India will be the only country with a talent surplus in 2030, says Korn Ferry
As the population across the world ages, India’s vast and relatively young population is set to become one of the largest skilled labour forces in the world. According to a new report from HR consultancy Korn Ferry, India will be the only country in the world to have a talent surplus by 2030, amounting to nearly 250 million people.
Much has been said about the ascent of India and China to the helm of the global economy, with widespread predictions placing them as the highest two GDPs in the world by 2050. Among a number of other factors that might play a role in this progress, the sheer size of the population in both countries is of utmost relevance.
Population size is one of the crucial contributors to overall GDP, while one aspect of population that has been less considered historically is the median age of a country. In recent times, the age dimension has increasingly made its way into popular discourse, particularly as the major economies across the world have an increasingly high median figure.
Japan and Germany, for instance, are the oldest countries in the world behind only Monaco, with median ages exceeding 47. The median age across the EU also exceeds 40, while the median in the United States is approximately 38. Not only does this indicate a possible dip in productivity in the near future — it also spells a major shortage of talent in these countries in coming decades.
According to a new report from HR consulting firm Korn Ferry titled ‘The Global Talent Crunch,’ this talent shortage could have a major monetary impact on the global economy. By 2030, the report estimates that there will be a shortage of just over 85 million worker across the globe.
The potential revenue lost due to this lack of talent, as per the report, could amount to nearly $8.5 trillion for the global economy by 2030, $1.7 trillion of which could be lost by the United States itself.
In anticipation of such a scenario, businesses across the world are developing their capacity in automation and robotics, hoping to fill the gap left by the shortage of human capital. However, as has been extensively argued in recent times, automation might lead to replacement of some jobs, but it is unlikely to eliminate the need for human capital, as a new breed of jobs will emerge that require “human-machine collaboration.”
Therefore, not only will the number of workers across the globe decrease over the next decade, but the skills of some existing workers are also expected to become obsolete, thereby magnifying the problem. In order to deconstruct this equation, Korn Ferry has examined the global talent figures in some of the most important sectors, namely financial & business services, technology & communications, and manufacturing.
One trend is visible across the board in the report’s analysis: India will be the only country to have a surplus of talent by 2030. India has a median age of just over 27, which represents a large, digitally connected and productive workforce, who are increasingly accumulating advanced skills through a combination of government schemes and foreign investments.
As a result, India’s overall deficit by 2030 will be zero, compared to the deficit across parts of Africa, Europe and Australia, which is likely to reach up to 6 million workers. In major economies such as the US and China, the deficit is likely to extend even further to between 6 and 12 million people, while parts of South America and Southeast Asia are likely to see an “acute deficit” of between 12 and 18 million.
The financial services sector is likely to see the largest deficit across the world particularly in the United States and Europe. In the United States, the estimated financial cost of the talent shortage in financial services is monumental, amounting to $435 billion, followed distantly by the UK and France, with losses of $90 billion and $60 billion respectively.
India’s technology, media and telecommunications (TMT) sector is in no danger whatsoever. According to the report, India’s surplus in the TMT sector itself will amount to 1.3 million people, representing no loss in the sector, compared to losses of over $160 billion to the US and nearly $30 billion in the UK.
The manufacturing sector spells a similar scenario, wherein the surplus of Indian workers in the sector will amount to 2.4 million by 2030, while all other countries will experience a deficit. The deficit will cost China in particular, with the country’s projected losses exceeding $71 billion.
