I travel a lot, so I read a lot. As I made the journey to this year’s India Economic Summit, I read a number of articles that questioned what good digital disruption and the internet of things are to the world’s majority – especially when most people don’t have access to electricity, education, shelter and public healthcare services. Or even a toilet. The question is particularly relevant for India, a country that has made huge advances in digital technology recently, while still grappling with basic infrastructure challenges.
How can India make the most of this new technological age, this so-called fourth industrial revolution, while still dealing with pre-industrial problems? And where can companies contribute the most to finding solutions?
India is now the fastest-growing of the world’s large economies. Its challenge is to sustain that performance, provide jobs and ensure steadily rising incomes. It will be a tall order to become a $20 trillion economy – 10 times its current size. There is no global blueprint for success; each country must chart its own unique path to prosperity. And India needs to do this at a time when digital innovations are rapidly transforming global industry.
The country’s growth outlook is strong, and business confidence is rising. The new wave of economic reforms shows the government’s commitment to increasing transparency and improving the ease of doing business. But India still needs to undergo basic development if it is to meet the growing demand of the Indian population. Areas that need particular attention are:
• Jobs for young people (since 45% of the population are below the age of 25)
• More traditional manufacturing (it makes up only 17% of GDP)
• Easier access to affordable, quality healthcare (infant mortality remains high)
• Training to keep the country competitive (skilled workers account for only 2% of the workforce)
We all know the challenges. So what gets India to the next level?
1. A solid foundation of strategic infrastructure
Companies such as General Electric need to work together, and in cooperation with the government, on affordable and reliable sources of electricity, clean water, sanitation and healthcare. These infrastructure decisions and their implications last for decades; for lifetimes. Digital solutions, especially, can unlock value across India’s economy and eliminate major inefficiencies.
2. Traditional manufacturing as well as digital technologies
India must take a pragmatic approach to quickly boost old-school manufacturing, and at the same time it should adopt new digital industrial technologies that will secure long-term competitiveness. Digital advances can help India increase the efficiency of its traditional industries, while helping it to develop newer cutting-edge technologies.
To create more job vacancies, India must first participate in global markets. In producing goods that can be traded with the rest of the world, the country can more rapidly generate high-paying jobs, while also allowing workers to learn valuable skills.
4. Human capital development
Training and development programmes are great for building local capability and ensuring a long-term vision for the country. India needs to strike the right balance between equipping its workforce with digital skills (by boosting education in data science and coding) and traditional manufacturing skills. Private companies have a key role to play in this. It includes:
• creating highly skilled sustainable jobs
• making use of research and manufacturing networks across the country
• developing local supply chains (small and medium-size companies will be central to this)
• investing significantly in training and development.
Traditional versus digital
The fourth industrial revolution plays to India’s strengths. The country has a natural advantage in digital technologies, ahead of many other countries. By putting the two pieces of the puzzle together, it is possible to redefine what industrialization actually means for countries such as India. It means digital connectivity, new materials and smart manufacturing. And it also means traditional manufacturing and vocational skill development.
The India Economic Summit is taking place in New Delhi, India, from 6-7 October.