Speech for CII- Suresh Neotia Centre of Excellence opening

1. Introduction

Thank you so much, Jamshyd, for your kind introduction and that

generous welcome.

It is a great honour to speak at the opening of the new CII –Suresh

Neotia Centre of Excellence for Leadership.

It is also a pleasure to be in Bengal –and in the company of so

many noted leaders and achievers.

What better way to begin than paying tribute to someone whose

achievements demand not only respect, but mean he should be

carefully heard when he speaks.

2. Suresh Neotia

It is surely right that a Centre devoted to leadership is named in

honour of Shri Suresh Neotia.

Something Suresh wrote only recently struck a chord with me.

In a recent article he pointed out that

“After India gained independence, our political leaders set examples

of personal integrity and discipline. Except for a few aberrations, the

business class also conducted itself with

restraint...”

That was the India we both grew up in.

A nation proud of it’s democracy, restraint, and its compassion.

Of course, that India also had its faults.

It grew slowly, condemning many to hard lives of toil.

It was rigid and inflexible. People could not achieve all they wanted

and many felt frustrated at the limits imposed upon them.

As Suresh goes on to say:

”One cannot deny the merits of freeing the economy from the

shackles of control and babu raj. However, at the same time,

one side-effect of reforms was that there was huge

accumulation of wealth in the hands of a very insignificant

percentage of the population...

...Led by businessmen and film stars, ostentatious, vulgar and

crude display of wealth has become the order of the day.

“The rich and super-rich have abdicated their responsibility

toward the society.”

This quote sets us an example because whether here, or in the

Bhagirathi Neotia hospital for women and children, or at the Ambuja

educational foundation, Suresh shows how one can be successful

in business and be a leader in the community.

Yet it also poses a challenge.

We have yet to demonstrate that Bengal can grow fast enough to

meet the needs of our people, yet also retain a sense of values,

restraint and shared purpose.

In other words, We must ask how do we, in Bengal and in India,

deliver leadership in a global environment?

4. The Importance of values

I believe the most fundamental leadership tool is our moral code –

our values.

I have seen businessmen run hugely loss making businesses find a

way to walk away from the wreckage with large sums of money

while their suppliers, workers and community suffer from the debts

they did not pay.

That is not leadership. Leaders are trustworthy and straightforward,

not deceptive and evasive.

I’ve seen managing directors neglect to research products so they

can please stock holders with seemingly healthy profits, knowing

that they sacrifice future growth by offering undeserved reward

today.

That's not leadership.

Leaders think of the long term, not the easy profit.

Around the world I‘ve seen politicians chase the mirage of growth

through borrowing and the provision of financial services, and then

appear shocked when a a lack of credit exposes the weaknesses in

their foundations.

That's not leadership. Leaders know real growth springs from hard

work, inventions, new ideas, better production and new technology,

not from the creation of schemes to finance mortgages in a new

way.

Those are tools for accountants, not for builders of the future.

It is trustworthiness, forward thinking, faith in hard work and a

refusal to accept the lazy short cut that defines the values of a true

leader.

Naturally, leaders always face pressures and potential conflict.

A leader can only resolve these by knowing clearly the values they

hold dear. Knowing what really matters to you makes it easy to

understand what your priorities must be.

So what should be the priorities for leaders here in West Bengal,

and in India more widely?

If we know our values, as Mr Neotia set them out, what should be

our priorities?

And how passionate are we about making our ambitions real?

5. The challenges for Bengal

First, we must be clear about the central challenge we face.

Next we must know our strengths and our weaknesses, our needs

and the pressures upon us.

Finally we need to be clear about the choices we need to make to

get there, and be honest about what we must change to succeed.

The central, overwhelming priority for Bengal, and India more

widely, has to be economic growth.

Further, this growth must be driven by industries that are long term,

involve considerable investment, and will last through short term

crises and dramas.

This points toward a central role for technology, research, science,

engineering and manufacturing.

Only growth in these areas will deliver the creation of jobs needed

to build a prosperity that reaches beyond the wealthy elite and lifts

the living standards of every Indian.

So what strengths do we have in Bengal to help us succeed?

First, we have a strong legacy of educational and industrial

achievement.

This history of learning encompasses the great Bengali poets like

Tagore to scientists like Sir Jagadish Bose and Prafulla Chandra

Roy.

These pathfinders sprang from the strength of our educational

system, which developed successive generations of leaders -

whether it be Bose’s Presidency college, Indra Nooyi’s Indian

Institute of Management Calcutta or my own alma mater, IIT

Kharagpur.

That early educational strength drove the early Industrial and

Business success of Bengal.

It is no coincidence that Kulti is the home of the first Indian blast

furnace, while Uttapara was the site of Asia's largest car factory.

Next, we are fortunate in our location

The Indian ocean guides us towards the emerging strength of

Singapore, Indonesia, and Malaysia.

These economies are becoming the powerhouses of regional

economic growth.

Singapore has developed from nothing to an international industrial

giant.

A quarter of Singapore's GDP comes from manufacturing industry,

but they are not resting on their laurels.

They have launched their agency for advanced science and

technology research– A-Star – which will develop Singapore's

industrial expertise in sectors from Biotechnology to Mechatronics.

Their long term strategy of investment in their industrial future is

bearing fruit today. Singapore's economy is growing at a rate of

nearly 15 per cent a year.

In Indonesia and Malaysia, industry is developing far beyond the

basic fabrication associated with industries like textiles as they

advance towards high value research and development.

Indonesian political stability and a focus on economic reform

amongst the cabinet have seen strong rates of growth since the

nineties crisis. Soon, half a million cars will be sold there each year

In Malaysia meanwhile, Prime Minister Najib is developing a

strategy to lift the economy to the status of a high income nation by

2020. To achieve that, they are already opening up the Malaysian

economy to non-Malays to encourage investment, and will soon go

further – even if that means short term unpopularity for the

government.

As the Malaysian Finance minister Husni Ahmed Hanadzlah has

said “The long-term success of the nation’s economy must take

precedence over the short-term interests of a few protected groups”

Even in Myanmar, we see a country,that, like Vietnam, is simply

waiting for the moment to show outstanding growth. If political

reform can combine with an opening of markets, growth there will

be explosive.

Next, we come to the giant – China.

Bengal's location puts us at the nexus of India's trade with China -

and provides both a huge opportunity and a direct challenge.

I was one of the first “outsiders” to get access to China, in the early

1980s. I saw the beginnings of their space and industrial

programme, and as the country emerged from the cultural

revolution, you could feel the drive and energy of China's leaders.

Even when the nation was subsisting on a bowl of rice, their leaders

talked of Industry, of technology of science, and then did more than

talk, they acted.

I go to China regularly, and the change in the last two decades is

nothing short of astonishing. Visit Shanghai, Guangzhou or

Shenzhen and you see a new world being built as you watch.

Shenzhen's population is now over eight million.

In less that thirty years, the Yangtze and Pearl River deltas have

become the worlds greatest manufacturing powerhouses.

So while we in Bengal possess both great learning and a wonderful

location, we should not congratulate ourselves on our good fortune,

but rather ask why we have not gone further, and then demand

more of ourselves.

Now, recent growth in Bengal has been strong. Since the 1994

reforms began, Bengal has grown in line with most Indian states,

with growth of around 7 per cent a year. Some might say that this

is a sign of success.

It is not.

The challenge is not where we are compared to where we were, but

where we are compared to where we ought to be.

On that measure, the last four decades have been hugely

disappointing.

When we look at the Chinese, the Singaporeans, the Indonesians,

and the Malay, we must confront the difficult fact that they started

without our advantages, yet have surpassed us in industry and

growth.

Of course, some say India has had recent success in the Service

sector and “outsourcing” because of our low labour costs.

Indeed this has contributed to growth. But it is not a sustainable

path.

Look at Britain and the United States, There, the industrial sector

was neglected in favour of services, which then led them to

outsource jobs to cheaper companies.

They are suffenring for that today, and are now trying to attract

industrial investment once more. This is an important warning for

us about the need to develop a balanced economy.

After all, being primarily a services economy fundamentally means

a path to dependence on the success of the economy of the west,

rather than a a connection to the drivers of long term global growth -

the rising living standards and demands of the BRIC nations and

their allies.

So we need a balanced economy with a strong Industrial base so

we will create employment in any global economic environment.

IN Bengal the situation is even more sobering than for India as a

whole. Comparing West Bengal to the rest of India yields no

comfort.

In the 1960s, Bengal was at the top of India's income tables.

Now, we sit uncomfortably just below Indian average income.

Why? Because we fell behind in the sixties, seventies and eighties.

Average growth in Bengal was just 2.45 per cent in the sixties,

3.02% in the Seventies and 4.59% in the eighties.

In 1960 Maharashtra's domestic product was only sixty billion

rupees more than West Bengal, but by 2006 that gap had grown by

a stunning one thousand two hundred billion rupees.

SO why do we, in Bengal and wider India, fare poorly compared to

our neighbours?

Take China- why is the Hooghly sluggish when the Pearl and

Yangtze rivers flow with prosperity?

The truth is, that others have shown greater ambition and greater

purpose for their industry.

Nations like China, Brazil and now Vietnam, Indonesia and

Malaysia are putting manufacturing at the heart of their strategy for

growth.

Warwick Manufacturing Group educates a thousand Chinese

graduate students each year. I work with Chinese business leaders,

companies and technologists from across that nation.

So I can tell you this - when deal with China I see the speed in

which they are able to act, the scale of their ambition and their

ability to secure resources, land, and capital to put an industrial

project together.

When we look at the Chinese leadership that has delivered this

growth, we can begin to see the reason for this.

Of the top 20 members of the Chinese Communist Party's central

committee 18 are engineers and scientists.

These are people who understand the importance of delivering

industrial growth, the need for research, the importance of

collaboration and how urgent it is to act as soon as an opportunity

presents itself, even when the costs seem prohibitive.

When we look at the Chinese in Africa and ask “why are they

there?” we find the answer, not in the next year, or the year after,

but in the Chinese recognition that in a decade or two, their search

for raw materials will require a access to African markets and

therefore it is important to secure lasting relationships today.

Yes, there are problems with the Chinese approach.

They don’t care in the same way about land rights or democratic

protest as we do, and that means injustice.

All these points are well made – but underneath even that, there is

a truth we must face.

China has approached growth in a methodical, focussed way, while

we have not. It began with the Special Enterprise Zones which

showed the potential for growth through industry.

Success there led to an incredible investment in industry and

infrastructure that amazes the businessmen who visit to Shanghai's

Formula one circuit and causes the first time visitor to Shenzhen to

drop their jaw.

Even in the Chinese approach to Traffic management is world

leading, with roads, rail, air and urban transported being built at

astonishing rates, all managed with the most technologically

sophisticated systems.

Compare the results of that methodological and focussed approach

to what we see in Kolkata.

In China we see the results of the ambition, drive and hunger for

growth that has driven China's leaders forward for a quarter of a

century.

Here, we need a lot more of that hunger for growth. All too often we

have acted as if growth was too hard to achieve, not worth fighting

for.

We all know what happened at Singur.

I find it mystifying that we Bengali’s should allow a project as

defining to the global economy as the Tata Nano to slip though our

fingers.

Now, I know there were arguments about farmland, and land rights

and oppositions and so on.

But they have farmers and land rights and oppositions and poor

labourers in Gujarat too.

We should not blind our eyes to the cost of any investment offered.

But our leaders -whether in government or in opposition- must not

forget that decisions have consequences.

Those consequences go far beyond the immediate political battle

for electoral advantage, but impact the lives of millions. These are

moral choices abut how we lift people out of poverty.

In taking hard decisions, our leaders must consider their long term

responsibilities to those they serve.

What will the next potential investor in West Bengal think?

What will be the impact on our growth, and our economy?

Even, what consequences will there be for our learning institutions

and our students?

After all, we should remember why IIT Kharagpur and then IIM

Calcutta were located in West Bengal before any other states.

B. C. Roy was able to point out to Nehru that we had the greatest

industrial concentration in India, and we needed the best education

to help those firms deliver growth.

I doubt the current chief minister could make the same argument to

New Delhi today.

Kolkata, with its natural advantages, educated people and cultural

and industrial heritage, should be buzzing with energy, growth and

passion, just as Shanghai, Shenzhen, Jakarta, Singapore and

Bangalore are.

The fact that we lag these cities, rather than lead them, should be a

source of embarrassment.

If we are to succeed, our leaders must have the courage to accept

their responsibility, not just to be popular, but to secure the future

prosperity of our state.

We need more capital and infrastructure. We need to be flexibile

enough to seize investment opportunities.

That rewuires more development of business sites, more focus on

securing the funding to develop infrastructure, and a real passion to

attract inward investment.

More support needs to go to advanced research and technology –

and on building the links with businesses that need research to

prosper.

We need that focus because we know that the ultimate winners in

such an approach will be the workers, labourers, students and all

those who seek a better life for their families.

If we pursue growth single-mindedly, it is they who will have the

chance to prosper in the global economy.

Those leaders that pursue this vision will become true leaders,

while the mere politicians who battle only for temporary advantage

will keep themselves and Bengal on the fringes of the global

economy and global influence.

What true leader would willingly consign those they lead to such

poverty and irrelevance?

I doubt any sensible leader would make such a choice.

So great credit must go to the Confederation of Indian Industry for

founding this centre of excellence for leadership as part of its

response to our great need for leaders.

This centre will develop skills and teach people how to push

themselves and their organisations forward through times of rapid

change.

It will train business leaders, but also government and trade union

leaders and improve their ability to prepare for the future.

You know, I doubt many business associations around the world

would invest in developing institutions that not only support

business leaders, but also leaders in government and in Trade

Unions.

This centre of excellence will play a key role in helping a new

generation of Indian leaders find that path forward.

In the nineteen eighties, I developed Warwick Manufacturing Group

because I wanted to show the British that the way to deal with

seemingly impossible problems was to tackle them head on by

using research to find new solutions.

I believed then, and am certain now, that the way to secure growth

is to through a sustained investment in the future. -in people, in

science, in technology. The change now is that these answer are

needed globally, not merely in a single state.

As trade has expanded and businesses grew ever more trans-

national, so the challenges nations faced have also become

intertwined.

The whole world is looking for the same solutions, because we

face the same problems.

7. Interdependency

From climate change to the failure of giant banks, issues that

affects citizens and businesses in Kolkata also impact those in

Krakow or Quito.

In this environment the prize for finding answers is great, but the

cost of being left behind is high. I believe that the solution is not to

treat our global competition as rivals – but as partners who can

encourage us to collaborate and work with the best in the world -

whether this involves working with IIT Kharagpur or WMG, MIT or

INSEAD.

That is why I am a passionate advocate of international

collaboration on research, and why IIT Kharagpur and WMG are

working together on projects from healthcare to materials science.

8. Healthcare

Health care is one of the great technological challenges of the

twenty-first century.

As we grow more prosperous, the ability to extend and preserve life

will become available to billions more around the world.

This availability will bring global inequality into sharp relief and with

that will come huge costs and pressure on scarce resources.

Yet we cannot shirk our responsibility to lead – to offer better care

and treatment to the sick and malnourished around the world.

So to deliver on our responsibilities, we must make surprising multi-

disciplinary moves, like incorporating leading edge digital

technology and engineering expertise in healthcare process

management.

In the last few years I have seen that many of the problems faced in

providing healthcare worldwide can be addressed by an industrial

scale understanding of technology and processes.

Consider the problem of ensuring patients are in the right place in

hospital for their treatment at the right time, a logistical issue that

currently consumes the time of nurses, doctors and hospital porters.

At WMG we are researching systems where patients manage their

own movement around a hospital with robotic guidance.

This frees up precious and expensively trained human resources to

focus on treatment and care.

So a new generation of business and management leaders will

have the chance to utilise the robotics and computer knowledge of

modern manufacturing for the benefit of patients.

The demands of twenty-first century healthcare will requires the

talent of engineers, computer scientists and mathematicians, as

well as doctors.

Those that take this opportunity will be delivering on their

responsibility to improve lives and treatments – and thus showing

leadership.

It will be the innovators who bring these threads together who will

ensure more surgeons will be trained world wide and better

treatment will be available to those who have been denied it for too

long.

9. Climate Change

The other great challenge I wish to talk about today is that of

climate change and globally increased demand for energy.

We know that we will need more energy to ensure our economies

grow.

We also know that the energy we produce now has an

unacceptable impact on the environment.

First we need to develop ways of maximising energy efficiency.

Second, we need to find new sources of energy.

At WMG we are looking at Low Carbon Vehicles from the bottom

up.

For example the in-mould painting process, developed and

patented at WMG, has been applied by companies worldwide,

including in India. In mould painting removes the need for paint

shops, which consume 40% of the entire energy used in vehicle

production.

Yet even with those step changes, greater solutions will be needed

in the long term.

As the global economy grows the number of cars purchased will

also grow. That requires research that looks at new ways to build

and run cars.

At WMG we have shown how plant based materials can replace oil

based plastics. We have now built a racing car that uses cashew

nut shells and starch from potatoes to build body panels.

This year we will be racing a Formula 3 car built from natural origin

materials and running on biofuels. This science of finding new

sources of ultra lightweight materials could transform car weights

and environmental impacts.

Investing in green solutions is neither easy nor certain. Yet if we

are to stay true to our core values, and to our responsibilities to the

wider community, it is something we must do.

At WMG we are developing a major technology demonstrator

project that will bring together global automotive leaders with

research scientists and parts suppliers to look at every aspect of

low carbon automotive design.

This project will become more important as demand for energy

becomes one of the defining features of our global environment.

We can see the after effects of increasing energy demand, not just

in oil prices, but in the debate over the future of Iran’s nuclear

programme, and in the politics of the Middle East.

So if we can find ways of managing that demand more effectively

the long term consequences will not just be less polluting cars or

more efficient factories, but a less dangerous world.

In short, the more scientific solutions we apply,

The less pressure on resources there will be,

And the lower the risk of human conflict and tragedy.

To me, embracing that moral opportunity is what leadership is all

about.

It is the essence of the challenge India's leaders will face over the

next twenty years.

10. Conclusion

So global challenges define our new world.

We face a growing population and must expand our economy to

meet their needs.

We face a climate crisis that threatens to change the very structure

of the world around us.

We face pressure on natural resources like oil and coal as

populations demand ever higher standards of living.

We face a world where the demand for health care will increase

even faster than our population.

At the same time, we face a world where growth can be

extraordinary – and threatens to leave the backward far behind.

I believe the solutions we seek are to be found in businesses,

laboratories and research institutions around the world.

Our state, our country, our globe needs leadership, to make those

technical answers real.

Now, this leadership is not to be found in mantras, but in sustained,

practical action.

When I come to India I hear a lot of Business Mantras. In fact India

is noted for it's business mantras and paralysis by analysis. There is

nothing we like better than a report, or a consultation.

Unfortunately, a consultancy based culture, which peddles the

same easy answers and mantras from one company to the next

offers essentially a superficial approach.

If we look at Industries that have lived by similiar mantra's and

consultants like the US Car makers or the old british Steel industry,

we can see that this path leads to disaster.

Successful companies like Boeing sell their Dreamliner on the basis

of superior technology and performance and do well. That is the

focus of their whole company.

In Europe, The nations that are recovering first are those like

France and Germany which have avoided the excesses of

consultancy culture and focussed on research and technical

advances. Their growth is being driven by demand for their world

class products.

If we look at China, and Japan and Korea, It is their emphasis on

research, on investment and their empowering of engineers and

technologists to become practical entrepreneurs that really makes a

difference.

Success comes from doing, not saying.

It is action, not talking, that creates what President Obama calls the

ecology of scientific and technological growth.

In India, we need this leadership of ambitious, purposeful action.

We have a fantastic culture from poetry to science, an educated

and sophisticated workforce and have perfect location for growth.

The opportunity we have in Bengal to bring health, a safe

environment and prosperity to many millions.

To make that happen requires technological solutions that are

applicable globally and products that deliver solutions in a cost

effective way.

That requires openness to investment, a focus on human and

capital infrastructure, high priority to technology and science

research, and above all, a belief in the ingenuity and skills of our

citizens.

If we do not take this opportunity, in 20 years time we will be talking

about the same issues, the same problems.

Yet if we seize the moment, then the next two decades could be the

era of a new Bengal Renaissance. We can emerge, once more, as

a leader in the global economy.

It will be the leaders trained here who will make that happen. It is

their responsibility to the future.

I wish them, and the CII, not the best of luck,

but the greatest of ambition to succeed.