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India's Technology Opportunity McKinsey Global Institute McKinsey Global Institute India’s technology opportunity: Transforming work, empowering people empowering work, opportunity: technology Transforming India’s December 2014 India’s technology opportunity: Transforming work, empowering people The McKinsey Global Institute The McKinsey Global Institute (MGI), the business and economics research arm of McKinsey & Company, was established in 1990 to develop a deeper understanding of the evolving global economy. Our goal is to provide leaders in the commercial, public, and social sectors with the facts and insights on which to base management and policy decisions. MGI research combines the disciplines of economics and management, employing the analytical tools of economics with the insights of business leaders. Our “micro-to-macro” methodology examines microeconomic industry trends to better understand the broad macroeconomic forces affecting business strategy and public policy. MGI’s in-depth reports have covered more than 20 countries and 30 industries. Current research focuses on six themes: productivity and growth; natural resources; labour markets; the evolution of global financial markets; the economic impact of technology and innovation; and urbanisation. Recent reports have assessed job creation, resource productivity, cities of the future, the economic impact of the Internet, and the future of manufacturing. MGI is led by three McKinsey & Company directors: Richard Dobbs, James Manyika, and Jonathan Woetzel. Michael Chui, Susan Lund, and Jaana Remes serve as MGI partners. Project teams are led by the MGI partners and a group of senior fellows, and include consultants from McKinsey & Company’s offices around the world. These teams draw on McKinsey & Company’s global network of partners and industry and management experts. In addition, leading economists, including Nobel laureates, act as research advisers. The partners of McKinsey & Company fund MGI’s research; it is not commissioned by any business, government, or other institution. For further information about MGI and to download reports, please visit www.mckinsey.com/mgi. McKinsey & Company in India McKinsey & Company is a management consulting firm that helps leading corporations and organisations make distinctive, lasting, and substantial improvements in their performance. Over the past eight decades, the firm’s primary objective has remained constant: to serve as an organisation’s most trusted external adviser on critical issues facing senior management. McKinsey advises companies on strategic, operational, organisational, and technological issues. The firm has extensive experience in all major industry sectors and primary functional areas as well as in-depth expertise in high-priority areas for today’s business. McKinsey & Company was established in 1926 and has 102 offices in more than 60 countries. From its offices in Delhi, Mumbai, Chennai, and Bangalore, the firm serves clients in the public and private sectors across India. For more information, please visit www.mckinsey.com/Global_Locations/Asia/India. Copyright © McKinsey & Company 2014 McKinsey Global Institute December 2014 India’s technology opportunity: Transforming work, empowering people Noshir Kaka Anu Madgavkar James Manyika Jacques Bughin Pradeep Parameswaran Preface Millions of Indians hope for a better future, with well- Vikas Siddheshwar, and Francesco Zerbato. MGI senior paying jobs and a decent standard of living. To meet their editor Geoffrey Lewis provided editorial support, and aspirations, the country needs broad-based economic Marisa Carder and Samson Mathew provided graphic growth and more effective public services—delivered design support. We thank the MGI communications quickly. Technology can play an important role in raising and operations team (Tim Beacom, Deadra Henderson, productivity, efficiency, and innovation. Ironically, India’s Julie Philpot, and Rebeca Robboy) and the McKinsey prowess in information technology is a defining element India External Communications team (Fatema Nulwala and of its global brand, but so far, large parts of the country Ava Sethna) for their contributions. remain untouched by its power. This report reflects the knowledge and guidance of We believe that this can change and that technology can our distinguished India technology advisory group. become an important driver of both economic growth and For their extremely valuable input, we are grateful to social development. A set of “empowering” technologies Raghunath A. Mashelkar, chairman of the National can dramatically reshape value chains and profit pools, Innovation Foundation and a member of the National bringing better lives to millions of Indians. We identify Innovation Council, and R. Chandrashekhar, president 12 technologies that are likely to be widely adopted in of the National Association of Software and Services India over the next decade, with the potential to address Companies (NASSCOM) and former secretary in the India the country’s challenges and have massive impact on Department of Telecommunications and the Department consumers, workers, and businesses. In this report, we of Information Technology. We offer special thanks to describe more than 40 promising applications of these Yezdi Lashkari, senior adviser on technology, media, and technologies across seven sectors of the economy. digital transformation to McKinsey in India, for helping Collectively, these innovations can create immense shape this report with his insights on disruptive online economic value by 2025, provided supportive policies trends and innovation in the digital age. We also thank and scalable business models are in place. Our research Som Mittal, senior adviser on technology to McKinsey brings these themes together, building on two recent in India, for sharing insights from his deep experience in MGI research efforts: Disruptive technologies: Advances working with both private companies and governments on that will transform life, business, and the global economy technology issues. in 2013 and From poverty to empowerment: India’s imperative for jobs, growth, and services in 2014. For their guidance and perspectives, we are extremely grateful to Nandan Nilekani, former chairman of the This work was led by Anu Madgavkar, a senior fellow Unique Identification Authority of India; S. Ramadorai, of MGI, along with Noshir Kaka, managing director of adviser to the Prime Minister of India in the National McKinsey in India; Pradeep Parameswaran, a McKinsey Council on Skill Development; and Rakesh Mohan, principal in New Delhi; James Manyika, a McKinsey and executive director of the International Monetary Fund. MGI director in San Francisco; and Jacques Bughin, a McKinsey director in Brussels. Sujit Chakrabarty, a Several thought leaders from the National Innovation principal with McKinsey’s Business Technology Office, Council were generous with their insights, and we thank and Michael Chui, an MGI partner, made valuable them sincerely: Samir Brahmachari, R. Gopalakrishnan, contributions to the team. We offer sincere thanks to Anil K. Gupta, Kiran Karnik, Arun Maira, Gordon Orr, a McKinsey director in Shanghai, for his Saurabh Srivastava, and Sam Pitroda, former chairman of insights and guidance. the National Innovation Council. The research team, led by Tarun Garg and We are grateful to members of the NASSCOM Ashwin Hasyagar, included Shambhavi A., Madhur Bansal, Executive Council for sharing their perspectives with Pranay Bhatia, Rohan Chinchwadkar, Sonali Gupta, us: Mukesh Aghi, Rajan Anandan, Srinath Batni, Parthiban Jayaprakash, Harsh Jhaveri, Mayank Kukreja, Suhas Bhide, R. Chandrasekaran, Neelam Dhawan, Rahul Mathew, Devi N., Meghana Rajeshwar, CP Gurnani, Ravi Gururaj, Aruna Jayanthi, VK Mathews, Keshav Murugesh, Bhaskar Pramanik, Rishad Premji, We thank academics who contributed very helpful Vijay Ratnaparke, BVR Mohan Reddy, Raman Roy, insights: Pankaj Jalote, director, Indraprastha Institute Shakti Sagar, Arun Seth, Arvind Thakur, Ashutosh Vaidya, of Information Technology, Delhi, and Dheeraj Sanghi, Avinash Vashistha, and Jeffrey M. White. We especially professor, Department of Computer Science and thank NASSCOM officials Anupam Khanna, chief Electronics, Indian Institute of Technology, Kanpur. economist and director general; Sangeeta Gupta, senior vice president; and Rama Vedashree, vice president, We deeply appreciate the expertise contributed e-governance and domestic IT, for their perspectives by many McKinsey colleagues across sector and and expertise. functional practices. For overall technology insights, we benefited from the experience of Driek Desmet, Several government leaders kindly contributed their Chandra Gnanasambandan, Malcolm Gomes, and extensive experience and shaped our understanding of Siddharth Gopalakrishnan. For financial services, we issues: J. Satyanarayana, IT adviser to the government were guided by Renny Thomas and Ananya Tripathi. of Andhra Pradesh and former secretary, Department For the education sector, we drew on the expertise of of Electronics and Information Technology, Government Hemant Joshi, Shirish Sankhe, Ramdoss Seetharaman, of India; Keshav Desiraju, secretary, Consumer Affairs and Ramya Venkataraman. Implications for the health- Ministry and former secretary, Ministry of Health and care sector were shaped by Palash Mitra, Ankur Puri, Family Welfare, Government of India; B. K. Gairola, and Mandar Vaidya. For agriculture, we were assisted by mission director, National eGovernance Plan, Government
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