GGI Business Review is a new business series, capturing snapshots of the GGI Harvard Case Style Masterclass by CEOs and Industry Leaders.
This particular piece is a snapshot from Barnik Chitran Maitra's GGI Masterclass.
Great leaders rise during times of great crisis, and a similar thing can be said about management consultants, as great consultants come up big during the times of solving the most challenging problems.
Similar challenges were faced by the current Managing Director of Arthur D. Little, Mr Barnik Chaita Maitra, during his time at Arthur D. Little and McKinsey & Co., and he shares his insights on how during times of crisis we can come up with novel solutions to the most difficult problems at hand.
THE EGYPTIAN REVOLUTION
Egypt was going through a revolution in 2007, and the youth was frustrated over the lack of high-quality jobs available for them. In order to control this growing unrest, the Egyptian government led by President Hosni Mubarak decided that certain policy level changes are required to create high-quality jobs for the youth as the unemployment in the country was reaching a staggering 15-20 % of the total population.
To take control of this situation, the government identified two countries for benchmarking job creation among the youth.
1. CHINESE MODEL
China has been successful in creating millions of jobs for the youth across the nation through intensive capital investment, thereby creating industries which generate massive employment among the youth.
But this approach requires a lot of capital investment, which the Egyptian government lacked, and so they decided to go ahead with the model adopted by the second country, i.e., India.
2. INDIAN MODEL
India’s model of job creation is based on creating an IT revolution in the country by creating jobs focused on providing services to multinationals around the world and software development among others. This has been achieved through the development of the Indian IT Industry as an outsourcing hub, where a lot of multinationals are operating their call centres to handle global customers.
Now, the question arises how can Egypt replicate India’s model and make Egypt another IT Hub? There are multiple ways of achieving this. Because Egypt has a fairly young population, the youth could be trained through various modes and groomed for call centres/BPOs.
If we narrow down the problem then we arrive at the juncture, where the government has to essentially identify ways of creating a vibrant BPO and Tech Sector, where the BPO/IT Sector is focused on providing services to multinationals, whereas the Tech Sector is focussed on software development which would further enhance the overall capacity of the industry.
It was further identified, that to achieve this, the government needs to create a $10 Billion industry which creates 10 million direct jobs that in turn lead to the creation of 20 million indirect jobs.
So, now the focus was laid on creating an economy where people with no formal training could be turned into valuable assets for the growing industry, for instance providing training to a local accountant so that he could become an analyst at a bank like JP Morgan.
MULTILINGUALISM IN THE ECONOMY
After doing more investigation on making this a reality, the concept of Multilinguility in Egypt came forward. It turned out that a lot of Egyptians knew more than 2 languages because of the history of the occupation of the country by a lot of European occupiers like the French and the British.
This multilingualism had also become a part of the local education in the country.
Moreover, because of the heavy tourism in Egypt, the concept of multilingualism had been deep-rooted in the economy.
No other country in the world had such a diverse lingual base, and this base could be used for providing services to the companies in Europe for running the tech and back offices of European companies.
In order to successfully execute the plans, the work was divided into three streams:
1. Demand Generation: Under this stream, different multinational companies from around the world were invited to invest their money and set up their offices in Egypt.
2. Skill Development: Work under this stream involved partnering with universities and international organisations to prepare certification courses for youth which would be provided as free credits in the college, thereby developing the knowledge level of youth at an early stage and preparing them for the corporate world
3. Real Estate: Now, since a lot of new companies were to set up their offices in Egypt, a robust infrastructure was required which would support all the needs of the growing industry. This also involved pushing the government to improve telecommunication connectivity around the country while ensuring the prices of such services are benchmarked according to international standards.
INDIAN INTERNET REVOLUTION
Another revolution has been happening in India right now, and that is the internet revolution, where different players are trying their best to survive in the intense Telecom Industry of India.
Companies like Jio have disrupted the telecom sector through cheap internet and this has forced the other players to lower their prices as well.
However, this has led to a massive issue of survival in this industry as low prices are making it difficult to operate in the industry.
Due to scarcity of funds, the companies have also been hit hard in their bids to roll out different technologies.
So the question now arises how does India build the right infrastructure to unlock the Digital India potential and increase the overall fibre penetration among the population?
There are various countries which could be benchmarked for the same, for example, Australia where the National Broadband Network has worked towards providing internet as a utility, but this model is not feasible for demography like India. Another interesting model is the European Model.
EUROPEAN MODEL OF INTERNET CONNECTIVITY
Under this model, a few telecom companies came together and created an open access network. Through this, they created utility among themselves and this utility has capital and resources from individual telecom providers and other private funders. The task of this group is to just build a fibre network in the European countries and those companies which don't have the financial resources to build such a massive network could buy services from this group.
Currently, India should focus on encouraging telecom companies to build such a model so that monopolies could be avoided and customers have multiple options to choose from.
On the other hand, the government should also put out certain roll-out obligations where companies should have a minimum rural roll-out obligation to get spectrum for operating a network in the country.
Another model that can be adopted by the government is the rolling out of contracts for private players to build the fibre network across the country.
However, this comes with the challenge of ensuring the pricing is sensible but adequately high so that a sustainable infrastructure could be maintained
Therefore, the government has to create the right environment for players to come in and roll out internet facilities. For this purpose, some policy changes might be required as well like changing the FDI Cap for attracting foreign investors.
Through the above two revolutions, we identified the different methods of coming up with novel solutions to the problems which arise during challenging times. Such problems can only be tackled through systematic planning while taking into consideration various demographic and geographic factors.
Barnik Chitran Maitra is the Managing Partner/Managing Director of Arthur D Little, India and South Asia. At Arthur D Little, he is responsible for the company’s regional footprint by serving leading institutions and ensuring a pre-eminent position for ADL in India and South Asia. Prior to joining Arthur D Little, Barnik was a long-standing Partner at McKinsey & Company.