New Delhi: Johan C. Aurik is the chairman and global managing partner of strategy consulting firm A.T. Kearney, a role he took up in January 2013. His expertise includes a wide variety of strategic issues for consumer goods and retail clients. He has co-authored books including The Future of Strategy and Rebuilding the Corporate Genome.

Aurik, who is in New Delhi as the co-chair of the World Economic Forum’s India Economic Summit, speaks about India’s economy, the government’s Make in India initiative, disruptive technologies and jobs in an interview.

Edited excerpts:

What are your views on India and the economy?

I have been in business for the last 30 years and India was always a promise but never a reality even though it had enormous potential and a huge population. But what is wonderful is that for the first time there is a government here that is enabling change and driving change.

The economy is picking up, 7-8 % growth is massive and there is potential for much more. I became positive about two years ago and every year I am more positive.

The GDP growth, the jump of 16 spots in the competitive index, FDI (foreign direct investment) of $62 billion.

We do an FDI index every year and India was in the top 10 countries together with other big countries like Germany and the US. This demonstrates the country’s increasing attractiveness to foreign investors.

Prime Minister Narendra Modi’s government is committed to regulatory reform to attract future FDI inflows. GST was a miracle, I thought it would never happen.

So, things are looking really good. I am very bullish on India today.

While Make in India is a great initiative and has got off to an excellent start, how can we ensure its long-term success?

Make in India was launched two years ago, the original study was done in 2011 and ambitious goals were set. The government set clear goals for the manufacturing sector and the Make in India initiative to create 100 million new jobs by 2022. These goals, however, may prove to be highly aspirational. Between 2010 and 2014, India created 4 million manufacturing jobs. At that rate of growth, the sector would only produce 8 million more jobs by 2022 — far below the 100 million target. And why is this?

First, the world economy is not growing and Make in India is export-driven. Maybe India should Make for India and not for the world.

Two, the digital revolution affects any industry and it is in full swing—it is not adding jobs but taking jobs away at least in the short term. Yes, start-ups have been created but these are limited.

Three, to stimulate manufacturing you need infrastructure—and not much progress has been made in this area—that should be the first priority.

These are the three key reasons why job growth is not happening.

How can we ensure job growth?

By focusing on India growth, Make for India and Indians and remember that manufacturing output for India needs low-cost goods that are simple rather than manufacturing something for New York or Paris.

Also, roll out more digital initiatives and reskill labour. Make in India will fuel inclusive and innovation-led growth in India only when it is translated into jobs and this is also something that companies should focus on.

In Germany, for instance, companies have a training programme for 16-18 year olds and provide them internships. Education does not only mean university-based education.

Advancements in technology such as artificial intelligence, machine learning and robotics are disrupting factory floors and changing the way they are run and managed. How does this impact India?

As the use of robotics becomes an increasingly critical part of manufacturing, location becomes less important. Consequently, India must develop a unique proposition to attract global manufacturers. Simply relying upon policy changes and a large pool of workers will not work indefinitely.

Chinese competition remains strong and active. Although China’s manufacturing success stemmed from it being a low-cost hub, it has been climbing rapidly up the value chain. China is forecast to become the world’s largest user of industrial robots by 2017, with an estimated 430,000 robots expected to come online.

The second issue is that while automation is likely to increase productivity, it will also render some jobs redundant. India will have to find the balance between incorporating innovations into its manufacturing facilities with its need to create a substantial amount of new jobs.

Over the next 15 years, India will have the world’s largest workforce, with 1 million people joining the already 500 million-strong pool every year. These labour concerns are further complicated because agriculture, traditionally one of the biggest sectors of the Indian economy, has been shedding jobs.

Urbanization, and the success of Make in India is leading increasing numbers of Indians to seek a better life working on a factory floor, than in the fields of a farm.

What excites you about India today vis-à-vis the world ?

Like I said, I am bullish on India. You have 1.2 billion people and growing and population growth is the biggest driver of GDP. India doesn’t need the world like other nations do. Singapore can’t do it alone nor can a country like Switzerland, but India can.

You have a beautiful engineering system, English-speaking people, a good work ethic and business culture, companies like the Tatas and Reliance.

But of course the challenges are equally big. If you do not succeed in bringing the poor people up to the middle class, then people who are in power will most likely be voted out.

In contrast, the world is the new mediocre and will stay that way for some time.

Europe is muddling through, we will have to wait till November to see what happens in the US; Brazil is having major issues. So there are few growth engines in the world. Global trade continues to fall, globalization is under pressure.

So, I am not optimistic about global growth. India is lucky that it is so big that it does not need the world.

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