India is poised for significant growth for years to come due to a combination of global economic shifts and a strong local policy, said Christoph Schweizer, the new CEO of consulting firm BCG. Although a global economic slowdown may impact growth in the near term, the country will remain an independent economic powerhouse, Schweizer told Vinod Mahanta in an interview.

Previously seen as catching up with the rest, it now appears to be leading the way, he said. Schweitzer also spoke about the Indian economy in the context of worldwide uncertainty, and the change in perception of the country as an investment destination, on BCG being the consulting market leader in India, the scrutiny that management consultants are facing globally, and the EY split. Edited excerpts:

India seems to be bucking the global recessionary trend. Given the global economy’s interconnectedness, will the global slowdown catch up with India, or will it be able to maintain 6% growth?

It’s a very connected global economy – and India is a very connected economy. So, is any place in the world immune to economic shocks and recessions? No, neither is India. India is at a 6% plus growth base, and even if there were a significant recession in Europe and the US, it would have an impact, but the growth won’t go down to low single digits or negative.

I think India is poised for significant growth for many years to come. To some extent, it’s related to the rest of the world, but it has also become an independent powerhouse. What has worked for India is a combination of global economic shifts and strong local policy support like the PLI programme.

You have been visiting India over the last 20 years. Do you see lately any shift in the perception of India as an investment destination, especially after the Covid-19 pandemic?

There’s a complete mindset shift regarding India. I think India is not only a big economy, it’s also demographically in a very good spot.

Europe, US may see short recession

You could say it’s one of the healthiest democratic economies you find anywhere in the world, with many young people actively getting into the workforce and without major aging challenges. Secondly, the continued investment in infrastructure and innovation in India is paying dividends. Global companies look at infrastructure, especially digital infrastructure, and how long term and stable the government’s policies are.

In my early years coming here, it always felt a bit like India was catching up very quickly, but now it feels like India is a leading-the-way country in so many ways. We see it in the tech and IT industries; we see it in the healthcare and pharmaceutical sectors; and we are seeing it more and more in manufacturing. There are early steps in climate technology and hydrogen. The innovation spirit and mindset of India has massively changed. India is much better positioned now as an investment destination.

What’s your prognosis for the global economy for 2023?

It’s never been harder to predict how next year’s economy is really going to look. Very few people actually remember high inflation in the western world. What history teaches us, however, is that inflation can be a very toxic and dangerous thing for overall economic stability and, as a consequence, for political stability.

While the inflation rates may look relatively comparable, the underlying reasons and drivers are fundamentally different. In core Europe, it’s largely energy prices and, to some extent, food prices that drive inflation, and a lot of that has to do with the war in Ukraine. The drivers of inflation in the US are completely different: It is a kind of long-term increase in factor costs, in particular in labour, which is more significant and much more steady than it has been in Western Europe. The US one will be harder to bring under control.

Big parts of Europe are on the verge of a recession, and I think the likelihood is quite high that they will be in one in 2023. The US is still 50-50. Even if there is one, it will be a short one and not that dramatic. China is, I think, fundamentally still extremely well positioned for the long run. Of course, there’s short-term uncertainty about Covid lockdowns and real estate dynamics.

In which countries is BCG a market leader in strategy consulting? Does India fall in that category?

BCG is clearly the market leader in high-end consulting in India. Period. We only share revenue and workforce numbers on a global level.

How has BCG India performed in the Covid-19 pandemic years?

BCG India has been a powerhouse for BCG globally, and I am deeply convinced that it will remain so for many years, if not decades, to come. It’s truly been a growth engine for BCG. Secondly, BCG India has truly been an innovation hub. Earlier, ideas and solutions were developed in London, Paris, and Tokyo and brought into emerging markets. At this moment, there’s so much innovation coming from emerging markets, particularly India.

In the BCG Olympics, a competition for the coolest projects and insights, BCG India has been winning way more of those awards in a wide range of topics. Some of our global centres of excellence on certain topics, like family business, are based in India. BCG India is an amazing talent hub for BCG globally.

Management consultants have been under a lot of scrutiny lately for some of the assignments and clients they have served.

I would just say that there hasn’t been a book written about BCG, and there are good reasons why that hasn’t been the case. We have very rigorous processes and policies on how we think about the work that we take on and which clients we serve and which we don’t. Those have been in place for many years.

We turn down work regularly, and in our global partner meeting, we celebrate people who have turned down work in areas we are not comfortable with. I would also say that you can never process and policy your way out of trouble. It’s about the right culture, spirit and philosophy. I can proudly say that BCG is the integrity leader in the consulting world.

For strategy firms, the big shift was when the market moved from strategy advisory to implementation. How has the work mix changed in recent times?

On a global level, our mix of work has changed a bit, but not dramatically. We do work on the biggest topics that keep CEOs busy, as well as their biggest challenges. So what are those? A major question revolves around digitisation and the increasing use of artificial intelligence in business. The second piece is about the impact of climate change and other sustainability challenges on the overall business. The third one is about organisational tales, the future of work, and new organisational realities.

After Covid, many companies are struggling with issues like onsite and work-from-home balance, productivity, and keeping creativity and innovation at a sufficient level. Also, now a lot of work is being done around the whole topic of resilience, including dealing with supply chains, high energy prices, geo-political scenarios, etc.