The emerging economic order

I recently returned from the World Economic Forum in Davos. The event resonated with discussions and ideas on building resilience across the globe. For one, the increasing interconnectedness that we have built over the years has ensured that no part of the world is left untouched by problems arising in one part. And as the global economy stands at the brink of another critical change with recent data pointing to a slow rebound in the US, still the world's biggest economy, and the pace of growth of India slowing, I have been mulling over the impact this will have for all of us.

Several speakers were bullish about the US economy, predicting a growth rate of 2-3 per cent for 2013; some enthusiastic people were saying it could reach 4 percent! As the U.S. housing market recovers, stocks rally, Europe deals with its debt crisis and the economy in China shows signs of improvement, there was reason for cheer and optimism. There was a sense that the world economy has turned the corner, and after four long years, we have finally put the financial crisis behind us. At the same time, growth in the larger emerging markets has begun to slow. People mentioned the specter of growth figures not budging beyond the 5.7 percent mark for India, and predict a fall to 5 percent.

This most likely means that the days of stellar growth rates in the emerging markets are over, and emerging market growth in the future is going to be more moderate. While I think the emerging markets will continue to outperform the advanced economies on the growth front, the gap in performance will narrow. We will see slow to moderate growth across economies, and this may not be a bad thing - moderate growth (less export-led growth in surplus (developing) countries and weaker consumption growth in deficit countries) will lead to a reduction in global imbalances-something to be welcomed, not rued.

What does this mean for business, especially in terms of IT investment? The WEF's theme of 'Resilient Dynamism' translates to the motto of 'cautious optimism' for businesses and organizations worldwide. Companies are at their leanest operations now, having pruned every conceivable frill in order to stay in business. This will mean that investments in IT and otherwise will continue to be scrutinized carefully for maximum ROI and business impact. Technology implementations will have to support business goals. I expect a little bit of loosening of purse strings towards IT investments, especially in those industries that have a huge legacy backlog that they must urgently upgrade in order to be competitive especially in the emerging markets. The slowdown in the emerging markets will translate into a corresponding slowdown for both consumer and business technologies. Companies will also explore newer technologies and trends such as social media, cloud big data and mobility in order to improve the performance of the enterprise.

Just because the crisis mood has dissipated, companies should not slip into their old ways. "Do not relax," International Monetary Fund head Christine Lagarde urged at a closing panel on the economic outlook. The same goes for IT companies – do not relax, but continue to create solutions that create tangible business value, and move technology from a supporting tool to a strategic driver.

About the Author

Anand Sankaran was the Senior Vice President and Business Head, Global Infrastructure Services (GIS) & Wipro Infotech (WI).

As the head of GIS & WI, Anand was responsible for developing business strategies and new business models, financial planning, customer acquisition and retention, leadership development and management of the partner eco-system. Under his leadership, GIS & WI had witnessed exponential growth, and are among the fastest growing business units in Wipro.

Anand took over as the head of the Global Infrastructure Services (GIS) in 2011. GIS is Wipro's strategic business unit, accounting for over 33 percent of the organization?s revenue and provides a vast portfolio of services spanning across cloud services, systems integration, managed services, and total outsourcing in a global delivery model. He played a pivotal role in the acquisition and nurturing of 500 + GIS customers globally which includes top companies across industry segments.

Anand has also proficiently led Wipro Infotech (WI), which offers a comprehensive suite of solutions and services to customers in India & Middle East. He has grown WI from a fledgling business unit to an INR 7000 crore strategic division of Wipro's IT Business.

Over his two and a half decade tenure at Wipro, Anand has incubated several large business units from their infancy. One of his pioneering initiatives was the inception of the Total Outsourcing Business for Wipro. This new business model proved to be a game changer for Wipro, catapulting the company from a system integrator to a transformational player across verticals in India and across the globe. His strategic thinking, deep customer understanding coupled with his intensity to win, helped Wipro bag several marquee deals in India which set precedence for the robust growth for Wipro.

Anand has been on a career fast-track and has grown through Wipro's rank to hold several key positions as sales and business head across geos giving him a wide breath of expertise and rich domain knowledge across the different business units.

A thought leader in technology and business, Anand is an avid blogger and speaks regularly on contemporary topics in various industry platforms and media forums.

Anand holds a Bachelor degree in Engineering from Karnataka Regional Engineering College.

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