Interview

“Digitising new sectors could create $10bn-$150bn economic value by 2025”

In a new study, McKinsey Global Institute notes how digital technology can transform traditional business

Over the past few years, India has established its presence as a ‘digital economy’. Smart phone use is booming and data prices have dropped to an all time low. In the backdrop of these developments, McKinsey Global Institute, in its study titled ‘Digital India: Technology To Transform A Connected Nation’, finds out what this increased connectivity means in economic terms and which are the sectors that could benefit from digital transformation. Outlook Business caught up with Anu Madgavkar and Alok Kshirsagar from McKinsey to understand more about the findings of this report. Edited excerpts:

Could you give us an overview of the insights this report offers?

Madgavkar: For MGI, innovation and technology is one of our core global research pillars. In the context of advanced economies and developing economies, we have done many research pieces on technology and digital in particular. But this report is a little special as it represents insights that we gathered at a very granular level from India. It also has a lot of real life examples.

Kshirsagar: The report has a perspective on how it works and how do we scale it up. We have moved beyond just the showcase aspect of digital. Secondly, there is very high variation between intent to have digital strategy and the actual results from it. Even in a FMCG or retail context, if you look at digital channel as a form of advertising and basic fulfillment, you will make a basic investment in customer experience, payment ease and order fulfillment. But if you see it as the equivalent of 500 stores, then the mindset with which you will invest will be fundamentally different. The ability to drive on digital infrastructure that our country has is what we are talking about.

Anu Madgavkar, Senior fellow of the McKinsey Global Institute

What are some of the findings that surprised you?

Madgavkar: The first part of the report establishes the tremendous surge

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