India can count on a number of strengths as it strives to transform itself into a knowledge-based economy, noted Amitabh Kant, CEO of NITI Aayog in his valedictory address to the 2017 One Globe Forum. “India is growing at 7.6% per annum, it’s an oasis of growth in the midst of a very barren global economic landscape,” said Mr Kant. “The challenge for India today is to grow at 9 to 10% per annum, year after year, for a three-decade period, to be able to lift a very young population above the poverty line.”

India has a demographic youth bulge, with 100 million young people joining the workforce over the next decade. Given this demographic trend, it’s important for India to grow and create jobs. “The population in India is getting younger and will keep getting younger till 2040, whereas the population across Europe and America is getting older,” said Mr Kant. He observed that India is passing through “a window of demographic transition” with 72% of its population below 32.

Mr Kant pointed out that India urgently needed to address six core areas to transform into a 21st century knowledge economy and reap enormous demographic dividend.

Firstly, India needs to cut red tape and dismantle bureaucracy to make the country business-friendly. “Over the last 70 years, India has turned into a very difficult place to do business. We need to cut paperwork and procedures — make it simple for businesses to create wealth,” said Mr Kant.

Mr Kant who is the Narendra Modi government’s pointman for investments, talked about how India ranked states on the ease of doing business. In the first year, Gujarat ranked No.1, Andhra came second and the mineral-rich states of Jharkhand and Chhattisgarh came third and fourth. In the second year, Gujarat was toppled by Andhra and Telangana. “The naming and shaming of states and putting the rankings in the public domain worked. It harbored competition and enabled states to move forward. People must know how their leaders are performing, they must be held accountable,” said Mr Kant.

Secondly, capitalism alone, isn’t enough to remake Third World economies, globalism is the key. “India must realize that it’s an integral part of the global supply chain. We live in a highly globalized world despite protectionism, Trumpism and Brexit,” said Mr Kant. “India needs to open up its economy and we have been doing that in a major way.”

Thanks to government reforms, India has become the top destination for foreign direct investment (FDI) worldwide. India raced past China in 2015 — which was at the top for many years — with $63 billion worth of foreign investment, according to fDi Intelligence, a unit of the Financial Times group. “We’ve beaten China and are the No. 1 recipient of FDI, but India needs to open up more on trade policy. No country has grown without being a major exporting nation,” observed Mr Kant.

Thirdly, India must quickly become a leading global startup hub. ”India has about 19,400 startups valued at $75 billion. By 2024, we will see nearly 100,000 startups with a valuation of around $500 billion,” said Mr Kant. “The Director of IIT, Mumbai told me that 37% of the graduating class joined or launched a start-up.”

The government is trying to foster startups by creating 500 new tinkering labs, 100 new incubation centers while assisting existing incubators. Notably, India is seeing the rise of a new generation of trailblazing female startup founders. Prashnu Bhandari created Culture Alley, a platform for people to learn foreign languages, while Meena Ganesh launched Portea Medical, a startup that provides in-home healthcare.

“Prashnu Bhandari, the co-founder of Culture Alley, started it as a platform for people to learn foreign languages like Spanish, Mandarin and Japanese,” said Mr Kant. “Then she created Hello English which has taught 9 million Indians how to speak English — eclipsing any school!”

Mr Kant said startups like Portea Medical, Practo, Mitra Biotech, and Consure Medical were firing up the healthcare segment, while SocialCops, a data intelligence startup, was helping the government take data-intelligent decisions. ”Shanti Mohan, the founder and CEO of LetsVenture, India’s largest online marketplace for angel investors and startups has ensured investors from abroad are able to fund our startups,” acknowledged Mr Kant.

Fourthly, India must become the innovation centre of the world. “In the last four years, we have seen 1,500 multinationals relocate to Bangalore and Hyderabad,” said Mr Kant. He pointed out that the health care arm of US-based General Electric had created the computed tomography imaging system called the HiSpeed Dual in India. Similarly, Indian engineers were creating the software for Philips’ consumer electronics.

“India’s unique combination of entrepreneurship, innovation and skills drive frugal engineering and innovation on a global scale,” said Mr Kant. “That’s why Renault — which in its 118 year history has never originated a car outside Europe — came to Chennai, innovated, designed and manufactured a car called the Renault Kwid. Today, the Renault Kwid is exported to over 40 countries from India. Similarly, carmaker Hyundai exports 60% of its production from India to 123 countries.”

Fifthly, how India drives sustainable urbanization is key to successful development. Mr Kant said urbanization had ebbed across Europe, America and China, but was expanding in India. “When the West urbanized, land, gas and water were cheaply available. They created cities like Atlanta where 99% of the people travel by car so they created some of the most polluting cities of the world. Now, India cannot follow that model because if you do, the world will require four Earths,” Mr Kant told the forum. “India needs a sustainable development model. We need to make our cities very compact, we need to do dense development, we need public transportation, we need to recycle water and waste. India has been a reluctant urbanizer, but effective urbanization will fuel long-term growth,” said Mr Kant.

Sixthly, accelerating technology is India’s opportunity to leapfrog. “India can grow at 9 to 10% if we use technology to leapfrog to a higher rate of growth. We need to become the most disruptive nation,” said Mr Kant. “The most important thing is the push for digitization. India will soon use Aadhar Pay which is a biometric-based system that will allow Aadhar account holders to do transactions.” He added that digital governance platforms would help the government improve the distribution of subsidies.

Mr Kant ended his speech on a note of optimistic determination; “I think our innovative spirit, startup movement, process of rapid urbanization and push to grow rapidly by leapfrogging technology will transform India into a 21st Century knowledge economy. We are a nation full of optimism.”