Note: This is the 4th post in the 30 part series that I am doing on Key success factors for doing business in India – A 30 part series !, that I plan to do over next month.
IndiaÂ and China are probably the most talked about countries outside of US currently. The reason – their phenomenal growth.
Some years back the reason was different, it was their population, and you couldn’t but stop people talking about the economic problems that these two countries were facing due to it. Guess what, it was a blessing in disguise !
The growth that these two countries are seeing now is on the back of their large young working population. The aging Germany or US know very well the importance of having a young and working population and its effect on economy. A good well educated young working class can lift a nation against all odds and vice a versa.
This post will mostly presents the facts and comparison of population between India and China and their effects.
India currently stands at a very advantageous position as you will learn shortly from these facts:
- India is now forecast to surpass China in total population by 2030, five years earlier than previously thought.
- India’s population is slated to rise by almost 350 million over the next quarter century, twice as fast as the United States, Western Europe and China combined.
- While China’s population is currently (2005) larger than India’s by over 200 million, by 2050 India’s population is expected to exceed China’s by 200 million.
- India’s urban population is projected to rise from 29 percent of total population in 2005 to 41 percent by 2030.
More critical for economic growth, however, is the rate of growth in the labor force. This is best estimated by projecting growth in the “working-age” population (age 15-60). Here, India’s advantages are amplified. The growth in India’s working age population is expected to exceed its already rapid population growth until 2015. While China’s working age population declines from 2020 to 2050, India’s increases until at least 2045. Reversals of fortune. China’s current working age population dwarfs India’s by 230 million, however, by 2050 India’s working age population will exceed China’s by the same amount.
India’s youthful population profile, coupled with a sharply declining fertility rate suggests a relative slowdown in the number of children expected to be added in the coming decades. The experience of Asia shows that the economic miracles in Japan and in the “Tiger Economies” of Southeast Asia and recently in China occurred at a similar stage of demographic transition where the share of working population grew sharply. China, conversely, is aging faster than any other country in history. It is unique in that it is growing old before it has grown rich. Its one-child policy is largely responsible for this effect. Chinese officials state that 300 million births over the past 30 years were “averted” as a result of this policy. China’s transition to an aging population is particularly abrupt, and a serious gender imbalance will only exacerbate the population decline starting in 2030.
Any entity planning to start business in India, is going to have distinct advantages over other countries when it comes to building a good workforce over coming years.