Global De-Risking To Benefit India | Davos WEF 2024 | NDTV Profit
#NDTVProfitAtWEF | India has an opportunity in this fratured world, says Dassault Systèmes' Florence Verzelen.
Watch her in conversation with Niraj Shah on the sidelines of #Davos2024. #WEF
Read all #WEF2024 updates: https://bit.ly/420ODMW
Watch her in conversation with Niraj Shah on the sidelines of #Davos2024. #WEF
Read all #WEF2024 updates: https://bit.ly/420ODMW
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00:00 Well, on the sidelines of the World Economic Forum at Davos, we are in conversation with
00:19 Dassault Systems.
00:20 It's got a strong presence, by the way, I've made this, read it out.
00:24 Offices in Mumbai, Pune, Bangalore, Chennai and Kolkata, if I'm not wrong.
00:27 Yes.
00:28 And over a thousand employees.
00:30 Customers include aerospace, automotive, manufacturing, and as Florence Berzelan tells me, infrastructure
00:37 as well now.
00:38 Exactly.
00:39 Like we are working with companies like Adani, but also with cities like Jaipur.
00:44 And we are working, for example, on doing the virtual train of Jaipur.
00:48 Particularly love the project because the city is amazing.
00:51 Okay.
00:52 And by the way, lest you not get impressed, Florence last time when she spoke to us said
00:56 that she loves India.
00:57 So I'm going to.
00:58 And I still do.
00:59 You still do.
01:00 Yes.
01:01 Okay.
01:02 Let's start off with how do you see the world at large from your prism, considering that
01:07 it seems to be, for lack of a better word, a fractured world related to what it used
01:14 to be, with growth likely to taper off relative to what the beliefs were at the beginning
01:19 of 2023.
01:20 I think it's definitely a fractured world.
01:24 But I think it makes it even more interesting for a lot of countries, including India.
01:30 You know, a lot of companies are talking about de-risking.
01:34 What does it mean?
01:35 It means that because the world is fractured indeed and supply chain can be disrupted,
01:40 they need to find alternatives when it comes to their supply chain.
01:45 And for that, for a lot of them, especially European companies, but also American companies,
01:51 India is an amazing place where to put your supply chain and some of your manufacturing
01:56 plant.
01:57 So I'm talking with a lot of companies who really want to have their manufacturing plant
02:01 in India because India is not a risky place.
02:05 It's a de-risking policy, but also because the people in India, the workers in India,
02:09 the engineers of India are very good.
02:11 So yes, it's a strange world, if I may call it like that.
02:15 But for India, I think it's an amazing opportunity.
02:18 Okay.
02:19 And we'd love to probe that because one of the things that we think of when we are looking
02:24 at what India as a country could do and our markets could do is looking at the number
02:31 of countries which are going to elections, let's say for in 2024.
02:34 Including France.
02:35 Including France.
02:36 And how many out there have a higher probability of policy continuity and presumably India
02:41 ranks right up there.
02:42 So is that a telling factor or not necessarily so?
02:46 For me, it's not a telling factor for India.
02:50 It might be a telling factor for China because for example, US-China policy can evolve.
02:59 Some other countries in Canada as well.
03:01 But I think most of countries, including US, but also European countries, really consider
03:08 India as a safe country.
03:10 Whatever the government in Europe are, and as you know, as I was saying, we have European
03:14 election in June, India will stay an ally and will stay a safe place to do business
03:21 and to have a supply chain.
03:23 So for me, this election year won't be an issue for India.
03:29 But you should continue to push on this de-risking policy.
03:34 Because yes, it's an opportunity.
03:35 If you go into the supply chain of the car industry, the supply chain of the aerospace
03:40 industry, there is a huge opportunity.
03:43 So when you say this, that a lot of companies that you talk to as well, and maybe even Dassault
03:49 because you already have a strong presence, and talking about the supply chain shift or
03:54 strengthening of the supply chain in India, we were speaking to IKEA and ABB and they
03:59 were talking the same thing.
04:00 I would love to understand when you talk about this, what do you mean?
04:03 I mean, what are the kind of companies, are companies already present in India?
04:06 Or do you think companies which are not present in India are also wanting to come to India,
04:10 ASEAN, for example?
04:11 I think two things.
04:13 I think that when it comes to aerospace, car industry, but also consumer goods industry
04:18 for the supply chain, like the IKEA and the supply chain, or ABB or the supply chain,
04:23 or either process industries, the one who are already present in India might grow.
04:29 But new ones, the ones that are in countries where supply chain can be disrupted, where
04:34 front borders can be complex to manage, might want to invest in order to de-risk, to have
04:41 production in different countries, including India, which is seen as a safer place right
04:46 now.
04:47 That's what I mean.
04:48 And the interest of India is two things.
04:49 It's a safer place when it comes to doing business and to exporting, but it's also a
04:54 very good place when it comes to the human resources.
04:57 Because what I've seen working in India since now some time is that the skills of the Indian
05:05 people have grown tremendously.
05:07 Today, you know, we have more than 3,000 people in India, but also more than 2,500 doing R&D
05:13 for the rest of the world.
05:15 Why?
05:16 Because all Indian teams are among the best in the world.
05:19 They're super innovative.
05:20 They're super good because they're super well trained, but also, I mean, the state of mind
05:25 and the innovation is a state of mind in India.
05:28 So I think for this reason, it's also super interesting for companies to invest in India,
05:34 like we are doing as a system.
05:36 And then there is a third reason, which has nothing to do with de-risking, is the Indian
05:40 market.
05:41 You know, along the past five years, we have seen an increase of production and market
05:48 in India, which is just huge.
05:50 And today we have more than 30,000 customers in India, a very innovative company doing
05:55 electric vehicle, electric scooters, consumer goods, but also Adani, Tata, all of them.
06:03 And we're growing in India for India as well, because the market is extremely expanding.
06:10 So India for India is also very interesting for a lot of companies.
06:16 And that would be amazing, because from your business perspective as well, I'm just trying
06:18 to understand, Florence, the more businesses set up, and because you are such a specialized
06:24 global company, would mean that you would probably be the first port of call, so to
06:29 say.
06:30 But the second part of my question, that one is acquiring more customers.
06:32 The second is deepening the relationships with existing customers, because a lot of
06:36 Indian businesses have now become much larger than what they ever were, say, 10 years ago.
06:41 Maybe true for the rest of the world as well, but definitely in India.
06:43 Is that impacting your business positively?
06:46 It's impacting very positively my business.
06:48 You know, in 2023, India has been in the top three of the countries where we have seen
06:53 the highest growth.
06:55 But it has been in the top three mainly because of the Indian companies that are buying our
07:00 software.
07:01 And we are selling innovation software.
07:03 So when we are growing in a country, it means that the country is super innovative and the
07:09 country is growing.
07:10 We are a very good indicator of the state of business of a country.
07:14 So I think India is an amazing place to invest right now.
07:17 Okay.
07:18 Now, within India, because you are in present in a multitude of teams and sectors, what
07:23 is looking the strongest?
07:24 I heard a lot of people at this REF tell me about how global private equity funds and
07:30 venture funds will make a large, will buy a slice of Indian infrastructure projects,
07:36 which never happened in the past, but might happen over the course of the next 10 years.
07:39 I heard you say about infrastructure as well.
07:41 Talk to us a bit about that.
07:42 Infrastructure is super big in India.
07:45 Why?
07:46 Because you have different kinds of projects we are looking at in India.
07:49 There is a rail project.
07:51 We are partnering, for example, with Crescent.
07:53 It's a very, very good partnership.
07:55 Rail projects are huge.
07:56 Then there is also energy project.
07:59 India is one of the biggest countries in terms of cost for renewable energy.
08:04 And this is one of the areas of partnership with Adani, for example.
08:09 So energy and infrastructure, and then there is smart city.
08:13 The government of India has launched a huge number of smart city projects.
08:18 I was mentioning Jaipur.
08:19 I love because of Jaipur.
08:20 But that's not the only beautiful and interesting city in India.
08:26 And in order to make the traffic, but also the air quality better in India, smart city
08:31 projects where you have the virtual twin of the city to optimize everything for the city
08:35 is an amazing way to improve the quality of life of citizens.
08:40 And I think the Indian government has really understood it and is now launching this kind
08:45 of project.
08:46 And that's very interesting for companies like Dassault Systems as well.
08:50 So when does Jaipur become a truly smart city?
08:52 By what year?
08:53 Well, we're working on it as soon as possible.
08:56 I hope to come back as soon as possible as well.
08:58 Yeah, but is there a finite timeline to things like these?
09:01 I'm just trying to understand.
09:02 The problem is that we are basically working on virtual twin like Jaipur, but all the city
09:08 projects.
09:09 Let me give you the example of Singapore.
09:10 Singapore, we began working with them in 2012, working on the virtual twin of the city first
09:17 for the traffic simulation.
09:20 And then we did that for the traffic simulation, but they wanted to extend into quality of
09:25 air, air pollution and air simulation.
09:28 So we did the air simulation after the traffic simulation.
09:31 And then after that, they wanted to expand into the expansion of Singapore.
09:36 What happens if there are buildings?
09:38 So what I'm trying to say is that to begin with a use case, and then you go to another
09:41 use case, and I think it's a never ending story.
09:45 But each time it improves the quality of life of the citizens.
09:47 And that's the ultimate goal.
09:49 But one city, for example, does it take about 10 years to...
09:52 Oh, no, to get...
09:53 It depends.
09:54 Of course, it depends.
09:55 If it's a new city, like I would say Neom in Saudi Arabia, you begin with a virtual
10:00 twin of the city before even building the city.
10:02 So it's super quick.
10:03 If it's a city like Jaipur, or I love Mumbai as well, Mumbai or Bengaluru, or Pune, where
10:10 we have our R&D center, then you have to digitalize the city first.
10:14 It can take a few months to digitalize the city, depending on how precise you want to
10:19 be in the digitalization of the city.
10:21 For example, Singapore, we also use a virtual twin to do simulation in case of earthquake
10:28 or in terms of tsunami.
10:29 And for that, you need very precise virtual twin with the right materials for each of
10:35 the building.
10:36 So depending on your use case, you need more or less precision and it takes more months.
10:42 But it's a matter of months.
10:43 It's not a matter of years.
10:45 If my memory serves me right, virtual twin is where your specialty is, right?
10:48 Yeah.
10:49 Okay.
10:50 My final question.
10:51 You are helping Indian companies develop new cars and trucks.
10:55 You kind of, Dassault Systems is working with Indian companies to develop new aircraft and
10:59 spacecrafts as well.
11:00 Yes.
11:01 Talk to us a bit about this mobility piece before we wrap up this conversation.
11:03 Well, it's so interesting because I think when it comes to frugal innovation in electric
11:08 vehicle, India is a country with the highest cost because you are really bringing to the
11:15 market new electric vehicle.
11:16 We are working with Mahindra on that and I'm meeting the chairman of Mahindra tomorrow.
11:22 But we are also working on electric scooters, which is really a specialty of India, if I
11:27 may call it that way.
11:29 And it's super interesting.
11:30 But you were talking about space and here it's a topic I really love because what India
11:35 has achieved in space, really going to the moon many times.
11:39 Yes.
11:40 Like 10 years ago, India was not well known as a space actor.
11:44 And now, since you've been to the moon, you really are one of the big states to do so.
11:52 And we are working with a lot of space startups, but also with ISRO in order to help you go
11:59 even further.
12:00 And I think the innovations that are going to happen around space, space startups and
12:05 innovation around space is going to be one of the most interesting sectors to follow.
12:11 OK, well, maybe next year, this time when we talk, we'll talk a bit more in detail about
12:15 this.
12:16 But Florence, for now, thank you so much for speaking to us.
12:18 And I love it that you love India.
12:20 I love you India.
12:21 Thank you so much.
12:22 Thank you.
12:23 Thank you.
12:24 And viewers, thanks for tuning in.
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14:51 [MUSIC]
14:58 At the World Economic Forum meet and certainly on the sidelines in Davos,
15:02 Switzerland, artificial intelligence,
15:04 the future of digital infrastructure rollouts, technology at so many levels.
15:08 Some of the key issues being raised, we've got a wonderful guest with us,
15:11 the Minister Ashwini Vaishnav, thanks very much.
15:13 >> Hello.
15:14 >> Besides being minister,
15:15 these are themes that genuinely interest you, excite you as well.
15:19 One of the key issues for India going forward will be semiconductors and
15:24 resilient supply chains, obviously.
15:26 How is that key to some of our future plans?
15:29 >> So semiconductor is a foundational technology.
15:32 Everybody here at Davos is like, they are people,
15:35 senior people who are really concerned about the resiliency of supply chain.
15:40 Semiconductors go into practically everything that we manufacture these days.
15:44 So there is a lot of excitement about India's entry into the semiconductor
15:48 industry.
15:50 People appreciate the focus on talent that we have done.
15:54 The industry leaders appreciate the focus on design that we have done.
15:59 People say that the first few steps that India has taken are
16:03 absolutely the right steps.
16:05 People are very happy with the progress of the Micron plant because within 90
16:10 days, glad, the construction began.
16:13 So that's something which is giving a lot of confidence to the world,
16:17 to the global semiconductor industry.
16:19 >> Yeah.
16:20 From a geostrategic standpoint, this is also critical, isn't it?
16:23 Because the availability of semiconductors has been limited to a
16:26 couple of countries.
16:27 We have a huge demand and we want to ensure that it is available for our
16:31 industry when we need it.
16:33 >> Absolutely.
16:34 And that's why we have put so clear focus on developing a comprehensive
16:38 ecosystem for semiconductors.
16:40 And we have been supported and helped by some of the topmost leaders in this
16:44 field across the world as part -- who have become members of the India
16:48 Semiconductor Mission.
16:50 So that is giving us very good -- and today, the interactions I've had with
16:56 the industry leaders, they believe that this is the time when you can take the
17:00 next leap.
17:01 The next leap is basically starting projects to design some of the key chips
17:07 that are needed in today's world.
17:09 For example, for telecom.
17:10 For example, for processor.
17:12 For example, can you decide, can you start working on your own GPU?
17:16 These are the kind of inputs which are coming from the industry.
17:19 That shows the level of confidence which industry has on India.
17:22 >> And so this is something which India would be able to supply to the world,
17:25 not just our industry going forward.
17:27 >> Absolutely.
17:28 >> And GPUs, semiconductors, and a lot of that, displays, for example,
17:34 going out.
17:35 So it would also set up a huge ecosystem in India with the generation of
17:38 thousands of jobs.
17:39 >> Absolutely.
17:40 This is a global industry.
17:42 What you design and manufacture in India can be used anywhere in the world.
17:46 And given the geopolitical strategies and constraints which people are feeling
17:52 all over the world, people have huge trust.
17:56 The global industry has huge trust on India.
17:58 And that's where Prime Minister Modi's work on the foreign policy and the kind
18:03 of trust he has developed across the world has really played out.
18:07 So that trust is very important.
18:09 >> So the issue, one of the key themes in Davos this year is artificial
18:13 intelligence.
18:14 The question which a lot of people have back home certainly is that if there is
18:17 more AI, then it means that there may be fewer jobs or people will be
18:21 retrenched.
18:22 How would you address this concern?
18:24 >> There are two aspects of every technology that comes in.
18:28 There will be transitions in the industry, this is the new technology.
18:33 So a lot of productivity gains will be there.
18:36 There will be lots and lots of complex challenges which can be addressed,
18:40 for example, climate change, for example, new drug discovery, for example,
18:43 disease prevention, for example, getting earlier detection of diseases.
18:49 All those things are, for example, agriculture.
18:53 So these are the things in which AI can play a very positive role.
18:58 Yes, there will be other negative aspects of the technology like every other
19:02 technology.
19:03 When it comes, it will have.
19:06 What we need to do is we have to see how can we harness the positive things
19:11 and how can we save our society and the country and the economy from the
19:15 negatives.
19:16 >> Well, wonderful.
19:17 Thank you so much, Minister, for sharing your thoughts on so many issues.
19:21 It's been an interesting WEF and Davos for all of us visiting from India.
19:27 Thank you very much.
19:28 >> Thank you.
19:29 >> Thank you.
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