At a time when technologies such as artificial intelligence (AI) are feared to render millions of humans jobless, a recent report from McKinsey Global Institute (MGI) says that digital economy has the potential to unlock productivity and would create 60-65 million new jobs by 2025.
The report, ‘Digital India: Technology to transform a connected nation’, estimates India’s labour force to grow to 545 million by 2025, from 480 million in 2017, aided by core digital sectors, newly digitising sectors, government services and labour markets, thereby creating economic value.
But the report also cautions that retraining and redeployment will be essential to help some 40-45 million workers, whose jobs could be displaced or transformed by the digital revolution.
“Job losses on account of technology intervention is nothing new but the digital technology also gives rise to new kind of jobs and workers need to reskill themselves to stay relevant,” said Anu Madgavkar, an MGI partner who headed the research. Citing e-commerce portals and food delivery apps as some of the recent examples of technology, Madgavkar said digital adoption could unlock more women-oriented jobs and also alter some of the conventional jobs.
“Getting food delivered at your doorstep or booking a cab on your mobile were unheard of a few years ago,” Madgavkar said.
The report, which surveyed over 600 companies across all sectors, said core digital sectors such as IT and business process management (IT-BPM), digital communication services, and electronic manufacturing could double their GDP level to $355-435 billion by 2025 from the current $170 billion.
Newly digitising sectors such as financial services, agriculture, education, logistics, and retail are set to grow exponentially, the report added.
“Even sectors such as construction, manufacturing and agriculture are increasingly embracing digital technologies and social media to reach out to their customers,” Madgavkar said.
The report also rated India as second-fastest ‘digital adapter’ among 17 mature and emerging economies with a growth rate of 90 per cent between 2014-17. The country ranks only next to Indonesia which grew by 99 per cent.
The report said India is one of the largest and fastest-growing markets for digital consumers and with 560 million internet subscribers in 2018, it is second only to China.
Indian mobile data users consume 8.3 gigabits (GB) of data each month on average, compared with 5.5 GB in China and 8 to 8.5 GB in South Korea, an advanced digital economy. Indians have 1.2 billion mobile phone subscriptions and downloaded more than 12 billion apps in 2018.
“The reach of internet to all layers of India is quite dramatic. Roughly half of the total growth in mobile internet users and internet related infrastructure has come from States that have lower than average income,” Madgavkar said.