>>abirached: this week on world business >>: india needs power to progress, why the country rapidly needs to expand its energy sector. >>: i think power is possibly unparalleled in what is required now. >>: why the property slump in dubai may not be as bad as everyone believes. >>: two thirds of all the projects within the uae are ongoing and still under construction. >>: and will the west run out of scientists as kids stop studying the subject. >>: in the late 80's about 45,000 people a year took a level physics. that number is down to about 25 to26,000. that's a huge drop! >>abirached: hello and welcome. i'm raya abirached and this is world business, your weekly insight into the global business trends shaping our lives. the indian economy is expected to grow at 6.2 percent this year. but this could be derailed because of the country's chronic power shortage. however india is addressing the issue, bringing online an additional 80 gigawatts of capacity in the next 18 months. >>reporter: on an arid expanse of coastline in western india, the giant smokestacks of what will soon be india'slargest power plant loom in the distance. this is the flagship of adani power, an infrastructure company that raised 600 million us dollars from the primary market recently to fund its power projects. >>desai: it's almost a no-brainer that if india has to achieve a certain economic growth, this has to be preceded by infrastructure growth. various elements are ports, roads, power, airports...i think power ispossibly unparalleled in terms of what is required now, what is the gap, and what will be required in the 5 to 10 years, anthe gap gets widened...and then also when it achieves a mature cycle it will continue to have fairly sustainable and strong demand. >>reporter: with thermal power plants coming in for criticism over global warming, the 4,600 megawatt plant usesmore efficient technology to generate power from coal. >>trivedi: we've gone for super-critical technology, so boiler is super-critical boilers. that means that 5 percent less coal is burnt to get the same amount of power, if you compare with sub-critical. that indicates that co2 emissions will be reduced considerably. >>reporter: but, in india power producers cannot sell electricity directly to consumers, only to government-owned state electricity boards which are often bankrupt. the private sector is therefore still reluctantto invest heavily in power projects and the country faces a power shortage of arnd 13 percent dueto rising demand. generating capacity is only part of the problem. >>chikermane: the reform process in allowing the distribution to take its own course, or the reforming of state electricity boards - which are the primary purcsers of electricity - or the transmitting of user charges onto the end-consumers so that he who consumes power pays for it, has not happened. >>reporter: of the power that does get generated, 25 percent is lost in transit due to large-scale theft and poor infrastructure. but this can be reduced by attracting private sector investment to improve the distribution network and control the losses. >>chikermane: the other reform has to be done in the area of transmission and distribution, which used to contribute to 40 percent of india's losses some time ago. today it is down to 25 percent. i think that's a big, big jump, but it's not enough. it needs to come down even further. >>mohnot: we've seen a lot of examples, whether it's mumbai or delhi or ahmedabad or bhiwandi, where private players have come in and reduced losses significantly within 3 to 5 years. so there are 2 ways to reduce losses: one is to get private players to come in, which will reduce the investment of the government and also give them the opportunity to reduce losses; secondly to invest in creating the best network in terms of the right kind of meters and conducting insulators, which ensures that losses get reduced because of pilferage and theft. >>reporter: in 2006, the indian government granted several large power projects with over 4,000 megawatt capacity to the private sector through a competitive bidding process. india plans to add 78,000 megawatts of power generation during the five years ending march 2012. this will bring billions of dollars investment by leading equipment majors for manufacturing power generation sets in india. >>kumar: only few countries in the world do epc - engineering, procurement and construction and also manufacturing. not only do we produce the boiler and turbine, but also the entire range of ancillaries required for boiler and turbine. so we are an integrated manufacturer of the whole range of turbines and boilers. so that makes us a comprehensively single-stop solution for any service provider. >>reporter: india's biggest power-equipment maker, state-owned bharat heavy electricals already has 75 percent of the market. to meet the increased demand, it is raising its production by 50 percent to deliver power equipment with a total capacity of 15,000 megawatts a year by the end of the fiscal year. >>kumar: the new projects will be in the range of 14,000 mw per annum of thermal capacity. so unless we have a capacity of 20,000 we cannot service this. we want to be an international player also - we want tosupply to other countries as well. so we are ramping up our capacity to 20,000 mw per annum by 2011. >>reporter: and other indian companies have their sights on the overseas market as well. kalpataru power transmission is a leading player in the design and construction of transmission lines. it is already targeting 25 percent annual growth for the next 5 years. >>mohnot: today the largest market continues to be in india for us, because the kind of opportunities in powersector in india are huge. but the international market is also a huge market for us. in the last 3 years we have grown by approximately 50-60 percent in the overseas markets - the entire african beltis a big market for us, the entire middle east and gcc, the gulf countries are a big market for us.we're also providing towers to australia, us, and we've also supplied in the past to canada. >>reporter: all the players are keen to solve india's power problems - it's important ey act quickly. a recentreport by mckinsey and co. warns that india's impressive economic growth could be derailed because of its power shortage, with over 40 percent of the population still living without electricity. thisis a powerful incentive for any democracy, to provide power to the people. >>abirached: last year it was apparent that many of the exhibitors at dubai's biggest property exhibition, cityscape, were, at best, in denial. this year, following the crash, the event was, naturally, a much moresubdued affair but, still to paraphrase mark twain, the rumours of the death of dubai's property market have been eatly exaggerated. >>reporter: there's no question that the exhibition halls at cityscape dubai were a lot quieter this year. >>marwaha: the exhibition floor space is down by around 30%. we're down by a similar figure in terms of the number of exhibitors specifically. >>reporter: in the end attendance was down some 50% - not that surprising given the fact it's been a very bad year for real of the gcc - although it's the decline of dubai's once red hot property market that has drawn the most attention. >>ohan: we've seen a fall in real estate values of up to fifty per cent in some locations. >>morgan: it's fair to say there has been a huge contraction over the past twelve months. values have decreased. >>reporter: there's certainly a lot less activity on many of dubai's building sites these days with work on numerous developments either having slowed, stalled, or, in some cases, been quietly cancelled. >>marwaha: the latest reports indicate that 66 per cent or two thirds of all the projects within the uae are ongoing and still under construction so perhaps one third is out on hold and they've decided not to goahead. >>reporter: the belief is though, at least among the analysts at the exhibition that, while the dubai market mayhave a little further to fall- particularly in the commercial sector - the worst is now over. >>albert : if you look at the markets in dubai for example there is still a lot of stock and supply coming on in the next year and this may further depress some of the rental rates and indeed sale prices but in terms of overall stabilisation in the market place we are near the bottom. >>reporter: that same sentiment applies across the whole of the gcc, according to ian ohan, of the global real estate company jones lang lasalle. >>ohan: we've just recenty completed an investor survey which was a pool of 225 of the region's high net worth individuals, investors and developers and they unanimously suggested that there would be an improvement in property value and performance over the next twelve to 24 months of varying degrees acrossthe region. >>reporter: the fact that dubai's metro's started operating in september - along with the imminent opening of the burj dubai, the world's tallest building, has also affected the mood of investors. >>marwaha: if you look at the projects nothing is more significant here than the launch of the world's tallest tower, the burj dubai as well as the metro really will put dubai again on the map - as it has been in the last five years. >>reporter: and, despite some of the negative press the emirate has received over the last year the general consensus is that dubai is still very much a place to do business. >>ohan: we asked various regional investors to gauge nation's across the region, the middle eastern region, for their city competitiveness and in ten out of thirteen indicators dubai came up as number one which was really talking about such things as city infrastructure, openness of the market, availabilityof product. >>reporter: while the fall in rents has also meant that dubai has become a more attractive location. >>ohan: dubai became in 2007/2008 one of the most expensive real estate destination in the world which actually made it somewhat uncompetitive. it became very difficult for businesses to enter, very expensiveand the qualy of life on a macro economic standpoint became chlenging even though we were in a very aggressive economic period. >>morgan: now rents are down to fifty or sixty per cent of what they are and you can actually get space and it's available and residential accommodation is available for your staff and it's far more attractive than it was. >>reporter: usually cityscape dubai would feature the announcement of some new grand project -- this year that didn't happen - but there was other news such as, for the first time in the exhibition's history, an iraqi company showcasing a real estate project. >>michael: we're offering over 1,500 budget, detached housing, that gives people independence at very, very lowcost. but it's a very comprehensive house. people need this, and we're only covering merely 1% of iraq's total need of this sector. >>reporter: another prominent feature of the exhibition was the continuing gcc interest in asia as an investmentdestination. with oil rebounding to higher prices many of the gcc's sovereign wealth funds are, again, increasingly liquid and in investments such as iskandar malaysia - a vast, mixed use economic zone, three times the size of neighbouring singapor has already pulled in some one point three billion dollars from the gulf, according to its ceo, harun johari >>johari: malaysia is a muslim country so there's a familiarity. the gcc investors will be very familiar - so it's easy to do business. >>reporter: that common ground is emphasized by a push towards islamic finance: >>johari: one of the economic clusters that we have earmarked for iskandar is on the financial side and malaysia is overall playing a leading edge in terms of the sharia compliant financial services so indeed there is a lot of potential there. >>reporter: potential that is not limited solely to finance; with some aspects of the development actually aheadof schedule.6 >>ariff: we have been asked to accelerate several aspects of the project as an example lego lanwhich we announced last year that would start operating in 2013 as part of stimulus package that our prime minister announced we've been announced to accelerate and we are now targeting to open in april 2012. >>reporter: and, in fact, according to the developers, the economic downturn has actually created some advantages. >>johari: the interest is still high the reason for that is that fundamentally it's a good place for long terminvestors to actually stay on - in fact some of the existing investors that have committed to invest are taking advantage of the current financial crisis in terms of lower costs. >>reporter: this year's cityscape dubai was certainly a more subdued affair but the hope is that the lack of froth or speculative frenzy means that the next stage of the region's development will soon be back on track. >>abirached: still to come on world business... >>: its geeky image is driving kids away from studying science and yet it might be the subject that saves the world. >>: the big challenges facing us are global warming and where the next sort of energy will come from. >>: punishing, powerful and practically lethal but p1 powerboating is pushing hard for an even greater global audience. >>: the formula 1 of the seas... and the rest in just a moment on world business... >>abirached: science has revolutionised the world. everything from medicine, to electricity and transport came from science to create the comfortable, safe world we now take for granted. but many schoolchildren now perceive the subject as geeky and difficult and are simply stopping studying science. this is leading to a shortage of scientists and engineers which could have serious implications for the future. >>reporter: you might think that the global economic meltdown has been a tough call for world leaders, but according to many leading scientists there are even bigger problems looming. >>main: the big challenges facing us are global warming and where the next sort of energy will come from when the fossil fuel will run out. and those problems will only find solutions with people who have been trained in physics and physics related engineering. >>reporter: but a trend in schools and universities in the west generally and the uk in particular has experts in these fields worried. >>dyson: you have to go look at the figures in universities which are drastically down and we are under producing the number of engineers we need by several thousands. >>main: in the late 80's about 45,000 people a year took a level physics. that number is down to about 25,000 to 26,000. so it's a huge drop! >>reporter: one possible reason for this could be the stereotypical image that many people have of scientists. >>cox: until recently i think it has been seen as esoteric, you know, men in white coats, fiddling around with test tubes. that kind of stuff. >>reporter: another possible reason for talented youngsters not entering the science and engineering fields is that over the last three decades sectors such as finance and banking have appeared more attractive, and financially rewarding. >>: according to british inventor sir jamesyson in order to recapture the fascination and interest in science and engineering, youngsters have to be continually encouraged. >>dyson: you look at 10 to 15 year olds, you see a great fascination in manufacturing, engineering and science which somehow they lose at about the 15 to 16 age and i have a fling that teachers and their parents steer them away from anything to do with industry, science or engineering. >>garnham: it is still seen as something more difficult, more popular with boys and i think we need to address that much younger, we have to work with children 9 to 11 perhaps even younger, work with their parents, work with society more generally. >>reporter: which highlights a major issue facing both schools and universities... >>main: but the really big iss around physics anyway in schools is the shortage of science instructors. >>reporter: increasingly - it seems - physics is being taught by people who are not comfortable with the subject and as a result lack much needed passion to bring it to life. >>main: the simple fact is there are not enough physics graduates to supply the number of instructors. >>reporter: it's a cyclical effect which in the long term could severely hurt the economy and prosperity of the us and europe. >>main: i think in the next few years we are going to see the asian countries getting sharper and cleverer so that means either we have to be cleverer still or they are just going to take over. >>reporter: one solution could lie in how potential young scientists are educated. projects like future morph, launched by the science council may help turn the tide. a website designed to show kids just some ofthe amazing and unexpected places that studying science, technologyengineering and maths could take them. >>garnham: it's also about having a bit more fun, i think perhaps the science community could have a bit more humour when its communicating, so we tried to inject that into the website. >>evans: if they haven't early on understood that science and physics is fun, exciting, can make a really bigdifference in the world, opens up a wide range of careers when you are older, if they don't appreciate that, they may not make those choices. >>reporter: it is also believed that universities should offer more attractive science and engineering courses with more hands on practices than pure study. >>main: we all feel that practical work is a big turn on for people wanting to do science, getting your hands on it. >>reporter: there is however some hope that the situation might actually be improved due to the recession, but the scientific community needs to act quickly to grab those smart young minds. >>cox: i would like to think that if aa result of the crisis, materialism goes slightly out of fashion, we may get a move in terms of people's ambitions. >>reporter: andrew taylor, mager of the isis at uk's world leading rutherford appleton laboratory has already seen signs of this shift. >>taylor: we are taking very bright minds that we were putting into the city. actually it's great to have these minds in science and some of them are coming back. >>reporter: in all there has to be a joint effort from governments and the scientific world to educate the new generation. >>taylor: we might all be geeks, but we are actually quite clever geeks ande are geeks that the economy is going to rely on. >>reporter: starting with getting across the importance of bein a scientist or an engineer for both the future of our economy and life on earth. >>cox: what i hope happens actually is that the people we value in society changes because we all like nicethings, we all like to have money, but if the knowledge generators, the scientists, the explorers come back into fashion and become the heroes again then there will be a sort of silver lining to thiscrisis. >>abirached: just to give you an ea of how quickly scientific research is advancing in the far east, in 2001 south korea filed just under 4000 patents, but in 2008 registered nearly 9000. in the same time the number filed in the uk dropped by over 500 to 3843. p1 power boating is considered by many to be the marine version of formula1. it is fast, exciting and dangerous, but has long suffered from the perception that it is just a rich man's sport. now p1 has big ambitions to expand the sport beyond its european borders into asia and turn it into a truly viable world championship. >>reporter: powerboat p1, the glamour and the glory. >>: over the last seven years over $15 million has been invested in the p1 world championship and, whiletalk of being the third tier of motorsport may be a little premature, what is certain is that it isbecoming an increasingly important marketing platform for the marine industry. >>wicks: almost every element of the championship is underexploited. cars and bike racing have been exploitto the hilt, what you have in power boating is really the third pillar of motorsport, what we are seeing are more brands and more products are seeing the value of being associated with power boating in general and particularly the manufacturers who can use it as an environment in which to test their products and in some of the harshest conditions, obviously racing and then using that as a marketing platform ultimately to sell their products come monday morning. >>reporter: and with action like this it's certainly a touch more interesting that a traditional boat shows. >>fiore: because it has such great exposure worldwide, helps us in europe and all over the world and also ba in the us as well so it's a tremendous marketing tool for us ... our p1 boats are the very same boats that we build for our consumers back in the states and all over the world. the boats that the weraced today was actually a production boat that we took off the line and put race numbers on it andwent racing with. so we sell exactly what we race. >>reporter: yet despite racing with off the shelf products, it's not a cheap sport to enter. >>collins: to set this boat up for the super sport cls you are looking around about half million dollars ... and obviously you've got no insurance or things like that so if things go wrong you got to pay the money to repair it. >>reporter: these costs rise to $1.2 million per season for the evolution class, the bigger of the two tiers of competition. but with a total prize purse of less than $ 50.000 per event ...the attraction certainly isn't a financial one. >>collins: the glamour is nice but the racing is the main part of it for us. we want to come along, we put a lot of time into repairing, sorting the boat, building the boat, so we come along here to race. >>reporter: as a result for teams to truly compete sponsorship is essential. without commercial support, it is no more than just a rich mas sport. at this early stage of the sport's trajectory however, many areseeing it as a good investment: >>luhr: some motorsports are extremely costly and expensive. i think really with p1 and especially with the super sport class, the boats that we race are actually everyday boats ... it keeps costs of the sport within containable levels, there's more and more television rights etc so i think it represents very, very good value for money. >>reporter: the championship itself is currently without title sponsorship and at present relies on an alternative source of funding, venue revenue: >>wicks: which is essentially a fee that a city would pay for us to bring powerboat p1 to town to bring the circus to town. we returnhat value directly back to the city through inward economic investment, through head on beds, through the messages and the positive messages that we put out about that city through our international media platform. >>reporter: the mainstay of which is of course, television, which is crucial for a sport like power boating where it is somewhat challenging to make money from live spectators: >>milns: unlike traditional motorsports, power boating by its very nature, happens out to sea and not in the stadium. and while they have had a few thousand paying spectators and corporate hospitality guests here over the weekend, the key audience is television. >>reporter: an audience which is growing fast. >>wicks: we've seen a 28% increase between 2008 and 2009 with not even finish the season yet. one of our biggest points of growth has come through our partnership with eurosport, who are one of the championships official broadcasters. that gets us into 114 million homes across the continent and sees p1 translated into 26 different languages, which is obviously helping to increase the appeal and popularity of the sport significantly. i am cheap today when i get there it's going to be really expensive for people to come on board. so i think the smart guys are the ones who are going to jump on board now and give me sponsorship. ... we are about that far away from tipping and we will tip and when we tip... it's a roll. >>reporter: what the powerboat enthusiasts will hope is that this roll is more of a wave, than a crash. >>abirached: and last week the championship added another venue to the series, split in croatia which will host the opening round of the championship in april next year. that's it for this week's world business. thanks for watching. we'll see you again at the same time next week.