McKinsey Director urges urbanisation and productivity revolution by 2047

  • Industry News
  • Dec 15,23
Chris Bradley points out a demographic contrast with China, foreseeing a decline in China's workforce due to aging, while India is expected to witness an increase of at least 220 million workers through farm migration.
McKinsey Director urges urbanisation and productivity revolution by 2047

Chris Bradley, the director at McKinsey Global Institute, underscores the pivotal role of India's dynamic young workforce in the nation's ambitious aim to attain developed status by 2047. He contends that India's active participation is indispensable for global prosperity in the coming years, stating, "The world in 2050 cannot be prosperous without India participating in it," during an interview with a media group.

Bradley points out a demographic contrast with China, foreseeing a decline in China's workforce due to aging, while India is expected to witness an increase of at least 220 million workers through farm migration. This demographic shift is anticipated to significantly impact the global labour pool, favouring the Global South.

However, Bradley emphasises the necessity for India to leverage this demographic change by encouraging more people to migrate to urban areas and boosting productivity. He underscores the inadequacy of India's current labor productivity, which lags behind global demands, with levels at 1/8th of Japan and 2.5 times lower than China.

To tackle these challenges, Bradley argues that India must double its urban population and undergo a productivity revolution, necessitating increased capital. While India's urbanisation rate is less than half of China's, Bradley asserts that access to capital should not be a hindrance, citing India's healthy balance sheet and its capacity to sustain a large public government deficit with high growth.

Bradley identifies domestication and rural concentration as hurdles the Indian government must overcome. He also stresses the significance of investing in research and development to enhance India's R&D to GDP ratio, which currently falls below the OECD average.

Highlighting India's role in global value chains and its energy needs, Bradley asserts that India requires at least five times more energy per capita to achieve first-world status. He believes that India, alongside China, will shape the pace of global decarbonisation.

While acknowledging India's potential in services exports, Bradley suggests that India should focus on Artificial Intelligence (AI) rather than viewing China as a primary export competitor. He advises India to navigate the transition to a developed country, considering the world's emphasis on green energy, capital restrictions, access to free knowledge, and the ascendancy of AI.

Source: Indiatimes

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