Make in India, but only for 10 years.

The only thing that India has in abundance, more than any other country in the world, is its population of 1.3 billion, with 65% below the age of 35 years. The only way our country will grow rich and powerful is if we are able to create jobs for all these young people and so Prime Minister Modi has stressed on 'Make in India' from his first day in office. After all, if we can put American satellites in space there is no reason why we should buy planes from them. But there are storm clouds ahead. In 2011 Germany announced Industry 4.0, which has been adopted by the rest of the world, with China aiming to get there by 2025. What is it? Industry 1.0 was mechanisation of production using steam, 2.0 was mass production using electricity, 3.0 used " simple " digitisation and 4.0 is going to be based on complex digitisation. What does it mean for labor? There will be jobs for unskilled labor at the bottom, presumably low paying, and highly skilled, high paid, jobs at the top, with nothing in between. There is already concern over 'hollowing out of the middle class'. India has about 10 years in which to make use of its demographic advantage before we are hit with massive changes in technology of production. Optimists say that technology will result in a dramatic increase in productivity and improve the way we live and work. How will that happen? Energy technologies will lower oil prices and renewable energy will be cheap. Biotechnologies in genetics and stem cells will improve health. Information technology will create an 'Internet of Things'. Manufacturing technologies will make products cheap through robotics and 3D printing. Financial technologies will make life easy through online banking and shopping. Defence technologies will reduce human casualties by using drones. The problem for economists is that they are unable to measure any growth in productivity despite such marvels in technology. So what gives? Productivity is measured as output per unit of input, which is taken to mean output per worker or output per hour. When productivity rises prices come down and the standard of living goes up. Some people say that most of the gains in productivity from improving technology have already been made, and watching movies on high speed internet is of little consequence, while others say that it takes time to change over from one means of production to another so the gains will be in the future. The nature of work itself has evolved from agriculture to manufacturing to services. India seems to have gone from agriculture, which employs around 22% of people, to services, without developing our manufacturing sector. The trouble is that a lot of today's services are free, so it is impossible to measure productivity. If there are no jobs how will people buy homes, gadgets and consumer items? Perhaps just migrate to other planets.