Paul Krugman, the Nobel-Prize winning economist, said that India may benefit from the globalization process by an export of services, but the country might end up with mass unemployment.
At the News 18 Rising India Summit, Paul said, “India’s growth story is quite unique. Services propelling growth to an extent that hasn’t been seen anywhere else in the world and the possibilities of service globalisation has only just begun. Globalisation of service trade has a huge potential. That’s one reason to be especially hopeful of India’s progress. It has the first-mover’s advantage here.”
“As the world’s economies took off because of growth in the manufacturing sector, India stood apart and unique. It exported services, which was unprecedented,” he also added.
The statistical changes in India’s economy can only benefit the country if it can provide jobs for the working age population, mentioned Krugman. He alerted that lack of manufacturing sector in India might work against the country. “India’s lack in the manufacturing sector could work against it, as it doesn’t have the jobs essential to sustain the projected growth in demography. You have to find jobs for people,” he pointed.
Pressing on the fact that India needs to utilize its working age population, he also said: “Japan is no longer a superpower because its working-age population declined, and China is looking the same. In Asia, India could take the lead but only if it also develops its manufacturing sector, not only the services one.”