China is improving in the manufacturing sector, but India is improving
in the services sector, and the game of business is won on services,
not manufacturing!
http://www.foreignpolicy.com/story/cms.php?story_id=3348
India Outsmarts China
By Diana Farrell
Page 1 of 4
The economic race between China and India is changing the way the
world does business. By 2050, it is estimated that these two Asian
heavyweights will account for nearly half the world's gross domestic
product, up from just 6 percent today. But whose model is better,
China's low-cost factories or India's low-cost financiers? For all the
benefits of China's swift rise, India's brain power will finally give
it the tools to catch up.
Reaping the Benefits
China's explosive growth has delivered new prosperity to millions of
its citizens, whereas India's advance has been more gradual. In China,
massive public-works projects and a strong manufacturing sector have
so far been a successful recipe for jobs, making its population nearly
twice as rich as India's.
SOURCE: MCKINSEY GLOBAL INSTITUTE AND GLOBAL INSIGHT
Diana Farrell is director of the McKinsey Global Institute.
Creature Comforts
Page 2 of 4
Creature Comforts
China's wealth has brought the trappings of middle-class life to a new
generation of urbanites. The average Chinese city dweller owns a
television or two, does laundry with the help of a wa****ng machine,
and stays connected with a mobile phone. India, lacking China's knack
for producing cheap consumer goods, is still playing catch-up.
SOURCE: MCKINSEY GLOBAL INSTITUTE
At Your Service
Page 3 of 4
At Your Service
Manufacturing is not a stable source of job growth even in China,
which has already shed 15 million manufacturing jobs in the past
decade. That's why India's economy, half of which is made up of
service-sector companies, is growing smarter. Indian businesses plying
advice in medicine, technology, and finance will continue to grow
steadily over the next decade, while China's vaunted manufacturing and
construction booms will wane.
SOURCE: MCKINSEY GLOBAL INSTITUTE AND GLOBAL INSIGHT
The Right Stuff
Page 4 of 4
The Right Stuff
India is not only producing more young professionals, it is producing
better qualified ones, too. According to a survey of local recruiters,
only 10 percent of China's engineers have the skills necessary to work
in a multinational cor****ation, compared to 25 percent of engineers in
India. By 2008, India's total pool of qualified graduates will be more
than twice as large as China's. If India's universities continue to
churn out top-notch talent, its younger, cheaper, and larger
professional workforce could help India edge out its neighbor to the
east.
SOURCE: MCKINSEY GLOBAL INSTITUTE
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