global lead client service partner or industry advisory partner for several Deloitte member firm global steel clients.

Mexico: A place for investment

By Tim Hanley - October 17, 2014

Ind_man_glb_ho_2071_300 X 200I had a very interesting week in Mexico recently and met with some of Deloitte Mexico’s manufacturing clients in Mexico City and Monterrey. One of my significant impressions from the visit was the visible amount of investment that is occurring by multinationals in this increasingly promising economy, which is often outshined by talks of the BRIC markets. As you read this article, I hope to share some of the interesting facts I learned about Mexico that explains why it is currently such an attractive place for investment.

Mexico reportedly drew a record $35.2 billion in foreign direct investment (FDI) last year. Not surprisingly, the automotive sector is a magnet for investment with automakers (and their suppliers) including Kia, Nissan, Honda, Volkswagen, and Mazda signaling plans to invest in Mexico over the next few years. Many of the major automakers already have a significant presence there. In fact, Mexico is currently ranked 8th among 40 countries by the International Organization of Motor Vehicle Manufacturers (OICA), producing over 3 million vehicles in 2013. What is perhaps a little known fact is that Mexico is the fourth leading car exporter, behind Germany, South Korea, and Japan. An export-orientated economy, the country has more free-trade agreements than any other country, building agreements with 44 countries over the years. The North American Free Trade Agreement (NAFTA), for example, introduced two decades ago in 1994 has helped to pave easier access for Mexican goods into the U.S. and Canada.

Mexico continues to be challenged to stay globally competitive to rival manufacturing nations such as China and Brazil. The automotive sector again, as an example, has been a growing area of capability for Mexico employing some 40 percent of all of the automotive workforce in North America.1 A major factor is the lower labor costs with Mexican autoworkers earning around $8 an hour, according to the Center for Automotive Research, compared with the U.S. average of $37.2

Besides the automotive industry which has flourished, Mexico is also trying to expand its high-tech industrial manufacturing and aerospace manufacturing with multinationals also looking at the country as a manufacturing base. To sustain and indeed evolve its future manufacturing competitiveness, however, Mexico will likely need to look at its talent needs. As cited in Deloitte’s 2013 Global Manufacturing Competitiveness Index report, talent-driven innovation will be the leading driver of global competitiveness. Global CEOs we surveyed ranked Mexico 12th in terms of industry competitiveness and expect that its position may drop slightly to the 13th spot by 2018. To bolster competitiveness, Mexico could seek to improve its capacity for innovation and quality of higher education and training. The country ranks in the middle of the pack in these areas based on the 2014-2015 World Economic Forum Global Competitiveness Report.

Finally, as I was concluding my visit, the Mexican government announced a landmark energy reform. With energy being a significant cost to manufacturers, the announcement caught the attention of multinational companies and other stakeholders worldwide. It will be interesting to watch as things unfold to see if this energy development will help to bolster future interest in Mexico as a place to invest.

Have questions or comments? Share your thoughts with me @TimPHanley.

1New York Times. 18 November 2013.
2Los Angeles Times. 24 February 2014.


Tim HanleyTim Hanley is the Global Leader of the Manufacturing Industry group of Deloitte Touche Tohmatsu Limited (DTTL). In his global industry leadership role, he directs strategic initiatives and investments to grow Deloitte member firm market share within the manufacturing industry. During his distinguished 35-year career, Hanley has led teams serving all business aspects, including consulting with top management regarding organizational financial strategy development and execution, acquisitions, and market development.

Manufacturing, innovation, and the youth of India

By Gary Coleman - October 09, 2014

INDIA VISIT BLOGIn his recent Independence Day speech, India’s Prime Minister Shri Narendra Modi proclaimed that “the youth of India has completely transformed the identity of India in the world.” He appealed to the youth of India to continue this trend—by enhancing their skills, seeking out new business ventures, and striving to achieve his vision of a “Digital India.”

Having visited India only a few days after Modi’s speech, I was intrigued by this idea of the younger generation’s impact on the economy. I was particularly interested in its relation to manufacturing and innovation, two topics that came up repeatedly in my discussions with colleagues at Deloitte India, their clients, and the media. With India seeking to take its place in the world as an innovation and manufacturing hub, this demographic—particularly millennials—will play an increasingly important role. 

According to Modi’s speech, 65 percent of India’s population is under the age of 35 years—the largest number of youths of any country in the world. How this demographic participates in the workforce could be the single most influential factor for India’s economy over the next decade. How these individuals are educated, where they choose to work, and what kind of career path is open to them will impact the trajectory for both manufacturing and innovation in India.

First, building manufacturing is a goal to which India is committed. Modi emphasized in his speech that the world should come and “Make in India.” A formal campaign to support this effort launched across the country last month.1  It is the youth of India who will be expected to occupy these new manufacturing jobs. But, according to estimates from the Confederation of India Industry and the National Skill Development Corporation in India, over 70 million manufacturing jobs in India over the next 15 years could go unfilled due to a skills gap. To cultivate the pipeline of workers needed to support today’s high-end manufacturing, the government must actively invest in education and training now.  

Second, India must invest in building a culture of innovation. With its strong base in IT, India’s strength in this area would seem like a given. But India recently fell 10 notches in the 2014 Global Innovation Index to 76th--the worst performer among the BRICS nations.2 Again, India must look to its youth to help remedy this deficit in innovation. Millennials in India clearly are looking for innovation—a reputation for innovation is important for roughly 90 percent of millennials in India when they choose an employer, according to Deloitte’s Millennial survey. And with entrepreneurship a vital factor in building innovation within an economy, it should be heartening that 87 percent of India’s millennials said they see themselves working independently someday rather than being employed within a traditional organizational structure.

It’s not unusual for a country’s leader to deem its youth the key to the future. But in India, which enjoys a demographic advantage over much of the world’s developed economies, this mantra is more than rhetoric and holds incredible potential if properly cultivated.

1FirstBiz, 18 September, 2014.
2Cornell University, INSEAD, and the World Intellectual Property Organization.


Dttl_garycoleman_56x56Gary Coleman is Managing Director, Global Industries, of Deloitte Touche Tohmatsu Limited. He is a member of Deloitte’s Global Markets Committee and is the lead partner in Deloitte’s strategic relationship with the World Economic Forum. Follow him on Twitter @gcoleman_gary.

Public Policy: innovation’s underrated enabler

By Gary Coleman - September 24, 2014

AMNC POST-EVENT BLOGAt the World Economic Forum’s Annual Meeting of the New Champions (AMNC) this year, Tianjin Mayor Huang Xingguo (pictured) discussed some key drivers of innovation—ideas, entrepreneurship, convergence. But he also brought forward what might be considered an underrated contributor: public policy.

Public policy—if not business-friendly and irresponsibly administered—can stifle an economy. But, if well-crafted and executed, public policy can just as easily enable a culture of innovation. It may be the unglamorous side of innovation—but a side that is critical all same and proving to be especially impactful in China.

Take entrepreneurship. For innovative ideas to be nurtured, entrepreneurs need to have a level playing field on which to launch their businesses and compete against large, established entities. That is, public policy must allow equal access to credit, fair competition, transparency of information for all, and the capacity to set up a business without excessive bureaucracy. But in China, entrepreneurs still face steep hurdles in this regard. State-owned enterprises have easier access to funding and continue to skew the competitive landscape1. In addition, setting up a business remains challenging: China ranks 158 on the World Bank’s 2014 Ease of Doing Business indicator on starting a business. In response to this, China has been streamlining business registration processes and, according to Premier Li Keqiang’s remarks at the AMNC, this has led to more than 8 million new businesses in 2014 so far.

Convergence is also an area in which China is seeking to improve. Collaboration among institutions of higher learning, private industry, and a free flow of information are key to encouraging innovation—as clusters such as Silicon Valley demonstrate. China has made concerted efforts to build clusters and special economic zones that promote the convergence innovation needs to grow. One of the first of these, the Shenzhen technology cluster—which includes companies like Huawei and Lenovo, a range of universities, and is located next door to Hong Kong—is now rivaling Silicon Valley in terms of international patents2.

To keep this momentum going, however, public policy must promote local and foreign direct investment in growth sectors of the future, such as advanced manufacturing, e-commerce, IT sciences, mobile technology, and life sciences. Part of this will involve China continuing its significant emphasis on promoting research and development: the Chinese government has steadily increased its targets for science and technology in its five-year plans (FYP), going from a target of 1.5 percent of GDP in its 10th FYP to 2.2 percent in its latest FYP (12th)3.  But part of it will also involve stronger IP enforcement. Even Premier Li acknowledged that IP protection is critical to “stimulate the enthusiasm for innovation.”   Listening to both Premier Li and Mayor Huang at the AMNC, it is clear that the Chinese government sees the value in business-friendly policy that enables innovation. If successful, China’s public policy may very well become an important conduit and, in the words of Premier Li, “the blood of innovation will flow unhampered.” 

 

1 Foreign Affairs, 16 December 2013; 2 The Age, 30 December 2013; 3 Manufacturing Competitiveness Study, Deloitte China


Dttl_garycoleman_56x56Gary Coleman is Managing Director, Global Industries, of Deloitte Touche Tohmatsu Limited. He is a member of Deloitte’s Global Markets Committee and is the lead partner in Deloitte’s strategic relationship with the World Economic Forum. Follow him on Twitter @gcoleman_gary.

Cross-sector collaboration: essential to protect Brazil’s rainforest

By Eduardo Oliveira - September 22, 2014


ForestBrazil’s Amazon is famous worldwide for its natural resources and environmental importance. Yet its preservation is being threatened by the social challenges faced by people in the region.

This was the scenario addressed by an unprecedented study, “Social Progress Index in the Brazilian Amazon.” The research was conducted by the Imazon research institute in partnership with Social Progress Imperative, and the Avina Foundation. The study was prepared by #Progesso Social Brasil, a network organised by Deloitte Brazil and Avina, focused on bring different sectors of society together to drive social progress and wellbeing.

The 2014 Amazon Social Progress Index report showed that social progress in the region is significantly lower than the rest of the country. It shows that the region has a general Social Progress Index score of 57.31, lower than the national average of 67.73, based on a range that goes from 0 (worst level of social progress) to 100 (best). In the evaluation 772 municipalities in the region, 98.5% had a Social Progress Index score lower than the average of Brazil.

Knowing the challenges facing people in the Amazon region is the first step--a lack of opportunities was found to be the most pressing problem Amazon residents faced--but addressing these issues is the next step and this requires all our efforts, including businesses.

At Deloitte we believe that business has the power and responsibility to help build a robust and prosperous society. Business serves human needs and desires, creating vital products and services, which drive social and economic development. Thus a thriving society requires thriving businesses and for business to thrive over a sustained period, it needs to operate in a prosperous society.

Yet, the complexity of the big societal challenges demands collaboration. At Deloitte, we are working as part of #Progresso Social Brasil, to bring different sectors of society together--different businesses, but also civil society and philanthropic organizations, government bodies and academia, to better drive social progress. Collaboration is essential if we are to tackle complex problems such as deforestation and communities with too little opportunity. Regardless of sector, it is imperative that all of us begin to ask ourselves what societal problems we our best positioned to tackle and how we can work with others to drive change.


OLIVEIRA EduardoEduardo de Oliveira is a Financial Advisory Partner and the Public Sector leader for Deloitte Brazil. He has 24 years of experience working for Deloitte, leading teams focused on valuations, acquisitions processes, fixed asset strategic management and privatization.