If you’ve ever been to India, it’s likely that you’ve been startled by how young the country looks; the streets of any Indian town, even of its villages, are full of 20-somethings. This isn’t a surprise: India is a very young country. Half of its population is under the age of 25. Two-thirds are less than 35. As a recent Bloomberg News analysis discovered, India is likely to have the world’s largest workforce by 2027, with a billion people aged between 15 and 64.
Essentially, India’s going through the sort of demographic transition that many other countries have, except on a far larger scale. The generation in its 50s in China today is the one that has lifted the country from poverty to middle-income status; the generation in its 20s in India today—this vast ocean of subcontinental millennials—will have to do the same for India.
Will they? Can we predict how this transformation will turn out? It’s not that easy. For one, India’s demographic transition is odd; it’s happened patchily, and in stages. It’s easy to see this if you consider not just how many children are being born, but where. India’s overall fertility rate—the number of children born to each woman—is now 2.6. Yet that conceals vast variations across the country. In urban India, the fertility rate is 1.8—well below what’s called the “replacement rate" needed to keep the population constant. Richer and more developed states in India’s south, and some others like West Bengal and Punjab, have fertility rates similar to those in Northern Europe. Kolkata has a fertility rate of 1.2—lower than Japan’s, which is 1.4.
So where are all these young people coming from? Mainly from the vast, underdeveloped plains of north India. The state of Uttar Pradesh, with a population somewhere between that of Nigeria and Brazil, has a fertility rate close to 3; neighbouring Bihar, which already has 100 million people, has a fertility rate of 3.3.
This is not good news. These are precisely the parts of India that are the most deprived of infrastructure, short of social services and disconnected from the global economy. Their gender ratios are awful; the millennial generation in north India has way more boys than girls. And they are worse educated than the rest of India, too; half of Bihar’s women are illiterate, as are about 56% of women in Uttar Pradesh.
There are two ways you can look at this picture. It’s easy to despair at the scale of the problem: If this is the generation that is to change India, how can they do it from where they are, from some of the darkest and least connected places in the world? How can they do it without education, and without skills? India’s government, shortly after it came to power in 2014, announced with much fanfare a “Skill India" mission that aimed to improve skills for 500 million people by 2022—a number in keeping with the size of India’s workforce. It then quietly abandoned that target in June this year, having only managed to train 11.7 million people in two years. Looked at this way, it’s easy to believe that nothing will work—this vast, male-heavy workforce will be unable to find anything productive to do with their lives.
There’s another way to look at it, too. Of course, India’s government could still get its act together and implement the reforms needed to get this workforce into factories and offices. But, even if they don’t, perhaps these young people will solve their own problems their own way. Consider this: This vast cohort is not just the largest generation in history, it is growing up in a highly digital environment. Their equivalents in the West or China or elsewhere have access to other kinds of infrastructure—banks, schools, roads, a functional government. For this new workforce in India, their first experience of many of these services will be online. That is where they will receive their skills, form professional networks, perhaps even borrow and save money.
And so it is difficult to imagine exactly what sort of economy, and what sort of country, this generation will create. Once they do not have to rely on anyone but each other to find customers, business partners and financiers, they may well craft the world’s first bottom-up digital economy.
And so there are two ways in which India’s great generation, this vast baby boom, this billion-strong workforce, might change the world. It might fail, and make it a darker, more angry place. Or it may succeed, and discover the answers to question about the future that everyone is asking: What will growth, jobs, and productivity look like in rest of the 21st century? Bloomberg