National Conference Keynote address. Emerging Trends in Mechanical Engineering 2012

1. Emerging Trends in
Mechanical Engineering 2012
Conference Keynote
Dr. Sandeep Muju
Director
KPMG USA
National Conference on
Emerging Trends in
Mechanical Engineering
ETME 2012
AKGEC, Ghaziabad, India
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
July 27, 2012
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KPMG International. 51836SFO

2. Speech Contents
Global Trends
Nature of Firm
Key End-Use Markets & Technology Needs
Mechanical Engineering a core discipline
Innovation a sustainability strategy
Closure
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of
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3. Key Global Trends
Flattening and Boundary-less global market(s) evolution …
Exchange of ideas, information and resources is becoming easier …
Mature developed markets unable to offer “growth” markets …
New growth coming from Emerging & Advancing countries …
Financial resources no longer exclusive to “mega” corporations …
Natural resources getting stretched to Mother Earth’s sustainable limits …
Over 6+ Billion global minds that for most part are “free” to create ideas …
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of
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4. Tale of Two Asian Giants
Emergence of Asian giants - China and India
Combined Population: ~2.5 Billion (~37% of World)
Combined GDP: ~$8 Trillion (~50% of EU or USA by itself)
Combined Average GDP growth: >8% YoY (>2X that in USA or EU)
In <10 years combined “China+India” have the potential to exceed in GDP
and/or purchasing power than either Europe or USA …
The Big Q:
When will institutional maturity in India allow it to achieve its potential ???
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of
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5. Nature of the Firm (i.e, Company)
Nature of the firm ….
 YoY sustainability …
 YoY growth …
 YoY profitability …
 YoY Stakeholder value creation …
Nobel Laureate Coase argues,
 the size of a firm is a result of finding an optimal balance between the
competing tendencies of organic growth (internal costs) and external
suppliers/partnerships (transaction costs outside the firm).
Increasing success tends to reduce risk taking appetite …
Balancing risk exposure with YoY stakeholder value creation …
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of
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6. Evolution of the Firm (i.e, Company)
Based on Darwinian theory of evolution:
“In the natural world, species evolve – that is, they change to meet
new challenges – or they die. The same genetic imperative operates
in business”
- Charles Fine, MIT, Clockspeed
A company is its chain of continually evolving capabilities – that is,
its own capabilities plus the capabilities of everyone it does
business with.
The “innovative” survive and the “fittest” sustainably create value …
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of
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7. 5 Key Market Technology Needs – Indian context
1. Energy
- Non-renewable sources (coal, petroleum, etc)
- Renewable sources (solar, wind, etc)
2. Transportation
- Air (commercial, military, manned, un-manned, space)
- Land (Road based – car/truck, Track based – train/metro)
- Water (commercial, navy, manned, un-manned, deep sea)
- Land/Air/Port Infrastructure quality and capacity
3. Environment
- Air and potable water quality as well as long-term sustainability
- Hazardous and Non-hazardous waste management
4. Food/Agriculture
- Agricultural productivity and food storage
- Perishable goods (processed/raw food) distribution
5. Medical
- Healthcare services quality and capacity
- Pharmaceutical quality and capacity
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of
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8. Mechanical Engineering is a core engineering
discipline with critical and wide-spread utility ...
1. Energy
- Developing new energy production technology and products
- Improving energy generation efficiencies per unit of fuel
2. Transportation
- Developing improved Air/Land/Water transport technology & products
- Improving Air/Land/Water transportation infrastructure and traffic mgmt
3. Environment
- Developing technology and devices for Air and/or Water purification
- Technology for Hazardous and Non-hazardous waste management
4. Food/Agriculture
- Developing technology for food storage and agricultural productivity
- Perishable goods (processed/raw food) distribution technology and infra
5. Medical
- Prosthetics/Implants/Robotic Surgery medical devices
- Pharmaceutical technology and production
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of
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9. An Example: History of Mechanical Engineering in
Air/Land Transportation
Rafale India
2012
Globalization is a fairly recent phenomenon, COMAC
Microsoft 2008
?
historically speaking … EV
1975
AeroVironment 1970s-
IAI UAVs 1971 First UAVs 2000s
1970s ~1960-90
Airbus Aryabhata
NASA 1960s Internet
Apollo 11 1975
Boeing 1958 Sputnik 1969
1970-90s
IBM 1916 1957
1911 Telegraph
Marconi, 1909
First Manned Flight
Automobile Wright Bro, 1903
Benz 1886
Steam Locomotive
Battery Trevithick, 1804 Innovation is was a slow process ….
Volta, ~1800
Steam Engine It is “Revolutionary” when it happens ..
Savery, 1698
It is “Evolutionary” in the meantime ..
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of
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10. A Firm makes and delivers product and/or services
through a business value chain ...
Value Chain:
Michael Porter, HBR
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of
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11. For a Firm “Innovation” is the way to ensure
sustainability and continued relevance ...
Is Innovation about product and/or technology ???
Innovation … Who is supposed to do “that”?
Should internal teams of engineers, product marketers, and R&D personnel
be charged to develop new ideas for technology product and/or service
Or
M&A and Strategy folks should acquire “innovative products/services” from outside?
… and Why?
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of
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KPMG International. 51836SFO

12. Innovation is Multi-dimensional and Multi-faceted ...
Engineering/Technology innovation is a critical element
in overall business value chain and often drives the rest …
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of
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KPMG International. 51836SFO

13. Opportunities for New Engineers ...
Speed of Innovation has been increasing ….
With lower entry barriers globally, new entrants can emerge faster ….
Tremendous possibilities for new ideas and creation ….
Purchasing power is rapidly increasing in the “Developing” world …
Ability to bring idea to reality increasing with increasing global financing …
Tremendous opportunities for Mechanical Engineers
to develop innovative technology and products
for global as well as local Indian utilization
(Energy, Transportation, Environment, Agriculture, Medical, etc) …
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of
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KPMG International. 51836SFO

14. Closure ...
“To laugh often and much,
to win the respect of intelligent people,
to earn the appreciation of honest critics,
to appreciate beauty, to find the best in others,
to leave the world a bit better.
This is to have succeeded.”
- Ralph Waldo Emerson
Thank you
Dr. Sandeep Muju
KPMG LLP
Los Angeles, California, USA
© 2011 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of
Cell: 323-947-7029
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of
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KPMG International. 51836SFO