“Jobs, Pay, And Skills: India Will Edge Out China”, McKinsey Global Institute

 

Over the past three decades, a global labor market has taken shape, spurring a massive movement from “farm to factory” in emerging markets and boosting output and productivity to bring hundreds of millions of people out of poverty.

To raise productivity, developed economies invested in labor-saving technologies and tapped global sources of low-cost labour. Today, the strains on this labor force are becoming painfully evident. As McKinsey Global Institute ( MGI) finds that market forces failed to resolve demand and supply imbalances for tens of millions of skilled and unskilled workers alike.

Over the next two decades, China would be eclipsed as the world’s major source of low-cost labour by India and “young developing” economies of South Asia and Africa.

In other words, nearly 60 per cent of the 600 million net additions to the global labor force from 2010 to 2030 will occur in India, South Asia and Africa. This would bring the total global labor force to 3.5 billion in 2030, the MGI said in a report.

India’s strength lie in its capacity to supply college-educated workers with 85 million additional college-educated workers by 2030, likely the second-largest supplier of net new college-educated workers after China.

The report added that unprecedented action is required on education and training to address global mismatches in supply of workers with skills needed to drive 21st century economies.

To understand the issues, McKinsey Global Institute looked at 70 countries that account for 96 per cent of global GDP and are home to 87 per cent of the world’s population.

Adapted From “The world at work: Jobs, pay, and skills for 3.5 billion people”, McKinsey Global Institute.

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