As we celebrate India’s 78th Independence Day, aspirations are high to become a developed nation by 2047. However, the World Bank recently said that India may just reach the level of a middle-income country without becoming a developed one. Why? The fragile global economy battered by geopolitical risks and Climate change hitting global economy are major risks on the way. Can we convert this adversity into an opportunity?
Can we reimagine the vision for Viksit Bharat by responding to the biggest risk and opportunity the world is facing: Climate change and unsustainable growth? India itself has a Net Zero target of 2070 and is estimated to need $10 Trillion to meet this target. Getting this level of investment has been challenging. If we do manage it, the returns can be significant. In the report “Gearing up the Indian workforce for a Green economy” done last year by Skills Council for Green Jobs and Sattva Consulting, it was estimated that India has the potential to add 35 Million new green jobs by 2047 and unlock $1 Trillion in value by 2030 and a likely $6 Trillion by 2047.
There is a bigger opportunity beyond this: to become the ESG and Climate Solutions provider to the world! Most countries have a Net Zero target of 2050 and reaching it requires cumulative investments of $200 Trillion by 2050 as per two independent studies: Bloomberg NEF analysis and Climate Policy Initiative/Allen & Ovary report: “How-big-is-the-Net-Zero-financing-gap-2023”.
Where are the $200 Trillion worth of investments going to go? In creating products, services and solutions that mitigate Climate Change and its root causes, while building capacity to deal with it. While the Global North is banking primarily on technology, especially AI, to do this, we will also need innovative, smart and creative people to cater to the above needs. Can India provide such people to the world?
India has become an IT/ITES preferred service provider to the world with revenues expected to cross $250 Billion in 2024. The Indian IT sector has managed to gain a market share of 35% globally. Now, the opportunity beckons India to diversify its knowledge work by offering ESG and Climate Solutions. This will not only ensure that India itself takes a balanced growth path next 25 years, but also leverage the economic opportunity arising from helping the world to meet its 2050 NZ target.
How can we do this? By upskilling India’s talent on ESG and Climate, while leveraging adjacent soft skills of analysis, creativity and innovation.
Most work on reaching Net Zero targets needs multiple workstreams requiring specifically skilled and trained knowledge workers. India has a large talent pool of knowledge workers as seen in the growth of Global Capability centers (GCC) providing a revenue of $46 Billion last year. GCC revenues for India are expected to grow 3 times to $121 Billion by 2030. Indian talent pool is a natural fit for knowledge work. This talent pool can be upskilled n creating ESG and Climate Solutions.
However, beyond knowledge work, actual value creation through de-carbonization is an engineering problem. While it is necessary to estimate, calculate and set net zero scenarios and targets, the imagination and creativity required to find solutions, to re-engineer processes and to innovate in search for new solutions requires significant human effort and ingenuity. India produces roughly 1.5 million engineering graduates per year. Compare this to USA, that produces only 0.1 million engineers every year. It is not just the numbers advantage.
Frugal innovation is the core competency required in all workable decarbonization solutions. Indians have a demonstrated track record in frugal innovation. Mangalyaan, ISRO’s Mars Orbiter Mission (MOM) not only achieved a great leap for India, it also did so at a record low cost of $70 Million. Solving for Net Zero targets across the world is equally challenging: limited funding, need for disruptive innovation and a race against time as the world faces runaway climate change.
This is the true opportunity for India to rise to the occasion with the best that it has to offer: knowledge and frugal innovation. If we can do this, India will not only reach Viksit Bharat 2047 with absolute certainty, but it will also end up playing a major role in saving the world from climate extinction.
Singapore has already realized the value of capacity building and has created a state corpus of US$73.61 million in grant funding for capacity building of its people on climate risk and solutions for sustainable and transition finance. London has been building its position as the Sustainable Finance capital of the world. New York is not far behind. However, among large countries, the opportunity to take the lead still exists.
We need to unlock our imagination for this once in a generation opportunity. China had its moment in manufacturing 3-4 decades ago. We should accept it and move on. ESG and Climate Solutions led knowledge services is India’s moment. Let us seize it.
There is a first mover advantage still available here. If India can leverage it, there is $200 Trillion of products, services and solutions to be sold. A first mover country could capture 20% market share, potentially bringing $40 Trillion of new revenues to India. Combined with traditional growth momentum that could deliver $20 Trillion on business-as-usual basis, we are looking at a total of $60 Trillion GDP by 2047. This is more than enough to secure India as a developed country by 2047. It will add millions of new jobs and upskill millions of existing jobs, setting an example for the world in terms of Just Transition. It will be a big Leap for India but a bigger leap for the world.
About the Author: Vipul Arora, Partner, ESG and Climate Solutions, Sattva Consulting. Author of the book: “Essence of ESG”.
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