As global growth slows down, people look towards technology innovation to put it back on track. Over the last two centuries, technology innovation has provided the major impetus for economic growth, but now some economists question whether sustained innovation is possible at such scale, putting long-term global growth into doubt.
Three weeks ago, McKinsey Global Institute(MGI) published a report on 12 disruptivetechnologies that could have a combined economic impact of $20-30 trillion a year by 2025. "It is not a perfect picture of the future," says Michael Chui, MGI partner, "but similar technologies have resulted in a lot of economic growth in the past."
Not all technologies in the list affect India, but some are already making significant impact on the economy, and some others will cause tremendous disruption by 2025. A few others would have begun to make their impact felt within a decade, and then cause big change for a decade or two after that.
We give our pick of those relevant to India, and describe how they will impact the country over the next decade and a half. Says Anu Madgavkar, MGI senior fellow and head in India: "Technological change could have a bigger role in driving India's GDP impact than in advanced economies, as it can stimulate demand and achieve productivity gains in a variety of low-productivity sectors."
Immediate Impact Technologies
- Mobile Internet
- Cloud technology
- Knowledge work automation
- Internet of things
India's rapidly rising middle class with increased spending power will drive the rapid adoption of many technologies, although India will still not be a leader in technology innovation by global standards. This adoption will drive tremendous change across some sectors. Mobile connectivity and advancing healthcare tech will lead to hospitals monitoring and treating patients continuously, rather than just during hospital visits.
Banking and retail will switch to mobile in a big way. Tablets and digital technology will change how education is delivered in schools and universities. Connected sensors will proliferate, improving agriculture and factory productivity, improving traffic safety, reducing water wastage, and so on. Automation will disrupt many business models, particularly outsourcing.
In all these areas, India will remain an adopter rather than an innovator. The share of domestic innovation will of course continue to increase, but the economic impact of technology adoption will be felt more significantly than of innovation over the next decade. Domestic innovation over the decade will be an important factor though, as it will keep the technology gap between India and the innovators to the minimum.
Pockets of innovation will also produce some uniquely Indian business models, particularly in mobile internet, as India begins to close the technology gap with the developed countries. "The healthcare and education sector will see the biggest applications of mobile technology," says Mohan Kumar, partner in Norwest Venture partners.
Intermediate Impact Technologies
- Energy storage
The impact of next generation genomics will be felt within three or four years, and continue to increase over the next decade. Whole genome sequencing is set to arrive in India within a year. As the technology improves and costs come down, it will impact healthcare in three ways: for predictive diagnostics, for cancer treatment, and for drug development.
Cancer would be classified as a chronic disease, while diabetes and cardiovascular disease could be predicted well in advance and so probably prevented, or even reversed in some cases. Clinical research will proceed hand in hand with sequencing, making next-generation treatments possible.
As India expands its renewable energy programme, improvements in energy storage could help remove the intermittency problem and thereby helping even larger deployments. Energy storage technology would make microgrids even more of a possibility.
By 2025 solar energy would be approaching grid parity with coal, and biofuels far more economically and technologically viable. Pressure for climate change action will also drive renewable adoption, but India is unlikely to be an innovator in renewables, while it will see some pockets of innovation in genomics. "Doctors in India follow the West, and so we could see sequencing adopted as standard of care quickly," says Vijay Chandru, CEO of Strand Life Sciences.
Long-term Impact Technologies
- 3D manufacturing
- Autonomous vehicles
- Advanced materials
3-D printing is a technology that is revolutionising manufacturing, but it could be a full decade before India would feel its impact fully. 3-D printing would democratise manufacturing, leading to mass customization, and make possible the manufacturing of many new objects. Advanced robotics would take people away from dangerous tasks, and make possible tasks that are too difficult - like high-precision surgery - for human beings.
Autonomous vehicles would make highway accidents a thing of the past. Wonder materials would let us do all kinds of unimaginable things like self-healing concrete or self-cleaning clothes. Yet, these technologies will take a decade or beyond to fully impact human lives and the economy. "When you are looking to replace an established material," says National Research Professor R.A.Mashelkar, "you are looking at long periods of testing and development."
These technologies could take even more time to establish in India, as the R&D ecosystem in India is not good enough to develop them, and the industrial infrastructure far from adequate to absorb them fully. This is an area where India is likely to remain a near-total adopter till 2025, the period under our purview, thereby diminishing their full economic impact.