India's technology opportunity: Transforming work, empowering people

144 Pages·2014·3.59 MB·English

McKinsey Global Institute
December 4 1 02
India’s technology
opportunity: Transforming
work, empowering people
McKinsey Global Institute India’s technology opportunity: Transforming work, empowering people
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Copyright © McKinsey & Company 2014
McKinsey Global Institute
December 4 1 02
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, effciency, and innovation. Ironically, India’s Julie Philpot, and Rebeca Robboy) and the McKinsey
prowess in information technology is a defning 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 refects 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 proft 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 Identifcation 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 Offce, 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 offcials Anupam Khanna, chief Electronics, Indian Institute of Technology, Kanpur.
economist and director general; Sangeeta Gupta, senior
We deeply appreciate the expertise contributed
vice president; and Rama Vedashree, vice president,
by many McKinsey colleagues across sector and
e-governance and domestic IT, for their perspectives
functional practices. For overall technology insights,
and expertise.
we benefted 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 fnancial 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 Chandrika Gopalakrishnan, Saikiran Krishnamurthy, and
of India, and member secretary, National Innovation Barnik Maitrad. Our insights on the impact of technology in
Council; and Rajendra Kumar, joint secretary, Department the energy sector came from Amit Khera, Suhail Sameer,
of Electronics and Information Technology, Government of Kshitij Sanghi, and Vipul Tuli. For perspectives on
India. We also gained valuable insights into e-governance technology in infrastructure, we called on Jim Banaszak,
from three World Bank offcials: Randeep Sudan, practice Rajat Gupta, Martin Joerrs, Thomas Netzer, Vijay Sarma,
manager for the ICT Sector Unit; Shashank Ojha, senior and Roland Villinger. Perspectives on e-governance
e-government specialist; and Siddhartha Raja, lead ICT came from Saket Jasoria and Martin Lundqvist.
policy specialist. Kanaka Pattabiram and Kara Sprague gave us valuable
insights on barriers to Internet adoption, drawing on
This work benefted from a host of interviews with
their work for the upcoming McKinsey report Offine and
technology and business innovators from various sectors.
falling behind: Barriers to expanding Internet adoption.
However, any references to specifc companies in this
MGI senior fellow Jeongmin Seong helped us with
report are from public sources. We gratefully acknowledge
China-specifc insights from MGI’s July 2014 report,
the contributions of Ajay Bakshi, managing director
China’s digital transformation: The Internet’s impact on
and CEO, Manipal Hospitals; Namita Dalmia, associate
productivity and growth.
director, Central Square Foundation; Anand Deshpande,
founder, chairman, and managing director, Persistent This report is part of our ongoing work about the
Systems; Vibhav Garg, head, health economics and impact of technology on national economies and on
government affairs, Boston Scientifc; Arunabha Ghosh, Indian economic empowerment. Our goal is to provide
chief executive offcer of the Council on Energy, a fact base and insights about important technological
Environment, and Water; Myshkin Ingawale, founder, developments that will help business leaders and policy
Biosense Technologies; Dr. Sujeet Jha, head of the makers develop appropriate strategies and responses.
Department of Endocrinology, Diabetes, and Obesity, As with all of MGI’s work, this report has not been
Max Healthcare; Kanav Kahlol, team leader for Affordable sponsored in any way by any business, government, or
Health Technologies, Public Health Foundation of India; other institution.
Rajiv Lochan, trustee, IPK Trust; R. Mukundan, managing
Richard Dobbs
director, Tata Chemicals; Sridhar Rajagopalan, managing
Director, McKinsey Global Institute, London
director, Educational Initiatives; Ramesh Ramanathan,
chairman, and Santanu Mukherjee, senior vice president
James Manyika
and head of strategic initiatives, both of Janalakshmi
Director, McKinsey Global Institute, San Francisco
Financial Services; Saipriya Sarangan, vice president, The
Skills Academy; Dr. Devi Shetty, chairman and founder,
Jonathan Woetzel
Narayana Health; and Shrikumar Suryanarayan, chairman,
Director, McKinsey Global Institute, Shanghai
Sea6 Energy.
December 2014
India in 2025: potential impact
of 12 empowering technologies
$550–1,000 billion
annual economic impact (20–30% of India’s
incremental GDP from 2012 to 2025)
400 million
additional people with
access to quality health care
300 million
fnancially included people
14–24 million
workers could gain more years
of education
15–60%
yield improvement for
22 million farmers due to
precision agriculture
$50–95 billion
savings and productivity gain from energy technologies
$17–25 billion
economic value from intelligent
transportation (roads and ports)
10 million 19–29 million
tech-enabled workers in non-farm workers who will
health care, education, need new job opportunities
agriculture, citizen services, and skills
and fnancial services
Contents
Executive summary 1
1. Twelve empowering technologies for India 13
2. Financial services 43
3. Education and skills 53
4. Health care 64
5. Agriculture and food 77
6. Energy 89
7. Infrastructure 99
8. Government services 113
9. Creating conditions for technologies to fourish 121
Bibliography 129