Demographic Dividend

Insightful article in the Economist about the effects of demography in India.
In 10 years, India's population will, on average, be almost twenty years younger that in the U.S., Western Europe, and Japan.

Demographers have often noted that most of the emerging world will stay young while the rich world ages. In 2020 the median age in India will be 28, compared with 38 in America, 45 in western Europe and 49 in Japan. But the dividend will be paid not just in the form of more favourable dependency ratios but also in a more entrepreneurial business culture. Young people are innately more inclined to overthrow the existing order than are their elders. This predisposition is being reinforced by two big changes in the emerging world. The first is the information-technology revolution. The Boston Consulting Group calculates that there are already about 610m internet users in the BRICI countries (Brazil, Russia, India, China and Indonesia). BCG predicts that this number will nearly double by 2015. And in one respect many consumers in emerging markets are leapfrogging over their Western peers. They are much more likely to access the internet via mobile devices (which are ubiquitous in the emerging world) rather than PCs. That gives local entrepreneurs an advantage, says Rob Salkowitz, the author of “Young World Rising”. Whereas Western companies are hampered by legacy systems and legacy mindsets, they can build their companies around the coming technology.
The second is a pro-entrepreneurial revolution. Global institutions such as the World Bank and the World Economic Forum have helped to popularise entrepreneurialism. Mr Gopinath was encouraged to stick to his guns as an entrepreneur when the WEF elected him its youngest ever Young Leader. Several big companies have also encouraged the trend. Microsoft is helping local businesses and NGOs improve information-technology infrastructure. Goldman Sachs is spending $100m on female entrepreneurs, many of them in emerging markets.

Read the full article at the Economist's Schumpeter column.