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Published: August 27, 2009

 
 

India’s Demographic Moment

But a demographic opportunity exists now that didn’t exist in the past: the global environmental and climate crisis. Until now, what might be called a “calculus of the bootlegger” has prevailed with India’s natural resources. Businesses, for instance, do not pay a penalty for industrial emissions or for pumping effluents into water bodies. The consequences have been horrendous. The Damodar River, for example, has more than 300 coal, iron ore, limestone, and mica mines dotting its banks, all releasing effluents that turn its water into a dank sludge. Another big river, the iconic Yamuna, receives nearly 3 billion liters (800 million gallons) of waste every day from small industries and sewage lines; it is polluted to a level 100,000 times above the standard for safe bathing.

An effective way to create a market-driven mechanism for environmental costs is through the pricing of carbon emissions, as economist Nicholas Stern has promoted. Businesses can gain much from such regulations, particularly because they would generate green standards and investment. Foreign investments in India are already emerging as a source of “green intellectual property” and technology. In the IT industry, exposure to global sustainability practices has pushed companies toward environmentally friendly business approaches.

The more clearly corporate leaders see these trends, the more effective they can be at making decisions in their own companies. Infosys, for example, has adopted sustainability standards that are among the most stringent in India. The company is also pursuing other opportunities related to the demographic dividend. For example, it is collaborating with ACDI/VOCA, a nonprofit international development organization that is working to make local agricultural and business information available to farmers; these efforts respond to the entrepreneurial energy in the rural parts of the country. Infosys has its share of employees who come from financially constrained backgrounds — sons of rickshaw pullers and wives of street vendors. And it has entered into partnerships with local governments on such issues as infrastructure and education.

Awareness of the demographic dividend inevitably changes corporate strategies; the dividend demonstrates that prosperity is innately tied to the quality, energy, and capabilities of people. Even in countries such as India, where people may be in great supply, business will have to find ways to attract them and maintain their interest. Our demographic dividend, like all others, will someday end.

Reprint No. 09305

Author Profile:

  • Nandan Nilekani was appointed the first chairman of the Unique Identification Authority of India (UIDAI), a position with the rank of cabinet minister, in June 2009. Previously, he was the co-chairman of Infosys Technologies Ltd., a multinational information services company. He is the author of Imagining India: The Idea of a Renewed Nation (Penguin Press, 2009). 
 
 
 
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Resources

  1. David E. Bloom, David Canning, and Jaypee Sevilla, Demographic Dividend: A New Perspective on the Economic Consequences of Population Change (Population Matters, RAND Corporation, 2003): Research showing the link between population age structure and demographic growth.
  2. Vinay Couto and Ashok Divakaran, “How to Be an Outsourcing Virtuoso,” s+b, Autumn 2006: Features Infosys as a master provider.
  3. Gordon Crovitz, “Time to Push for U.S. Immigration Reforms,” Wall Street Journal, April 28, 2009: Source on the large proportion of immigrants in U.S. higher education.
  4. Nandan Nilekani, Imagining India: The Idea of a Renewed Nation (Penguin, 2009): Explores India’s transformation from colony to socialist state to capitalist market to emergent global leader.
  5. Barack Obama, “Text of Remarks at Green Bay Town Hall Forum,” Milwaukee (Wis.) Journal Sentinel Online, June 11, 2009: The U.S. president on education and prosperity.
  6. “Peering into Their Murky World,” The Economist, July 2, 2009: In
    his new position, Nilekani is overseeing the development of India’s first national biometric identity card.
  7. C.K. Prahalad, “The Innovation Sandbox,” s+b, Autumn 2006: How ingenuity is transforming business in India, featuring Aravind Eye Care and Narayana Hrudayalaya.
  8. Sheridan Prasso, “A Challenge for India,” s+b Leading Ideas Online, 1/29/08: N.R. Narayana Murthy, cofounder (with Nilekani) of Infosys Technologies, argues for broad-based economic opportunity.
  9. Lord Andrew Turnbull, “How to Be a Demographic Realist,” s+b, Autumn 2007: The former head of the U.K.’s Home Civil Service explains why basic assumptions about retirement and growth will have to change.
  10. Infosys Web site: Includes essays and news releases on similar themes, including one on the ACDI/VOCA partnership to promote agricultural information.
  11. For more business thought leadership, sign up for s+b’s RSS feed.
 
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