When a nation has a large number of educated young people,
it thrives. Whenever there has been a
period of rapid and sustained economic growth anywhere in the world, it can be
traced to a disproportionate percentage of that nation’s population being young
and educated. David Bloom, a demographer
at the Harvard School of Public Health, coined the term “demographic dividend”
to describe this fruitful intersection.
As highlighted recently in Strategy+Business,1 Bloom’s work attributed 20 percent of the growth
of the Gross National Product in the United States between 1970 and 2000 to the
maturing of the Baby Boom generation, which was just such a youthful and
educated group.
Similarly, the maturing of East Asia’s youthful population
between 1965 and 1990 accounted for a third of that region’s economic growth.
Looking further back, we see the same pattern emerge. In the 19th century in
England, young educated people created the Industrial Revolution. Unfettered by families or financial concerns,
young people tend to branch out and pursue their own dreams, become
entrepreneurs, and create new technologies and businesses. Their drive toward innovation results in
rapid gains in productivity and robust economic growth.
In the 21st century, the country most
likely to benefit from those conditions is India, which is already in the midst
of a mammoth economic boom powered by a youthful and educated population. According to the new book, India’s Century2 by India’s Minister of Commerce and Industry, Kamal Nath,
three-fourths of Fortune 500 companies and more than half of Global 2000
corporations have now outsourced at least part of their technological services
to India. Adopting the role of “the
world’s tech support center” is crucial to India’s unique competitive
positioning.
By contrast, China’s current global success rests largely on
its ability to manufacture products more cheaply than anyone else. During the ‘80s and ‘90s, hundreds of
millions of young people were put to...
