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India should worry more about AI than being China’s export competitor: McKinsey Global Institute director Chris Bradley

Chris Bradley, director at McKinsey Global Institute believes that India’s vibrant young workforce is a crucial advantage in the country’s ambitious goal to become a developed nation by 2047. Bradley emphasizes that India’s participation is essential for global prosperity in the future. “The world in 2050 cannot be prosperous without India participating in it,” Bradley told ET in an interview.
Bradley points out that while China will face a decline in its workforce due to aging, India will experience an increase of at least 220 million workers through farm migration.This shift will significantly impact the global labor pool, favoring the Global South, he said.
However, Bradley highlights the need for India to capitalize on this demographic change by encouraging more people to migrate to cities and increasing productivity. He notes that India’s current labor productivity is insufficient to meet global demands, with productivity levels being 1/8th of Japan and 2.5 times lower than China.To address these challenges, India must double its urban population and undergo a productivity revolution, which requires more capital, he pointed out. While India’s urbanization rate is less than half of China’s (29% compared to China’s 65%), Bradley believes that access to capital should not be an issue as India offers healthy returns and is not overleveraged. “India has a fairly healthy balance sheet; it’s not over-leveraged. It’s got a large public government deficit. You can have a large deficit if your growth is high,” he was quoted as saying.
Bradley also identifies domestication and rural concentration as obstacles that the Indian government needs to overcome. Additionally, he emphasizes the importance of investing in research and development to enhance India’s R&D to GDP ratio, which currently falls below the OECD average – 0.6% compared to around 2.7% for OECD.
Read From ET | Chris Bradley’s viewpoint on India
India’s participation in value chains and its energy requirements are also crucial factors for achieving prosperity. Bradley asserts that India needs at least five times more energy per capita to become a first-world country. Furthermore, he believes that India, along with China, will shape the pace of decarbonization globally.
While India has potential in services exports, Bradley suggests that the country should be more concerned about Artificial Intelligence (AI) rather than China as an export competitor. He advises India to navigate the transition to a developed country in a world characterized by green energy concerns, restrictions on capital, access to free knowledge, and the rise of AI.



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