The Age of India

As of January 2023, more than 8 billion people live on Earth in almost 200 different countries. The United States makes up a mere 4.2% of the world’s population.

Zooming out, the U.S. represents but a fraction of our great minds, ideas, and fountains of innovation. As our planet becomes increasingly globalized in terms of trade, workforce, and technology, we must look at ourselves as only one of many players in this diverse ecosystem.

While many of the U.S. news cycles focus on relations with China and the EU, 8000 miles away an economic juggernaut has emerged. India, which became the world’s biggest country by population in 2023, is set to also become one of the top three largest economies in the 21st century. 

More than four times the population size of the United States, India has become a leader in technology, energy, and manufacturing. Its rapid development has even led Amazon Founder Jeff Bezos to famously remark, “I predict that the 21st century will be the Indian Century”. 

Yet, 40% of Americans have never heard of India’s Prime Minister Narendra Modi. How is it that almost half of the people in the U.S. have no idea who the leader of the biggest country on Earth is?

As talent pools, communities, and relationships in the U.S. also become increasingly diverse, learning about the rest of the world will allow us to be better coworkers, friends, and citizens. 

I believe India is going to be pivotal in shaping our planet this century. So, how has India progressed in the last 50 years, and why does it matter?

Infrastructure

When observing civilizations of the past, an astute example of their power can be seen in what they have built that has stood the test of time. Some examples that come to the top of my mind are the ancient Egyptian Pyramids and the Sphinx of the Old Kingdom, the Roman Empire’s Coliseum, and the Acropolis of the Athenians.

While these monuments may merely be the perfect spot for your next Instagram post today, they point to the fact that great empires were life-lined by intelligent design and development.

Strong infrastructure provides the necessary base for the transportation of goods, diffusion of the workforce, and capable institutions across countries. One of the most fascinating examples of infrastructure development and its impact can be seen in Singapore. Just looking through a few photos linked or the one below, one wonders at its lush green spaces, complex transportation networks, and impressive architecture.

Despite being only 720 square kilometers, it boasts almost 6 million full-time residents, is a world financial hub, and is home to the globe’s “smartest city” by IMD in 2023. Strong centralized planning led Singapore to become one of the most impressive countries today.

Like Singapore, India recognizes how crucial strong infrastructure will be if it is to effectively grow and support the transportation of its 1.4+ billion inhabitants. India has invested tens of billions of dollars in transport and telecommunication infrastructure efforts over the past two decades. A quick look at data from The World Bank shows steady increases in railway goods transported and electricity access across the country.

As the link above shows, 99.6% of Indians today have access to electricity compared to only 60% of Indians in 2000. These positive trends in domestic trade and electricity access are largely attributed to Indian investments in critical infrastructure.

As part of India’s National Infrastructure Pipeline (NIP), the nation has committed roughly 1.3 trillion USD to development efforts with several projects currently underway. India’s strategic infrastructure investments through the NIP will allow its large, mobile, and extremely young population to travel to various economic hubs around the country, spurring widespread economic and commercial growth for years to come. 

Information Technology

In the last couple of decades, the digitization of business and trade has demanded global corporations to completely reshape how they communicate with customers, manage their data, and plan for future business endeavors.

One of the biggest ways in which companies have pivoted in the digital age is through the use of Global Capability Centers or GCCs. In a nutshell, these organizations act as the nucleus of a business by providing IT services internally and externally to customers, conducting research, and supporting business development. 

The use of GCC’s was pioneered by large corporations in the 90s such as General Electric and American Express who aimed to offshore their operations to reduce costs, attract talent, and ultimately grow their market shares internationally.

Due to India’s high density of young skilled professionals and low labor costs, it has quickly become the dominant player in the GCC space. In fact, as of 2022, India held more than 55% of all GCC’s. The collective value of this industry in India is 47 Billion USD and is expected to rise by another 110 billion by 2030. With such a big marketshare in this key area, the Indian GCC market is snowballing, attracting industry leaders like Google, Citi Bank, and many other international corporations to set up their own centers in the country.

Apart from its GCCs, India has an incredibly strong startup network. Due to efforts from Prime Minister Narendra Modi through the Startup India Initiative and providing upskilling opportunities for young entrepreneurs through the National Skill Development Corporation, India is now the third leading start-up hub on the planet. The country boasts more than 90,000 startups and 100+ unicorns (private companies valued at more than 1 billion dollars) across a broad range of sectors from healthcare to manufacturing to technology. 

This thriving startup scene is heavily supported by India’s remarkable talent pool, producing millions of qualified STEM graduates each year. The sheer amount of new engineers and IT professionals the country provides annually makes it the second biggest supplier of tech talent on Earth. 

From India’s hold of the GCC market that is supporting top businesses globally, to its large STEM talent pool building the planet’s most promising startups, India is demonstrating its unwavering commitment to growth. 

Population

Above all, the most influential factor that will propel India’s economy and development to unseen heights in the 21st century is its population demographics. 

Around the globe, people in the richest countries today are on average much older than those in the same countries decades ago (a fascinating interactive article on this trend can be found here).

For example, take the East Asian island country of Japan. In the last 50 years, Japan has not only become one of the planet’s leading economies but also the oldest large country in the world. By 2013, over 25% of the country’s population were people above the age of 65. 

Japan is not unique in its geriatric state. Germany, Italy, Monaco, and many other affluent countries today have the oldest populations on Earth and will only get older as birth rates fall. These countries experienced rapid growth in the 20th century in large part due to their young demographics. Having a lot of young, working-aged citizens allowed for greater productivity. This ultimately raised GDP per capita and overall standards of living. Couple this with lower birthrates and you have a population where people were and are living on average for much longer.

As countries become more wealthy, hold a greater focus on leisure, and produce fewer young workers, the economy actually shrinks. Smaller economic growth, stagnation, and even decline in the long run will likely worsen standards of living as time moves on in the richest countries of today.

Now, many of these rich countries like Japan or France will continue to benefit from their economic success for decades and can continue to thrive through technology adoption. However, young countries, like India, are growing exponentially and will quickly propel them to dominate economically.

Only last year in 2022, India became the biggest country ever, surpassing China with its 1.45 billion citizens. Of these citizens, over 1 billion are within the UN’s standard of working age (15-65 years). Currently, India contributes more people to the growth of the global working-age population than any other single country.

India’s relatively high number of young workers and low percentage of older citizens has allowed the country to progress rapidly in the 21st century. Its meteoric development will soon launch the South-Asian nation to surpass Germany, Japan, and eventually the United States to become the second-largest economy in the world by 2075.

So What?

The rise of India’s IT sector, industrialization efforts, and population, have buoyed India to new heights. In fact, due to these developments and others, the United Nations has found that from 2006-2021, India lifted more than 415 million people out of poverty. Hundreds of millions of people out of poverty in 15 years!

While India still has a long way to go, its success over the last half-century demonstrates how countries can create positive change at scale through proper planning, capitalizing on their strengths, and diversification.

Now, we shouldn’t go on believing everything Jeff Bezos says, but the exciting progress India has displayed and its future signs of promise signal that the 21st century will be the Indian century.

-John Henry

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