New Delhi: Even though India’s ranking on the ease of doing business index has improved, but Klaus Schwab, founder and executive chairman of the World Economic Forum (WEF), said that red-tapism and the lack of world-class infrastructure are the two main hurdles faced by foreign investors in India.
Schwab, who was in India on December 13 to speak on the forthcoming WEF in January 2019 in Davos, said, “I always hear foreign investors complain how difficult it is, particularly, the bureaucratic process which is the main impediment to business. However, once the business is here, they are very satisfied with working in India.”
According to the WEF founder, the other factor impacting the inflow of investments in India is infrastructure. As much as US$800 will be needed over the next 10 years to improve India’s infrastructure, he said.
‘India is competing with countries where it takes half-a-day to start a business’
While noting that the improvement in India’s performance on the ease of doing business index was a crucial step, Schwab said that it is less than perfect: “A powerful indicator (of ease of doing business) is that how long it takes to create a business. You have examples in the world where it takes half a day and India is still in the middle.”
“It is very important for young entrepreneurs to create companies faster because the jobs of the future will not so much be created by large companies but by young and upcoming entrepreneurs,” Schwab said.
Speaking of the challenges posed by Industry 4.0, the WEF Chairman said that the competition in the future is going to be less on the basis of cost advantages and more on the basis of innovative capabilities. “I wonder whether India can catch up with the United States (US) and China, particularly in the area of artificial intelligence,” he said and added that since bulk of India’s population comprises of youngsters, it remains to be seen if the country is capable of equipping these young people with skills that are needed in future.
“The fourth industrial revolution will destroy many traditional jobs and create new ones that will require new skills. If I look at the Indian education system, it is still very traditional and businesses and government will have to work together to train people for the jobs of tomorrow,” he said.