China may currently be the fastest developing economy in Asia, but a leading futurist told last week’s forum that India was expected to become the region’s dominant market in the coming years.
China may currently be the fastest developing economy in Asia, but a leading futurist told last week’s forum that India was expected to become the region’s dominant market in the coming years.
India’s relatively transparent democracy, greater investment in the IT and services sectors, and wide usage of English were all factors in its favour, according to leading US forecaster Marvin Cetron, founder of future think-tank Forecasting International.
But while Australia should improve ties with India to take advantage of the expected growth, elements of that country’s expansion may also hinder Australian trade.
Mr Cetron urged company directors to think about the implications of a larger, more dominant India.
He said that by 2020 80 per cent of the world would speak English, which was an obvious advantage to India.
The economies of China and India were becoming more intertwined, Mr Cetron said, with China outsourcing most of its information technology business to India.
But while this may be good for China, Australia could face being squeezed out of the services industry by emerging competitor India, according to Perth-based futurist Wayne Pethrick from international consultant The Futures Lab.
Mr Pethrick agreed that India was well-placed to outgrow China, adding that the global nature of India’s outsourcing services industry made it all the more likely to overtake its Asian neighbour, which was a significant dilemma for business. This compared with China’s current manufacturing dominance and a relatively closed economy, he told the forum.
Australia’s services sector presently contributes about 22 per cent to national trade credits, according to the Australian Bureau of Statistics.
And while Australia currently makes a net profit on trade with India, Mr Pethrick said that could soon change as India expanded its cheaper outsourcing services.
“If Australia is not able to offer cheaper alternatives, we could soon be talking to online Indian doctors for our prescriptions,” he said.
Mr Pethrick told the forum that while Australia was treading a fine line by negotiating bilateral free trade agreements with the US and China, an investigation into trade with India should be conducted in the short term.
“There is definitely room for significant expansion in energy trade with India,” Mr Pethrick said.
This was also where Western Australia was most likely to benefit, he said.
