McKinsey to help set up Digital Capability Centre in India

27 September 2019 3 min. read

India’s planning body – the NITI Aayog – is in talks with global management consultancy McKinsey & Company to develop a Digital Capability Centre (DCC) in the country. The new centre will join a network of five existing McKinsey-driven DCCs that operate across North America, Europe and Asia.

McKinsey first launched its DCC network in 2017, as a series of innovation centres that facilitate first hand experimentation with technology. According to McKinsey & Company, DCCs offer up ‘a unique environment where you can see and touch Industry 4.0 in real life.’ This is done through a simulation of a real-life digital transformation.

There are now five DCCs across the globe, situated in Aachen, Chicago, Venice, Singapore and Beijing. NITI Aayog is now in talks with the global management consultancy to help develop a centre in India, focused on exploring the true potential of Industry 4.0 in the growth of India’s manufacturing sector.

The planning body has previously indicated its willingness to turn to the consulting sector to help implement some of its initiatives. The latest setup with McKinsey reflects action on an increasingly urgent issue in the Indian economy – the relative weakness of the manufacturing sector when compared to other major economies.

McKinsey to help set up Digital Capability Centre in India

While the majority of market watchers place India somewhere near the top of the list when it comes to economic growth, many have pointed out major drawbacks within the manufacturing segment. A.T. Kearney’s global Managing Partner and Chairman Johan Aurik, for instance, highlighted last year that India’s manufacturing sector is not future ready, adding that rectifying this scenario may take several years.

The Indian government’s Make in India campaign is now in its fifth year, and has led to many significant improvements, including increased FDI flows and an overall improvement in the country’s ‘Ease of Doing Business’ index. However, manufacturing in India is still not globally competitive, something that the NITI Aayog is looking to alter through its latest DCC initiative.

The planning body is looking to use the DCC as a point of convergence for industrialists, academics and researchers to collaboratively work towards advancing manufacturing in India. The DCC will then act as a privately operated entity, with the government’s role being limited to that of facilitator.

“However, India is a huge country with diverse set of industries that also includes large number of MSMEs. The challenge, therefore, will be to design a centre which is fit for purpose,” said Rajat Gupta, a Senior Partner at McKinsey in Mumbai to ETNow.