What will India do with 1.4 bn people?
What will India do with 1.4 bn people?
Lot has been written about India being most populous country. Mostly I have come across positive articles. However, how will India handle it's fault lines?
Hello Hello! I am Shantanu and I write weekly on topics in business, marketing, and culture from Singapore. Last week I wrote about launching a global DTC brand in 30 days. It has received 125 views till today morning. If you haven’t read it yet, you can find it below. I am currently working on building traffic for Xandro Lab. I will share updates after a few weeks. Spoiler alert - it’s hard!
To all the new subscribers this week, thanks a lot for showing your support. I hope to keep you informed and entertained (yes, entertained as well 😉). I split the writing into three segment - personal, professional, personal. You will understand as you read this issue. If you are curious about why I started writing, please read my first blog when you are sipping your morning coffee. It is short and refreshing😋
Okay, let’s begin. Heelo heelo! I am writing late this weekend, so tell me how did the weekend go? Apart from it going away fast, duh!
I attended a wedding reception in Hyderabad. A close friend from engineering days got married to his love of life. The event was fun and relaxing, met friends after more than 6 years and still felt the same strong bond. Must say, I missed my parents and family back home after seeing so many families there.
Okay now let’s jump onto the topic for today. Few weeks back, India officially became the most populous country in the world. The world took notice and published reports on consequences of this. Have a look at the headline below.
Interesting, isn’t it? The country produced a few thousand more babies to surpass China’s record and the news media houses across the world have gone crazy. I have seen these perspectives across different publishers -
CNA, the Singaporean media company, is worried about women - mothers and share of women at workplace
NBC News and South China Morning Post are cautious if the population dividend is real.
CNN hypes up the business opportunities that the population size brings.
Japan Times brings up Islamophobia.
Al Jazeera, The Economist and a few others contrasted India’s population control measures against China’s one child policy.
Quite a few talk about high share of young and working age population.
Let’s get this straight. Most kids and their parents aren’t rich. We have 659 mn smartphone users, with 46.5% penetration compared to other countries having at least 68% penetration.
If you get time, read this article about India’s 10 mn California users (digital native and digital spenders) as analyzed by The Ken, a newsletter tha covers business and tech in India and South East Asia. The writer’s research puts the total users with possibility to make online purchases at 80 mn. Yes, in a country of 1.4 bn people, real potential online shoppers at 80 mn. Of course we can disagree with the number but I agree with the message the article shared. There aren’t enough people with disposable income to spend. However, online purchases is not the only indicator. Offline is big in India. Offline distribution has become a new hotbed for startups. Anyways, the point I am making is people don’t have enough money to spend. Even when they do, they don’t spend it. People are frugal for the many reasons. I understand that.
I have had a pretty interesting journey in life to compare to for writing a perspective on this. My family started out in a village in the state of Jharkhand (still one of the poorest places). We first moved to a town in 1997 when my dad rented a small 2 room flat (it was small, very small). He had the foresight to put my elder brother and me in a good school. By god’s grace, he had a job as a teacher and could afford to teach us in a good school. It wasn’t easy to educate few kids and take care of family expenses. We only moved into our own house in 2009. I turned out to be a good student and got into one of the NITs (second rung after IIT, which I lost hope on pretty early). Then moved to Bangalore in 2015 for my first job. My professional career improved drastically after 2017. Got an opportunity at Dubai in 2020 and then went for an MBA in Singapore in 2021.
Look at the journey. Most kids would have to take this journey to succeed. I was a lucky kid.
The point is - it is going to be difficult for the youth to become financially well off. I must tell you that the world has changed from when I was a kid. There are at least 1000x more opportunities today in the Metro cities as well as Tier 2 and tier 3 cities.
I am concerned about how things will change. Work with me here. Let’s look at this objectively.
Where are the challenges for the country?
Education - Primary education is bad, let’s say non-existent. People rely on private schools. Some are good but most won’t make a cut. Secondary education is slightly better. The best is higher education. Public higher education institutes are real good. They are competitive. You see the product of these institutes in India and around the world. What is still lacking is the vocational education. I have seen some polytechnic colleges come up but I am doubtful that current numbers suffice.
Job Opportunities - Now this clearly proportional to the number of business running in the country. Look at pic 2 from World Bank, and you realise that new businesses are being set up at a frantic pace. Is this enough? I am sure not. We also love government jobs as they are stable. I have friends who did not work for 5 years after finishing college. They were prepping for competitive exams that assure a place in the government staff. When I brought this up, some of my friends didn’t find this to be an issue. In fact they were proud of it. I see this as a loss of labour and experience.
Skills of graduates are still questionable. Companies spend huge sums on training their new recruits. Often hiring is based on “trainability” of a candidate. I don’t think it is bad. However, shouldn’t education mechanism change to give students real world skills?
Fierce competition for almost anything under the sun. We call this the “rat race”. I believe it hampers innovation. It’s great for low cost but extremely bad for quality innovation. I have been running away from this forever now. God bless me if I had tried to do an MBA from an IIM. I would still be giving admission tests every year.
Stingy and money-minded - Okay these are harsh words but I believe it’s true. We always look for discounts. Few people care about experiences. We feel proud of our deal seeking behaviour. Businesses don’t want to pay their vendors that would make them profitable. I know a NLP startup which delivered 30% higher ROI (10K USD a month in incremental revenues). The client refused to pay even 100 USD a month in subscription. Non-sensical, right?
Where are the women? Women are still treated as home makers. While this is changing but the gap is too big and the movement too slow.
In spite of everything I listed above, the country is doing well. Its growing fast. People are hopeful. Let’s look at the where are the opportunities -
A sizeable educated and smart population - Irrespective of all the challenges, India still produces one of the highest number of skilled workers in the world. With the AI boom, companies are fighting to get a pie of the AI engineers in India. Read about it here in Bloomberg.
Indian diaspora is the largest in the world. Some 19 mn Indians stay outside of India legally as per World Economic Forum. In 2022, 100 bn was remitted back to India. The benefits of having a huge presence outside of the country is qualitative. Chinese businessmen follow guanxi (business network) for business deals. This has helped Chinese businesses to succeed across the world. Imagine having cooperation because you share similar cultural heritage. You would see this with the Indian community when you visit Dubai or USA.
Jugaad - We are hacky. We find ingenious ways of achieving results.
A water motor being propelled by a motorbike 😂 Large size of opportunity - If India continues to grow at 7-8% annually and the 80 mn grow along with it, we are looking at 160-180 mn readily available consumers in next 8-10 years! I am sure that the pace of people becoming richer will be faster than country’s annual growth rate. If you get a chance, watch Shark Tank India which demonstrates that entrepreneurs are in fact making money. Or for that matter watch this episode about untapped potential in the Alcohol industry.
Women are the largest hidden opportunity for India to become a large economy. Imagine if women start participating in the economy more productively in office jobs instead of helping at home. This needs significant cultural change. Parents, especially parents in law, expect to be taken care of. We don’t have enough of day care centres. Cultural tendencies are changing though. In fact, I have always worked in workplaces dominated by women.
Ultimately the country will rise on the back of its own people. If people want to become wealthier or at least better off and they put the effort, everyone will benefit. Government departments are downsizing - meaning people are more open to working in private companies. Startups have gained ground and seen wider acceptance. My parents were proud when I informed that I am starting up (I was scared to share this news with them).
How can Indians become rich?
I don’t know. However, there are a few theories floating around -
India to the world - Manufacture in India and export to rest of the world like China.
Make in India - Incentivise manufacturing inside the country. This has lost sheen.
Agri tech revolution - This one seems most promising. While the realities are far away from an actual agri-”tech” but it will take its time. If it works well, the impact will be huge.
Indian entrepreneurs - Startups are a rage in the country. Everyone wants to set up and their own business. I think this is transformative.
"Bharat" - The market outside of Tier 1 cities is huge and untapped. Unilever is the king of this market. How will others tap this space?
Will the country fail?
I don’t think so. Indians are hungry. They are unorganized, noisy and stingy but they are hungry for success. People fight about language, religion, caste and class. But they move together and make things happen.
The journey will be slow but India will rise 🙂
Okay I end the session here. This has been pretty long and it’s midnight already. So, you will receive this on Monday morning. Till next week, take care.
I hope the week will work wonders for you. Cheers!
Bbye!