My speech on India’s 75th Independence Day Celebrations at Capitol Hill, Washington DC on September 14, 2022
I would like to begin my talk with two quotes:
“If I had to bet on one country in Asia, it’s India, if I had to bet on 2 countries, it would be India twice. There’s no better place to invest than India.” (John Chambers, Chairman Emeritus and CEO of Cisco from 1995-2016)
“It is not just India’s decade but India’s century.” (Bob Sternfels, Global Managing Partner, McKinsey & Company)
We live in an amazing time. It has already been defined by the World Economic Forum as the Fourth Industrial Revolution – the Digital Age. We are in the world of Amazon, Netflix, Facebook, Google and Apple. The Digital Age is changing everything – what we consume, how we live our lives, every business both large and small, how industries operate, the growth of countries, and our relationship with the world.
Time for a new superpower to rise?
History has demonstrated over and over again, in every Industrial Revolution, there has been a reshuffling of the deck as new countries emerge and take the lead in technology, culture, and economics. Focusing on the more recent past, the first modern Industrial Revolution, the age of steam power and mechanization of production, linked with colonialism, shifted economic power from the East to the West, with Europe emerging as the leader. The Second Industrial Revolution, the age of machines, industrialization and electricity, the United States emerged as a leader. During the Third Industrial Revolution, the Information Age, the US surged ahead as the primary superpower. Other countries also appeared to rise, such as Japan for a brief period, and China more recently, but the US is still the central power of the third age. I believe with the Fourth Industrial Revolution, the Digital Age, we could see another shift and the rise of a new superpower(s).
Examining where we are at on a global level through the lens of the Fourth Industrial Revolution, China is well placed based on the phenomenal economic growth they have achieved, their strong technology base, leading manufacturing base, and huge investments in key advancements such as Artificial Intelligence (AI). However, India is a powerful force in this global race and likely to be a dominant leader in the churning happening in the Digital Age due to its inherent democratic DNA.
The most fundamental aspect of digital is its democratization of access to information, knowledge, and technology. This is an amazing enabler for a large, yet relatively poor country like India. Historically, hundreds of millions of people did not have access to high quality education and infrastructure and that limited their opportunities. In the Digital Age that changes – access is democratized, it becomes very easy.
For India this is a chance for a 2nd independence. India’s 1st independence occurred in 1947, yet, despite political freedom, hundreds of millions of Indian citizens are left economically and socially disadvantaged. The Digital Age opens the door for these disadvantaged individuals (which includes a large powerhouse cohort of young population) and all of us, with education, low-cost access, technology, and the power of opportunity. The human plus economic potential of this equation is mind boggling! How many new entrepreneurs will be created? How many new enterprises will be established? How many global leaders will find their voice? What new innovations will emerge? What exciting new creative minds will be unlocked? The possibilities are truly endless.
India: A New Digital Superpower
What are the facts that support the emergence of India as a Digital Superpower in this post-Covid world? First, underpinning everything – democracy is embedded into the DNA of India. With the foundation of freedom via democracy, India can naturally embrace and take advantage of the VUCA (Volatile, Uncertain, Complex, Ambiguous) nature of the Digital Age. Built on this foundation of democracy, I surmise that there are 5 key factors unique to India. Let me elaborate:
- Smartphone penetration – India has over 1.17B wireless subscribers, and is among the largest base of population with internet access at 830M+ people due to low cost and wide mobile network availability.
- Low-cost data – In India, the Average Revenue per User is below $2, whereas in developed markets it is around $20. This dramatic cost advantage has propelled access to information across a large population base of India. Data is truly the fuel that is powering the Digital Age, and the relatively low cost of data is a big advantage for India.
- UID JAM – The Unique Identification (UID) and Jan Dhan-Aadhaar-Mobile (JAM) trinity is a leapfrog digital transformation for public services combining a unique ID with online services, a physical ID, and a mobile phone. With over 1.35B citizens enrolled in this digital service, India is leading globally by investing in the technology that enables Indian citizens access to modern and protected online transactions and services, which can support unprecedented growth in the public/private sector. This has already enabled India to become the global leader in Digital Payments with 48.6 Bn real time digital transactions in 2021. To put this in perspective, this is significantly higher than the nearest challenger China at 18 Bn. and 6.5 time more than US, Canada, France and Germany put together
- Global IT Services hub – India is the Information Technology engine of the world, supplying over 50% share of global IT services headcount in 2022 up from 35% in 2013. Simply put, India fuels innovation and is at the leading edge of information technology for the globe.
- Abundant young talent – Over 40% of India’s population is under the age of 25, and 60% under the age of 35- with over 800 million people, By 2047, India will have 20% of the world’s working inhabitants. This will also be the world’s largest cohort of digital natives. Indians below the age of 35, who are born in the Digital Age, can easily adapt to technological changes.
These powerful factors combined are quite unique to India and critical to realizing the benefit of the democratization of access and data brought about by the Digital Age. Widespread penetration of mobile devices, low-cost data, a modern public tech infrastructure, leading IT knowledge hub, and a young, digital native population is a formula for explosive growth and dramatic innovation in the Digital Age leading to India’s high potential to be the Digital Age leader.
“Digital First” Success for India
As the facts show us, India is well placed to achieve digital leader status, but it is not assured in this VUCA world. To improve India’s growth and trajectory for success, there are four important areas for differentiation, a concept I call “Digital First” that needs focused attention. To achieve digital superpower status India should pursue the following:
- Global IT Services leadership – Continue to nurture, fuel and grow leadership in IT services. This is a complex formula involving education, technology access, capital, industry and other factors. Leading from the front is critical- industry associations, education institutions, government and enterprises need to push continually for tech hub growth, improved infrastructure, and hi-quality knowledge access across India.
- Innovative global businesses from India – Create the next generation of new, innovative Digital Age businesses and “unicorns” like Google, Facebook and Alibaba in India. To do this, start-ups and enterprises in India will need to develop deeper end customer understanding, spur higher levels of innovation, move from a country view to a global vision, and invest for scale. All of these factors can be driven by the forcing factor of innovating from India.
- Digital transformation in conventional industries – Modernize existing conventional industries and enterprises such as pharmaceuticals, steel production, and the automotive industry based on digital transformation and the new rules of business. India has lagged other countries and especially China in manufacturing and other similar traditional segments. If India can digitally transform these traditional industries, it is a great opportunity to both catch-up and then leapfrog ahead of competition.
- “Digital First” Public services – Increasing technology investment in public services to leapfrog ahead of other more economically advanced countries by using digital technology to offer more effective and available services to the Indian population. All aspects of central, state, or local government or education should go “Digital First” to provide easy-to-access, high-quality, rapid-response assistance and administration to citizens.
I find it very encouraging that key elements are in place for the next set of leading global technology powerhouses to emerge from India. There is immense potential that by focusing on Digital First, we can quickly unleash John Maynard Keynes’s famous economic “animal spirits” and the economic prospects of a billion plus people.
Unleashing tsunami of entrepreneurship in India
All of these factors have to be supported and driven by unleashing a tsunami of entrepreneurship. The groundswell of entrepreneurs with innovative new ideas and business models, added to the rapid digital conversion of older industries, will create a virtuous cycle, fueling the next wave of entrepreneurs. Each reaching a higher level of success and driving the next cycle of innovation and growth – success creates its own success!!. Starting from 1st unicorn in 2011, India is now home to 107 unicorns today, and is the third largest Unicorn producer in the world after the US and China. On an average, startups founded before 2011 took an average of 9.3 years from the date of inception to enter the unicorn club whereas in 2021 it took 6.6 years on average to become a unicorn.
Let me also state that the next generation of entrepreneurs is not emerging just from big metros and major universities, but also from smaller towns and rural areas all over the world. The composition of the next generation of entrepreneurs is going to change significantly over the next 15 years, just like that of the Indian cricket team, and American major league baseball. After drawing talent from bigger cities for years, the Indian cricket scene is now dotted with talent from smaller towns as opportunity, competition, and pursuit of talent has expanded. In the US, professional baseball teams are scouring the world for athletic talent and a competitive advantage over their rivals. When discussing India, the opportunity and how to emerge as a winner in the Digital Age, reviving the approach to education is crucial. India needs to focus on embracing “soft skills” education to supplement the existing strong emphasis on mathematics, science and the traditional hard skills. In addition, it needs to pursue programs and make adjustments in the educational system that encourage and help develop entrepreneurs at the grassroot level.
US-India Partnership: a beacon for the free world
US-India partnership is the most important and natural partnership for the 21st century at many levels – political, economic, science & technology and social. This is very true in the digital space as well. The US is the reigning Digital Superpower and has contributed tremendously to India’s rise in this space. Many American companies have been leveraging India intensively for technology development, which has been a key trigger for the development of the IT Services industry in India. Venture and Private Equity capital has come from the US, which has contributed tremendously to the growth of the start-up ecosystem in India. The US is the biggest destination for higher education for students from India. Time has come to step up the partnership to a next level – a more mature relationship, one of equals. Some of the shifts I believe should be:
- From American Firms leveraging India for Talent and for Execution to Joint R&D and Innovation
- From Indian students coming to American Universities to American Universities setting up in India
- From Indians emigrating to America to more two-way movement of people
- From Indians as CEO of great global/American firms to great global firms emerging from India
Conclusion
I am deeply encouraged that there are key enablers in place for many 21st century global technology enterprises to be born in India. How powerful is it to know that we are on the cusp of unleashing the potential of a billion people via the power of the Digital Age. Perhaps aided by active US-India collaboration, history will look back on the Digital Age as India’s second independence and the momentous pivot to becoming a Digital Superpower.
