I’m reading two fascinating books on India that are making me think again about the country’s economic relationship with the West.

The first is “Imagining India by Nandan Nilekani, CEO of Infosys, and the second is “India‘s Global Powerhouses” by Nirmalya Kumar at London Business School

The most powerful take-away from these books is that Indians may be the future of the global workforce

The West and also China, due to its one-child policy, are facing the reality of smaller workforces supporting aged populations. This means lower total output, less saving and investment, and slower economic growth. 

The baby boom that fueled decades of prosperity is over in the West and slowly ending in China, while India is in the thick of its own demographic boom, projected to last until about 2050. According to Nilekani’s sources, by 2020 India will have an additional 47 million workers, a number equivalent to about 1/3 of the total US labor force and roughly equal to the projected aggregate workforce shortage in the West. 

To boot, India is already graduating far more engineers and technical professionals than Western universities, and Indian-owned companies often spend far greater amounts on training than their Western counterparts, in order to keep employees’ skills updated.

If that wasn’t enough, aided by the scale advantages associated with operating within such a massive domestic economy, and because of the need to serve relatively low-income customers, many Indian companies have developed unique low-cost business and operating models that allow them to be massively profitable on a global stage. Those profits are fueling increasing numbers of large acquisitions of Western firms (see Kumar for more on this). Suddenly, more and more workforces across Europe and the US find themselves working for Indian bosses.

It’s easy to get overly bullish on India. There has been a great deal of hype surrounding the country and its economic potential, and slow change has caused many of us to become skeptical. Still, fundamental indicators continue to suggest that India’s economic transformation is slowly but surely changing the global stage. 

Posted via email from Human Ventures

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