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 / Summer 2010 / Issue 59(originally published by Booz & Company)


Preparing for a Demographic Dividend

The last thing I would say is that India is not going to build skills by having people sitting in chairs in front of teachers. That is not the right way to develop more practical skills in individuals. If we can train people to fly an aircraft with simulators, we can certainly teach people how to drive a forklift truck. We totally underestimate the ability to use modern technology to both reduce the cost of training and dramatically alter people’s skills. Why can’t forklift driving be taught as a video game? And what I think is becoming obvious in India is that we must fundamentally innovate, develop new pedagogical tools, and apply technology in ways that it has not been applied anywhere else in the world.

S+B: You’ve just been given a great segue, Tom.

CRAMPTON: Picking up on that, the problem I see in trying to develop skills is a new form of discrimination: age discrimination. Few people are willing to tap the true potential of the digital world, in which teenagers live, as a teaching platform.

Take a video game such as Counterstrike, which pits two teams of three players against each other in a commando-style raid. Communicating via chat and voice channels, these players learn to coordinate complex maneuvers under high pressure in teams that are often composed of teenagers from different continents and cultures.

First of all, a game like Counterstrike helps build intercultural communication and leadership skills that will be key as India and other emerging economies look to export high-value-added services. Second, contrast the experience a teenager has moving from the highly compelling and rich online environment of an immersive video game to a book-based system built on rote learning. If schools could learn to make mathematics and composition as compelling as online games, the generation would enthusiastically educate itself.

S+B: You’re saying that in India, and perhaps in a smaller way in other developing countries, the sheer numbers of people — the vast scale of the demographics — will force a radical rethinking of the types of things that ultimately improve a nation’s ability to teach and learn.

PRAHALAD: Precisely. In other words, if you use the lens from the West to look at India, it looks like a bloody mess. But if you start looking at India from the inside, there is a different quality, a vitality that’s not surfacing yet, but is bubbling underneath.

S+B: What’s the role of entrepreneurship? Is it important? If so, how do you make sure that entrepreneurs flourish? What policies, social architecture, and business architecture are needed?

PRAHALAD: Entrepreneurship is absolutely fundamental to India’s growth. If you look at the people on this panel, they’re all entrepreneurs to one degree or another. Apollo Hospitals Group, where Shobana works, started 37 years ago as one hospital. Now they’re adding 10 hospitals per year. India is an entrepreneurial story. India will have to continue this entrepreneurial journey to take advantage of its demographic dividend.

There are three kinds of requirements for entrepreneurs in India. First, very low capital intensity compared to the United States and Europe, but with extraordinary impact. Even now capital is not easily available to entrepreneurs. So what do you do? You start small. You make money on every project. You reinvest the money.

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  1. David E. Bloom, David Canning, and Jaypee Sevilla, The Demographic Dividend: A New Perspective on the Economic Consequences of Population Change (RAND Corporation, 2003): A review of the effects of demographic change on economic growth.
  2. Thierry Geiger and Sushant Palakurthi Rao, The India Competitiveness Review 2009 (PDF) (World Economic Forum, 2009): An in-depth analysis of India’s current and future ability to compete in the global commercial landscape.
  3. Yoshito Hori, Jean-Pierre Lehmann, Timothy Ma Kam Wah, and Vanessa Wang, “Facing Up to the Demographic Dilemma,” s+b, Spring 2010: At the World Economic Forum’s summer meeting in Dalian, China, four experts discussed the challenges and opportunities that aging populations present to business in emerging Asian countries.
  4. Nandan Nilekani, “India’s Demographic Moment,” s+b, Autumn 2009: The economic force of a burgeoning population.
  5. C.K. Prahalad, “The Innovation Sandbox,” s+b, Autumn 2006: Explores innovation in India’s health-care sector as a model for commercial creativity in all industries and all economies.
  6. World Bank Group’s End Poverty in South Asia blog: A blog devoted to exchanging ideas on ending poverty and dealing with demographic trends and issues in South Asia.
  7. For more thought leadership on this topic, see the s+b website at:
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