In conversation with Richard Davies – Innovation in the economy

By UK India Business Council (UKIBC)

Dr. Rakhi Rashmi, Barrister England and Wales in a candid conversation with Richard Davies is Chief Operating Officer for UK Commercial Banking at HSBC

Richard Davies is Chief Operating Officer for UK Commercial Banking at HSBC, and responsible for a range of areas including lending products, business and regulatory change, client onboarding, and digital channels. Richard joined HSBC in August 2014.

Prior to joining HSBC, Richard was CEO of a new entrant challenger bank (OakNorth), and successfully led the process to design the business model, develop regulatory licence submission, and recruit the executive management team to enter the UK SME banking market.

Previously, Richard held various senior roles at Barclays including:

• Managing Director, Global Corporates UK
• Head of South East Commercial Banking
• Head of Strategy, Commercial Banking

Prior to Barclays, Richard worked at Lloyds TSB in Retail Banking Strategy, and at L.E.K. Consulting covering a range of financial services sector projects.

Richard has a MA Economics and M.Phil Development Economics from Trinity Hall Cambridge.

1. What do you see as the major innovation opportunities in each stage of the value chain, work architecture and future constructs of development in the UK-India collaborative universes?

Establishment of appropriate framework conditions for openness in trade and investment will help to promote innovation throughout the value chain. This can broaden the scope for UK-India collaboration.
Building on such a policy foundation, one concrete area for collaboration may be found in the context of the “Make in India” programme. This is the Government of India’s flagship initiative to make India a manufacturing powerhouse ( The programme covers a wide variety of sectors – including aviation and defence manufacturing – where UK companies are world leaders.

2. Given both countries want to grow their economies through manufacturing, and related sectors such as infrastructure, services etc should we identify areas of common interest and come up with a plan to grow our industrial economies together?

The Government in India is focused on upgrading the country’s infrastructure in terms of both reach and quality. In this respect the UK and Indian governments are looking at the Mumbai-Bengaluru corridor, which is similar to the Mumbai-Delhi Industrial Corridor where the Indian authorities expect Japanese companies to be major investors.

Upgrading of infrastructure is an important complement to market openness in services. In turn, access to improved services can play an important role in the development of the manufacturing sector. Competitive services inputs can contribute to improved innovation and product development processes and to the overall functioning of manufacturing enterprises.

3. What is the best way to develop this interaction/dialogue to its next stage?

Projects such as infrastructure development can be used to build public-private dialogue and interaction in favour of economic development. The objective could be mutual leveraging of public and private sector investment, as described in point 2 above.

4. What infrastructure mechanisms could we share or exchange to make a real difference?

Government initiatives such as the ‘Make in India’ campaign or the UK Trade and Industry department’s ongoing provision of information on destination markets can play a valuable role in facilitating business contacts and raising awareness of opportunities related to innovation. These types of initiative constitute an important part of the infrastructure mechanisms for promoting linkages between the two countries.

5. What emerging economic opportunities in each country can we address in partnership?

Development of co-operation in the field of education can yield benefits for both countries. The education system in India (especially at the tertiary education level) faces capacity shortfalls. UK universities are world leaders and they can develop approaches to delivery of quality education in the Indian context (e.g., via a franchise system). But, this will require steps to ensure that there is appropriate recognition of the resulting educational attainment in terms of job opportunities in India and overseas markets.

UK universities and other educational institutes can look to open centres in India to take part in the Skill India initiative of the government. For more details one can click here

Such co-operation in education could complement developments in the private sector. For example, there is already a lot of outsourcing to India by UK businesses. This type of activity could grow in response to improved availability of skills in the Indian labour force, especially in light of the language advantage that India offers vis-à-vis the UK market.

6. What should the role of governments be in this interaction?

The role of governments should be to act as enablers and to provide the broad infrastructure within which the private sector can operate. One area for government action is in the establishment of an appropriate policy framework for innovation in the private sector. Three elements in such a policy mix include market openness, availability of protection for intellectual property rights, and suitable conditions for doing business in terms of regulation and economic policy.

• Openness to trade is an important element in this policy mix in that it enables firms to access the most competitive inputs for use in their innovation and product development processes, while also promoting economies of scale for firms in marketing the innovative products that they ultimately develop.

• Protection of intellectual property rights enables businesses to transfer technology, invest, and trade in knowledge-intensive products. The availability of such protection facilitates the operation of innovative activities and the subsequent diffusion via market channels of the resulting technology.

One timely area for consideration in this regard is protection for trade secrets and business confidential information. Although the World Trade Organization’s TRIPS Agreement addresses this issue, there remains a significant amount of variation in practices and lingering gaps in protection (e.g. with respect to coverage of misappropriation of trade secrets, in some cases). Thus, innovation processes can benefit from steps to assure adequate protection of trade secrets.

• The larger conditions for doing business affect innovation processes, just as they affect other areas of business operation. The World Bank’s Doing Business indicators provide internationally comparable indicators for ten dimensions of this policy space and some countries are using them to benchmark their performance. These indicators cover regulation in such areas as starting a business, paying taxes or enforcing contracts, among others.

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