1. India & EuropeHow to create a Win-Win game in IT ?IIT Delhi - 24 November 2008Dr. Jean-Joseph BOILLOTEconomist India-ChinaCofounder Euro-India Economic & Business GroupEIEBGgroup@gmail.com

2. Challenges ahead Economic catch up: magnitude and lag Population challenge: the Window of Opportunity Global challenges: see climate change The Services Revolution Challenges for Europe Challenges for India

3. India and Europe 2025: still distant

4. … even more per capita

5. : INDIA: annual rate of growth total and active population CHINA: annual rate of growth total and active population 3,0 Total Pop old15-59 2,5 3,5 3,0 2,0 Total Pop 2,5 old 15-59 1,5 2,0 1,5 1,0 1,0 0,5 0,5 0,0 0,0 -0,5 -1,0 -0,5 -1,5 1950-55 1960-65 1970-75 1980-85 1990-95 2000-05 2010-15 2020-25 2030-35 2040-45 1950-55 1960-65 1970-75 1980-85 1990-95 2000-05 2010-15 2020-25 2030-35 2040-45 How long the Demographic Window of opportunity?

6. The World Population 1950-2050 (billion)

7. Same in percentage, Different picture!

8. Even more with the 15-24 years old group

9. The Earthquake on the global labor Market 5 years incremental variation of the age group 15-59 % total world

10. CO2: a good exemple of the sustainable challenge

11. II-The Services Revolution and the standart Economic Theory

12. The Services Revolution and the standart Economic Theory

13. The Services Revolution and the New Economic Theory of imperfect competition and localisation 1/ The ITC revolution allows an increasing number of services to be produced at TIME and PLACE different from the place of consumption. 2/ The production any services can be henceforth distributed internationally according to the comparative advantages of territories and of the competitive strategies of firms. 3/ The economics of services gets more and more closer to the standart « industrialisation model » and « imperfect competition » : high specialisation, return to scale, cluster and size benefits etc…

14. Outsourcing: just a begining!

15. Country advantage (45-55% savings) Vendor advantage (30-40% savings) Does not Include gains from Over-delivery and continuous improvement 100 60-65 10-15 8-13 5-7 3-5 Consoli-ation, Standar- Dization & superior skills Task Reengi neering Econo- mies of scale Process Reengine -ering New cost base Original Cost base Factor Cost Savings Additional Telecom & manage- ment costs Off-shore Location cost Task migration Task level improvement Global Gains, yes, but what distribution?

16. And Europe swandich between the USA and India End of cycle Embryonic Growing Mature High (Low) IT Offshoring Call centers Banking BPO Accounting HR Maturity (Value Add) Contract manufacturing R&D/Innovation Knowledge Processes Low (High) Timing How to reopen the pathway to India with a mixed strategy

17. III- Dual challenge Europe and Indiaa/ for Europe The Brain Drain between Knowledge Based Economies: the EU Human Capital Outflows to the US (Ahmed Tritah survey, CEPII 2008) 1/ EU brain drain to US is about a small number of individuals, but the share of Europeans who are leaving is increasing as one moves along the educational distribution and ladder of occupations that matter the most in the knowledge economy. 2/ Using productivity based brain drain indices it is found that aggregate human capital conveyed by emigrants has increased since the 1990s. 3/ Finally, as a proxy for the of human capital embodied in EU emigrants, Europeans earn a positive wage premium relative to the US natives and even higher for the most recent expatriates cohorts, providing further evidence that the quality of European emigrants has increased.

18. a/ for Europe (2)

19. b/ for INDIA

20. Understanding better the EU New Economic Geography in our Globalized World