McKinsey global managing partner, Bob Sternfels. (Photo: McKinsey & Co)
McKinsey's global managing partner Bob Sternfels on December 5 asserted that this is going to be not just India's decade, but India's century, adding that India can play a leading role in 'reimagining globalisation' rather than decoupling.
Interacting with Shereen Bhan - Managing Editor, CNBC-TV18, in an exclusive interview, along with McKinsey's top brass, Sternfels, noted that he is not naive to the challenges being faced in the world in terms of inflation, difficult geopolitics, and environmental challenges, and India is not immune to those.
"I am not naive that there are a lot of challenges in the world and India is not immune to those, as we think about inflation, difficult geopolitics, and environmental challenges," he said.
Sternfels comments came at a time when the global economy is facing uncertainty and recessionary pressures, while India is still resilient in light of this volatility.
However, elaborating on India's story so far, the McKinsey global head added, "You look at the potential that is not unrealistic to sustain 7-8 percent GDP growth per year through India's 100th birthday in 2047. You look at the potential to move over 200 million people into the workforce from non-manufacturing jobs into manufacturing and other types of technology jobs. You look at the opportunity of 200 million women into the workforce, and so on."
As per the government data released earlier last month, India's gross domestic product (GDP) stood at 6.3 percent in the July-September quarter, in line with the consensus estimate – and the Reserve Bank of India's (RBI) own forecast – of 6.3 percent.
In terms of Gross Value Added, or GVA, the growth in July-September was 5.6 percent, down from 12.7 percent in April-June and 8.3 percent in the same quarter last year.
Further, Sternfels also stated that India is the workforce for the world, adding that between now and 2050, the country will be home to about 20 percent of the global workforce.
On the global supply chain disruption due to the COVID-19 outbreak and other global tensions, Sternfels pointed out that the future of supply chains runs through India. "...As everyone starts to think about resilient supply chains result up to trillion dollars of opportunity by re-imagining supply chains."
The other aspect Sternfels highlighted in India's growth story is that over 650 million people are now digitally savvy in the country. "I come out more optimistic than pessimistic," he added.
When asked about talent and the future of work as offices start calling employees, senior partner and chief people officer at McKinsey & Company Katy George said the "new normal" is not going to be the pre-2019 era. "Global digital talent is going to be in high demand. The global workforce is demanding a lot more flexibility."
She also stated that companies need to renegotiate the future. "We see unprecedented times in workforce dynamics as there are still uncertainties right in the macro-economic conditions and layoffs in tech and US and at the same time huge job shortages and reallocation of where the jobs are."
She also warned that talent retention is a huge issue for every industry. "What we are seeing is not just a leverage in terms of compensation, but it is about workforce flexibility, it's about helping people connect better with a sense of purpose in the work that does, and it is about career and skill development," George noted.
Eric Kutcher, the company's chief financial officer (CFO) deliberated on issues, and the valuation crunch in the tech market, saying that the tech industry in what they are doing is still very healthy. "The foundation of the tech sector is going to continue," Kutcher said.
He also stated that there are unrealistic expectations of growth over the long period in the tech sector, but now, that growth has disconnected back due to higher interest rates. He also pointed out that the company sees a stock market reset amid the global funding winter.
Keeping India in perspective, Kutcher said, the country has "more potential in terms of startups considering its domestic market."
On the question of sustainability, ESG investment, and how significantly different the approach of organisations now, global co-leader of McKinsey Sustainability, Daniel Pacthod said, "After the energy crisis, the discussion is really about energy resilience."
The transition has to be affordable, secure, and clean from energy to net-zero carbon emissions, Pacthod added.
Checkout Budget Highlights 2023
