India Energy Stack: A Digital Public Infrastructure for the Future

 

Transforming India’s Power Sector through the India Energy Stack: A Digital Public Infrastructure for the Future

Author: R. Kannan Corporate and Economic Advisor | Member, Harvard Business Review Editorial Council

Abstract

India’s energy sector stands at the confluence of rapid demand escalation, ambitious decarbonization commitments, and a once-in-a-generation opportunity to redefine public infrastructure through digital innovation. The India Energy Stack (IES) emerges as a pioneering Digital Public Infrastructure (DPI) intended to address long-standing inefficiencies across the power value chain while laying the technological and institutional foundation for a resilient, inclusive, and intelligent energy ecosystem. This paper articulates the vision, architecture, and strategic execution pathway for the IES, drawing inspiration from India’s digital achievements in identity and payments. It explores the challenges of legacy infrastructure, cybersecurity, data privacy, and regulatory harmonization—while also illuminating the massive opportunity for global digital leadership, market innovation, and consumer empowerment. The IES is not merely a technology platform—it is a shift in governance philosophy for the 21st-century energy transition.

1. Introduction: Digitizing the Lifeblood of a Rising Economy

India’s energy sector, once defined by under-electrification and inefficiencies, now faces the reverse challenge: managing abundance, variability, and scale. By 2035, India is projected to account for the fastest-growing primary energy demand among G20 nations. Meeting this demand in a sustainable, inclusive, and secure manner requires breaking away from siloed planning and static operations.

Enter the India Energy Stack (IES)—a DPI designed to replicate the success of Aadhaar (digital identity), UPI (payments), and Account Aggregator (data consent). Through standardized APIs, real-time data flows, unique digital identifiers, and layered analytics, the IES seeks to modernize grid operations, democratize energy access, and foster innovation on a national scale.

2. India’s Energy Landscape: Legacy Foundations in Transition

2.1 A Fossil-Dominated Mix and Structural Complexity

As of mid-2025, fossil fuels still power 78% of India’s electricity generation, with coal contributing over 64% to rising demand. While coal is domestically abundant, India remains heavily reliant on imports for petroleum and liquefied natural gas—leaving the energy economy exposed to global market volatility.

Natural gas plays a modest role (under 7%) but offers growth potential in urban mobility and industrial heating. Biomass use continues in rural cooking and heating but is gradually replaced by LPG and electricity.

2.2 Infrastructure, Finance, and Governance Bottlenecks

Despite accelerated generation capacity, India’s grid continues to struggle with high AT&C (Aggregate Technical and Commercial) losses, especially across state-run DISCOMs. Issues range from poor metering to billing inefficiencies, legacy IT systems, and slow grievance redressal. Regulatory fragmentation across centre and states further compounds decision latency, discouraging private investment in innovation.

3. Renewable and Nuclear Energy: Scaling the Clean Transition

3.1 Clean Energy Trajectory

India has achieved remarkable growth in non-fossil energy—installing 226.9 GW of renewable energy and 8.8 GW of nuclear power by mid-2025. Solar is the dominant contributor, with rooftop and agricultural solar schemes (e.g., PM-KUSUM and PM-Surya Ghar) driving inclusive growth. Wind capacity has also doubled over a decade, now exceeding 51 GW.

India is now the world’s third-largest generator of wind and solar electricity, surpassing Germany in 2024. Large hydropower accounts for about 9% of clean power capacity.

3.2 Nuclear Energy: Strategic Expansion with Innovation

With a target of 100 GW by 2047, nuclear energy is poised to be India’s clean base-load alternative. Beyond conventional reactors, government-backed programs are investing in Small Modular Reactors (SMRs) and thorium-fuel cycles—leveraging India’s domestic resources and research capabilities. The creation of “Bharat Small Reactors” (BSRs) and the Union Budget’s “Nuclear Energy Mission” represent foundational steps toward a diversified, low-carbon energy future.

4. The India Energy Stack: Vision, Scope, and Institutional Intention

The India Energy Stack is not a single application but a comprehensive, modular architecture that unifies digital identities, real-time data exchange, analytics engines, consumer applications, and regulatory interfaces into a single interoperable framework.

4.1 Design Principles

• Open by Default: Built using open standards (e.g., CIM, IEC 61850), enabling vendor neutrality.
• Consent-Driven: Inspired by DEPA and Account Aggregator models, consumer control over data is central.
• Interoperable: API-first approach ensures seamless integration across legacy and modern platforms.
• Modular and Scalable: Designed to evolve with emerging technologies, from AI to quantum cryptography.

4.2 Functional Scope

• Foundational Registries: Unique digital IDs for energy consumers, grid assets, and transactions.
• Unified Communication Layer: Open APIs with standardized data models to enable secure data flow.
• Analytics Engine (UIP): AI-driven forecasting, anomaly detection, and asset optimization.
• Consumer Services: Digital billing, real-time consumption insights, grievance redressal, and portability.
• Innovation Layer: Developer sandbox, peer trading modules, EV-grid coordination, and new market models.

5. Systemic Benefits and National Value Creation

5.1 Technical and Operational Efficiencies

• Real-time grid management through smart meters and digital twins.
• Loss reduction and demand forecasting, minimizing network overloads.
• Predictive maintenance, extending asset life and reducing unplanned outages.

5.2 Empowered and Informed Consumers

• Access to detailed usage analytics, alerts, and budget tools.
• Participation in dynamic pricing and demand response (DR) programs.
• Energy service portability and improved customer support.

5.3 DISCOM Financial Viability

• Accurate billing and digital collections reduce revenue leakage.
• Data-driven power procurement improves margin management.
• Centralized grievance tracking ensures faster resolution and trust.

5.4 Ecosystem Innovation and Market Deepening

• Peer-to-peer trading, virtual power plants (VPPs), and decentralized marketplaces.
• Support for energy-as-a-service (EaaS) and DER aggregation businesses.
• Boost to cleantech startups through standardized data access and APIs.

5.5 Policy Agility and Governance Intelligence

• Granular insights for regulatory design, subsidy targeting, and real-time compliance.
• Simulation models for planning transmission upgrades and RE integration scenarios.
• Climate-smart planning for distribution infrastructure in vulnerable geographies.

6. Roadblocks to Realization: Implementation Complexities

6.1 Institutional and Technical Fragmentation

• Siloed IT systems across DISCOMs, GENCOs, and SLDCs.
• Lack of universally adopted data standards and registries.

6.2 Cybersecurity and Data Privacy

• Increasing cyber threats to OT and IT layers demand zero-trust architecture.
• Consent architecture and compliance with India’s Digital Personal Data Protection Act (DPDP Act, 2023) are non-negotiable.

6.3 Human Capital Gaps

• Low digital literacy among DISCOM field staff and rural consumers.
• Need for retraining programs across engineering, billing, and consumer service domains.

6.4 Regulatory and Fiscal Friction

• Inconsistent state-level regulations for digital investments.
• Funding constraints in financially distressed utilities limit digital adoption.

7. Strategic Roadmap: Phased Execution to Full Stack Maturity

7.1 Policy and Governance Foundation

• National Digital Energy Policy under Ministry of Power to provide statutory clarity.
• Legislation to formally establish National Energy Digital Authority (NEDA) with full-time CEO and zonal offices.

7.2 Technical Infrastructure Deployment

• Creation of secure, scalable Consumer ID and Asset ID registries.
• Rollout of API Gateway, Data Lake, and Consent Management System.
• Adoption of Common Information Model (CIM) across all digital interfaces.

7.3 Early-Stage Proof of Concepts (PoCs)

• Diverse DISCOMs across demographics, renewable load, and digital readiness to serve as pilots.
• Metrics include AT&C loss reduction, grievance resolution time, and renewable integration reliability.

7.4 Workforce and Consumer Enablement

• Digital training through ITIs, engineering colleges, and on-the-job DISCOM workshops.
• Mass communication campaigns in vernacular languages to build public awareness.

7.5 Innovation Promotion and Funding

• Establishment of Energy Innovation Sandbox for third-party developers.
• Blended finance instruments, including green bonds, to fund national rollout.
• Performance-linked incentives for DISCOMs based on digital KPIs.

8. The Five-Layered Digital Architecture of IES

8.1 Foundational Layer

• ECIDs for all consumers, integrated with Aadhaar/KYC standards.
• Asset IDs aligned to IEC 61968 for transformers, meters, and RE installations.
• Immutable transaction IDs for metering, payments, and grid operations.

8.2 Interoperability and Exchange Layer

RESTful APIs, secured through OAuth 2.0 and role-based access controls, will enable standardized, real-time communication between legacy systems, modern cloud-native applications, and third-party services. A dedicated API Gateway will manage authentication, throttling, and access logging.

• Common Information Model (CIM) compliance ensures semantic consistency in data interpretation.
• Message queues and event-streaming platforms (e.g., Apache Kafka) will handle high-frequency data like smart meter readings and grid anomalies.

8.3 Analytics and Utility Intelligence Platform (UIP)

The UIP acts as the computational brain of the IES.

• AI/ML engines will forecast load, detect anomalies (e.g., power theft, line faults), and optimize dispatch.
• Digital twins replicate grid infrastructure to simulate stress scenarios or plan upgrades.
• Visualization dashboards will serve regulators, DISCOMs, and policymakers with tailored KPIs and insights.

8.4 Application and Ecosystem Layer

This topmost layer enables service delivery, innovation, and stakeholder interaction.

• Consumer apps offer real-time billing, usage comparisons, and participation in green energy programs.
• DISCOMs benefit from tools for field-force management, predictive maintenance, and outage restoration.
• Developers can create new services via open APIs and access anonymized data in a secure Innovation Sandbox.
• Peer-to-peer marketplaces, EV smart charging systems, and local energy communities will flourish through modular plug-ins.

8.5 Governance, Security, and Consent Layer

This horizontal layer ensures compliance and resilience:

• Cybersecurity protocols, incident response systems, and hardware-level endpoint protection.
• Consent architecture ensures all data flows are user-permitted, auditable, and revocable at any time.
• Regulatory dashboards will monitor market behaviour, subsidy leakages, and systemic vulnerabilities.

9. Organizational Design: The National Energy Digital Authority (NEDA)

To anchor the IES, the proposed NEDA must combine autonomy, cross-functional expertise, and agile decision-making.

9.1 Structural Blueprint

• Chairperson and Governing Board: Strategic oversight, budget approvals, and national representation.
• CEO: Executive authority for program management, inter-agency coordination, and stakeholder engagement.
• Divisional Heads: Oversee core units—Identity & Registry, Platform Architecture, Cybersecurity, Analytics, Legal, Consumer Affairs, Finance & HR.

9.2 Zonal Presence and Sectoral Integration

• Regional offices for North, South, East, West, and Northeast India to ensure geographic equity.
• Sectoral advisory groups representing DISCOMs, renewable developers, EV operators, and consumer rights organizations.

9.3 Culture and Principles

• Digital-first operations, paperless administration, and agile procurement.
• Embedded transparency and public engagement practices, modelled after UIDAI and NPCI.
• A public grievance platform integrated with the IES itself.

10. India’s Global Opportunity: Benchmarking a New Energy Governance Model

By executing IES effectively, India has the potential to:

• Export the IES model to emerging economies in Asia, Africa, and Latin America, particularly those pursuing SDG 7 goals.
• Lead global discussions on energy DPI standards, cyber norms, and decentralized governance.
• Anchor itself as a cleantech innovation hub, attracting startups and investors seeking interoperable, secure energy markets.

Just as UPI has set digital finance benchmarks globally, IES could become the blueprint for energy digitalization at scale, particularly in data-rich but infrastructure-fragmented economies.

11. Conclusion: Laying the Cables for a New Social Contract

The India Energy Stack is more than a technological layer—it is an architectural re-imagination of the social contract in electricity provisioning. It aims to position electricity not merely as a commodity but as a digitally mediated right—inclusive, transparent, and intelligent.

Realizing this vision requires:

• Sustained political resolve and cross-government coordination.
• Robust institutional capacity and agile bureaucracy.
• Strategic public investment followed by open innovation.

If India delivers on this frontier, it will not only energize its billion-plus citizens with greater dignity and choice, but also shine a light for the world on how to digitalize development—cleanly, inclusively, and securely.

 

Global Poverty at Crossroads: India's Remarkable Path Amidst a "Lost Decade"

 

Global Poverty at Crossroads: India's Remarkable Path Amidst a "Lost Decade"

The latest World Bank reports on poverty paint a stark picture: the global fight against extreme poverty is at a near standstill, threatening to make the current decade a "lost" one for poverty eradication. However, amidst this challenging backdrop, India emerges as a powerful counter-narrative, demonstrating significant strides in lifting millions out of poverty, even as global thresholds rise and multiple crises converge.

The World Bank's "Poverty, Prosperity, and Planet Report 2024" and related updates in June 2025 offer a comprehensive look at global poverty, with India emerging as a significant case study.

New International Poverty Line:

Globe : The World Bank has officially updated the global extreme poverty line to $3.00 per person per day (2021 PPP), a notable increase from the previous $2.15/day (2017 PPP). This adjustment reflects the evolving cost of living in low-income countries and aims for a more accurate representation of global poverty.

India : This new line has a significant impact. While the global extreme poverty count increased by 125 million people due to this higher threshold, India's robust poverty reduction figures, based on its latest Household Consumption and Expenditure Survey (HCES) 2022-23, have somewhat offset this global increase. For India, under the new $3.00/day line, the extreme poverty rate stood at 5.3% in 2022-23, a sharp decline from 27.1% in 2011-12. This translates to a significant number of people moving out of this revised poverty definition.

Slowdown in Poverty Reduction:

Globe: The report highlights a concerning trend: the pace of global poverty reduction has slowed dramatically, almost to a standstill. This suggests that achieving the UN Sustainable Development Goal of eradicating extreme poverty by 2030 is increasingly unlikely. The period from 2020-2030 is feared to be a "lost decade" for poverty eradication efforts.

India: India, however, is a notable exception to this global slowdown. Its substantial progress in poverty reduction, particularly between 2011-12 and 2022-23, stands in stark contrast to the general global trend. While other regions struggle, India has managed to maintain a strong downward trajectory in its poverty rates.

Current Extreme Poverty Figures:

Globe: Even with the new $3.00/day line, almost 700 million people globally remain in extreme poverty. Using the older, still often referenced, $2.15/day line, the number remains high, underscoring the scale of the challenge.

India: India has made remarkable strides. While 129 million Indians were estimated to live in extreme poverty (less than $2.15/day) in 2024, this is a dramatic reduction from 431 million in 1990. More recent data for 2022-23 indicates that India's extreme poverty rate using the $2.15/day line has fallen to just 2.3%, translating to approximately 33.6 million people. This is a massive achievement. When considering the new $3.00/day line, India's extreme poor count is around 75.2 million in 2022-23.

Concentration in Sub-Saharan Africa:

Globe: Sub-Saharan Africa is increasingly becoming the epicentre of extreme poverty, accounting for about two-thirds of the world's extreme poor. This region faces unique challenges that hinder poverty reduction.

India: This point highlights India's divergent path. While Sub-Saharan Africa struggles with a concentration of poverty, India has actively decentralized its poverty, bringing down rates across its vast and populous states. India's success significantly reduces its share of global extreme poverty.

Impact of Polycrisis:

Globe: The "polycrisis" – a combination of slow economic growth, the lingering effects of the COVID-19 pandemic, rising global debt, increasing conflict and fragility, and severe climate-related shocks – has significantly undermined poverty reduction efforts worldwide.

India: India, despite facing its own share of these global challenges (e.g., economic slowdowns, pandemic impact, climate events), has demonstrated resilience in its poverty reduction efforts. Government initiatives like free and subsidized food transfers and other welfare programs are cited as factors that helped mitigate the impact of these crises on the most vulnerable.

Poverty Above Pre-Pandemic Levels in Poorest Countries:

Globe: In many of the poorest economies, extreme poverty levels remain higher than they were before the COVID-19 pandemic, signalling a regressive trend in these vulnerable nations.

India: In contrast, India has managed to bring its extreme poverty rates below pre-pandemic levels. The latest World Bank data suggests that India's recovery from the pandemic's economic shocks has been more effective in protecting its vulnerable population from falling back into extreme poverty.

Higher Poverty Lines Reveal Wider Poverty:

Globe: When a higher poverty standard, more typical of upper-middle-income countries ($6.85 per person per day), is used, almost half of the world's population (around 3.5 billion people) remains in poverty, and this number has stagnated since the 1990s due to population growth.

India: For India, under the lower-middle-income country (LMIC) poverty line, now revised to $4.20/day (up from $3.65/day), India's poverty rate fell from 57.7% in 2011-12 to 23.9% in 2022-23. Even at the $6.85/day line, more Indians are currently below this line than in 1990, primarily due to population growth, highlighting that while extreme poverty is down, a significant portion of the population still lives with limited economic buffers.

Stalled Shared Prosperity:

Globe: Progress in shared prosperity, measured by income growth for the bottom 40% of the population, has also slowed globally, indicating that economic gains are not being sufficiently shared across all segments of society.

India: While specific data on shared prosperity for the very latest period for India might require deeper dives into the report, India's overall poverty reduction and improvements in consumption inequality (Gini coefficient decreased from 0.266 to 0.237 in rural areas and from 0.314 to 0.284 in urban areas between 2022–23 and 2023–24) suggest a move towards more inclusive growth, though challenges in income distribution may still exist, especially considering the formal vs. informal employment dynamics.

Persistent Inequality:

Globe: Income inequality remains high in many parts of the world, especially in regions like Latin America and Sub-Saharan Africa.

India: India has shown improvements in consumption inequality, as indicated by the Gini coefficient. However, the World Inequality Report 2022 indicates that in India, men earn 82% of the labour income, while women earn only 18%, pointing to significant gender-based income disparities. Overall, despite poverty reduction, challenges related to income inequality persist.

Climate Change as a Fundamental Risk:

Globe: Climate change is a major threat to poverty reduction, with nearly one in five people globally vulnerable to severe welfare losses from extreme weather events.

India: India is highly vulnerable to climate change impacts, with a large population dependent on agriculture and living in climate-sensitive regions. This poses a significant risk to the sustained progress in poverty reduction, as climate shocks can push vulnerable populations back into poverty.

Disproportionate Impact of Climate on the Poor:

Globe: Poor communities, especially in rural areas, are more exposed to and less resilient against climate risks, often lacking access to adaptive measures and recovery support.

India: This is particularly relevant for India, where a substantial portion of the population resides in rural areas and is engaged in climate-dependent livelihoods. Extreme weather events like floods, droughts, and heatwaves disproportionately affect these vulnerable communities, undermining their economic stability.

Debt Burden in Developing Countries:

Globe: The pandemic and other shocks have led to a significant increase in public debt in developing countries, diverting resources from essential public services.

India: While India's external debt situation is managed, the overall debt burden on the government can impact its ability to fund social welfare programs crucial for poverty alleviation, especially amidst increased spending needs and potential global economic downturns.

Need for Faster and More Inclusive Growth:

Globe: Sustainable poverty eradication requires not just growth, but growth that is faster and more inclusive, creating better job opportunities for the poor.

India: India's recent economic growth has been significant, contributing to poverty reduction. However, the challenge lies in ensuring this growth translates into high-quality, formal jobs across all sectors, especially for the large informal workforce. The report implicitly suggests that India's recent growth has been conducive to poverty reduction.

Investment in Human and Physical Capital:

Globe: Investing in education, healthcare, and infrastructure is vital to empower the poor and enable their participation in economic growth.

India: India has made significant investments in these areas through various government schemes (e.g., Ayushman Bharat for healthcare, Jan Dhan Yojana for financial inclusion, PM Awas Yojana for housing, Jal Jeevan Mission for water). These investments have played a crucial role in the observed multidimensional poverty reduction.

Importance of Social Protection:

Globe: Many people in poverty, particularly in Sub-Saharan Africa, lack access to adequate social protection systems.

India: India has extensive social protection programs, including the Targeted Public Distribution System (TPDS) providing subsidized food grains, MGNREGA for rural employment, and various direct benefit transfer (DBT) schemes. These safety nets have been instrumental in protecting vulnerable households from economic shocks and contributing to poverty reduction.

India's Significant Progress (Statistical Outlier):

Globe: India's performance stands out as a positive outlier in the global poverty landscape.

India: As mentioned earlier, India has lifted a massive number of people out of extreme poverty. Under the $2.15/day line, 171 million people were lifted between 2011-12 and 2022-23. Using the $3.65/day line (lower-middle-income), this figure rises to 378 million people in the same period. This scale of poverty reduction is unparalleled in recent global history.

India's Revised Poverty Profile:

Globe: The World Bank's revised data for India, based on the HCES 2022-23, has led to a significant recalculation of India's poverty rates.

India: The extreme poverty rate in India (using the $2.15/day line) plummeted from 16.2% in 2011-12 to a remarkable 2.3% in 2022-23. Even with the new, higher $3.00/day line, the rate for India in 2022-23 is reported at 5.3%, showing substantial progress despite the elevated threshold.

Multidimensional Poverty Reduction in India:

Globe: Multidimensional poverty considers deprivations beyond just income, including health, education, and living standards.

India: India has achieved significant success in reducing multidimensional poverty. The World Bank's Multidimensional Poverty Index (MPI) for India, which includes extreme poverty but excludes nutrition and health deprivation, indicates that non-monetary poverty (deprivation in education and basic services) declined from 53.8% in 2005-06 to 16.4% in 2019-21, and further to 15.5% in 2022-23. NITI Aayog's estimates show a reduction from 29.17% in 2013-14 to 11.28% in 2022-23.

Narrowing Rural-Urban Poverty Gap in India:

Globe: Poverty often has distinct rural and urban characteristics, with rural areas typically showing higher rates.

India: India has successfully narrowed the gap between rural and urban poverty. Using the $2.15/day line, rural extreme poverty dropped from 18.4% to 2.8%, and urban poverty fell from 10.7% to 1.1% between 2011-12 and 2022-23. This is a significant narrowing of the rural-urban poverty gap from 7.7 to 1.7 percentage points, with an annual decline rate of 16%.

Challenges in Formal Employment and Gender Gaps (India specific):

Globe: While not always explicitly a global "major point" in every report summary, labour market dynamics and gender equality are persistent global challenges impacting poverty.

India: Despite overall positive employment trends and poverty reduction, challenges remain. Only about 23% of non-farm paid jobs in India are formal, indicating a large informal sector with limited social security. Furthermore, significant gender disparities persist in paid work. While the female employment rate is around 31%, there are 234 million more men in paid work than women. The World Economic Forum's Global Gender Gap Report 2025 ranked India 131st out of 148 countries, highlighting the persistent gender pay gap and the low share of women in senior management and political roles. These issues underline the need for targeted policies to promote formalization and gender equality to ensure truly inclusive prosperity.

The Path Forward: Lessons from India's Experience

The World Bank's report is a critical reminder that while the global fight against poverty faces significant headwinds, it is not an insurmountable task. India's journey offers valuable lessons: a combination of sustained economic growth, robust social protection, strategic investments in human capital, and targeted interventions can yield remarkable results.

However, the global community, including India, must double down on efforts to ensure growth is not just faster but also more inclusive, addressing inequalities, creating formal employment opportunities, and building resilience against the escalating threats of climate change. The ambition of eradicating extreme poverty by 2030 remains distant, but India's recent achievements offer a glimmer of hope and a blueprint for other nations grappling with similar challenges.

 

 

Future of Jobs: Insights from the World Economic Forum's 2025 Report

 Future of Jobs: Insights from the World Economic Forum's 2025 Report

The global labour market is on the cusp of a profound transformation, and the World Economic Forum's Future of Jobs Report 2025 offers a crucial roadmap for what lies ahead. Far from a narrative of widespread job loss, the report paints a dynamic picture of evolution, skill shifts, and the urgent need for adaptation. By 2030, we anticipate a net increase of 78 million jobs, with 170 million new roles emerging even as 92 million are displaced. This isn't just about jobs disappearing; it's about the fundamental reshaping of work itself.

Net Job Creation: Despite job displacement, the report forecasts a net increase of 78 million jobs by 2030, with 170 million new jobs created and 92 million displaced.

This point highlights a crucial nuance: while automation and other trends will eliminate certain jobs, the same forces, coupled with new industry growth, will create even more new opportunities. The "net" gain underscores that the future of work isn't just about job loss, but also about significant job evolution and creation. This positive outlook suggests a dynamic rather than a purely destructive labour market.

Technological Transformation: Broadening digital access is identified as the most transformative trend, with 60% of employers expecting it to transform their business by 2030.

This goes beyond just the adoption of specific technologies; it speaks to the fundamental shift towards a more digitally interconnected world. Increased access to the internet, digital tools, and platforms will reshape how businesses operate, interact with customers, and manage their workforces, making digital literacy a foundational requirement across all sectors.

AI and Automation as Key Drivers: AI and information processing technologies (like big data, VR, AR) are expected to drive business transformation for 86% of organizations. Automation will continue to displace administrative and clerical roles.

AI's pervasive influence is undeniable, from optimizing processes to enabling entirely new business models. This point emphasizes that AI, alongside big data analytics, virtual reality, and augmented reality, will profoundly alter how work is done. Consequently, jobs involving repetitive, predictable tasks, particularly in administrative and clerical functions, are most susceptible to automation.

Green Transition's Impact: The green transition is significantly reshaping job markets, with climate-change mitigation (47% of businesses) and adaptation (41%) driving demand for new roles.

The global imperative to address climate change is not just an environmental issue but a powerful economic and labour market driver. Businesses are increasingly focused on reducing their carbon footprint (mitigation) and preparing for the effects of climate change (adaptation), leading to a surge in demand for specialized "green" jobs and skills across various industries.

Emergence of Green Skills: Environmental stewardship and sustainability skills are becoming essential, reflecting the growing need for expertise in sustainability reporting, circular economy principles, and corporate ESG strategies.

This elaborates on the previous point by detailing the types of skills emerging within the green economy. It's not just about renewable energy engineers, but also professionals who can help companies navigate complex environmental regulations, implement sustainable practices (like circular economy models), and effectively report on their Environmental, Social, and Governance (ESG) performance.

Demand for Tech Roles: There's a surge in demand for roles like Data Analysts and Scientists, AI and Machine Learning Specialists, Software and Application Developers, and Cybersecurity Experts.

This specifies the high-growth tech professions that are at the forefront of the digital transformation. As businesses rely more on data, AI, software, and secure digital infrastructure, the demand for these specialized technical roles will continue to outpace supply, creating significant opportunities for individuals with these skill sets.

Growth in Frontline and Care Economy Jobs: While tech roles are growing, frontline jobs (e.g., farmworkers, delivery drivers, construction workers) and care economy jobs (e.g., nursing professionals, personal care aides, social work and counselling professionals) are also seeing significant growth in absolute numbers.

This crucial point counters the perception that all future jobs will be high-tech. It highlights the continued and even growing importance of essential, hands-on roles, particularly in sectors vital for societal well-being and basic needs. The aging global population, in particular, drives demand for care economy roles.

Decline of Clerical Roles: Clerical and secretarial roles, including cashiers, bank tellers, and data entry clerks, are among the fastest-declining jobs due to automation.

This provides concrete examples of the jobs most vulnerable to technological displacement. These roles typically involve routine, standardized tasks that are easily automated by software, robots, or AI, necessitating a significant shift in career paths for workers in these areas.

Skill Disruption: Approximately 39% of current core skills are expected to be outdated by 2030, emphasizing the urgent need for workforce transformation.

This is a stark reminder that even existing jobs will require significantly different skill sets in the near future. It underscores the concept of "skill shelf-life" shortening and the necessity for continuous learning and adaptation for nearly half of the global workforce.

Importance of Analytical Thinking: Analytical thinking remains the most sought-after skill by employers.

Despite the rise of AI, the ability to critically analyse information, solve complex problems, and make data-driven decisions remains paramount. This highlights that human cognitive abilities will continue to be invaluable, even as tools become more sophisticated.

Rising Demand for "Human" Skills: Skills like creative thinking, resilience, flexibility, agility, leadership, and social influence are increasingly important.

These are often referred to as "soft skills" or "human-centric skills." They are difficult to automate and are essential for collaboration, innovation, and navigating complex, unpredictable environments. The report emphasizes that these uniquely human attributes will become more valuable as routine tasks are automated.

Curiosity and Lifelong Learning: The ability to learn continuously and adapt to new challenges is crucial for workers.

Given the rapid pace of change and skill disruption, a mindset of continuous learning is no longer a bonus but a necessity. Workers who are curious, adaptable, and proactive in acquiring new knowledge and skills will be best positioned for future success.

Upskilling and Reskilling Imperative: 85% of employers plan to prioritize upskilling their workforce to address skill gaps and adapt to new technologies.

This demonstrates a strong commitment from employers to invest in their existing workforces. Upskilling (enhancing existing skills) and reskilling (learning entirely new skills for new roles) are recognized as critical strategies to future-proof their businesses and address the widening skill gaps.

Human-Machine Collaboration: The report emphasizes "human-machine collaboration" or "augmentation," where technology complements and enhances human work rather than solely displacing it.

This point shifts the narrative from "humans vs. machines" to "humans with machines." The future of work is envisioned as a partnership where AI and automation handle repetitive or data-intensive tasks, freeing up human workers to focus on higher-value activities requiring creativity, critical thinking, and interpersonal skills.

Impact of Demographic Shifts: Aging populations in higher-income economies drive demand for healthcare jobs, while expanding working-age populations in lower-income economies fuel growth in education-related professions.

Demographics play a significant role in shaping labour market demand. Older populations require more healthcare and personal care services, while younger, growing populations necessitate more educators and talent development professionals. These shifts influence where certain types of jobs will grow globally.

Geopolitical Fragmentation: Geopolitical tensions and trade restrictions are prompting business model transformations, leading to increased demand for cybersecurity and risk management roles.

Global instability and protectionist policies are forcing businesses to rethink their supply chains and operational strategies. This creates a need for specialists in areas like cybersecurity (to protect data and infrastructure from state-sponsored attacks) and risk management (to navigate complex international regulations and political uncertainties).

Skill Gaps as Major Barrier: Skill gaps are identified as the biggest barrier to business transformation by 63% of employers.

This highlights the urgency of addressing the mismatch between available skills and required skills. If businesses cannot find employees with the necessary competencies, their ability to adopt new technologies, implement new strategies, and remain competitive will be severely hampered.

Diversity, Equity, and Inclusion (DEI): Adoption of DEI initiatives remains on the rise, with 83% of companies implementing such programs, recognizing their potential to broaden talent availability.

Companies are increasingly understanding that fostering diverse, equitable, and inclusive workplaces is not just a moral imperative but a strategic business advantage. DEI initiatives help broaden the talent pool, foster innovation, and improve employee engagement and retention.

Economic Challenges: Rising cost of living and slower economic growth are expected to impact businesses and job creation, necessitating a focus on resilience and adaptability.

Beyond technological and social shifts, macroeconomic factors pose significant challenges. Inflation and slower economic expansion can constrain business investment and hiring, making it even more crucial for organizations and individuals to build resilience and adapt quickly to changing economic conditions.

Role of Public Policy and Education: Governments, businesses, and educational institutions need to collaborate to fund and provide reskilling and upskilling initiatives, support DEI efforts, and facilitate the green transition through targeted training programs.

This emphasizes that the future of jobs is a shared responsibility. No single entity can tackle the monumental task of workforce transformation alone. Concerted efforts across public and private sectors are essential to create effective training programs, foster inclusive growth, and prepare the workforce for the demands of the evolving economy, particularly in areas like the green transition.

 

To successfully navigate these complexities, collaboration is key. Governments, businesses, and educational institutions must work together to fund and provide robust reskilling and upskilling initiatives. Supporting Diversity, Equity, and Inclusion (DEI) efforts is also crucial; 83% of companies are implementing such programs, recognizing their potential to broaden talent availability and foster innovation. Ultimately, preparing the global workforce for the future of jobs is a shared responsibility that demands strategic foresight and concerted action.

 

World Investment Report 2025

 

World Investment Report 2025: A Landscape of Decline and Digital Surges

The World Investment Report 2025 provides a critical lens through which to understand the evolving landscape of global foreign direct investment. While the headline figures suggest a dire situation, a deeper dive reveals nuanced trends and pockets of resilience, particularly in the digital economy and in countries like India.

The Broader Global Investment Context: A Deepening Slowdown

The UNCTAD report's stark message of an 11% fall in global FDI in 2024 (excluding volatile financial conduit flows) underscores a systemic shift. This isn't merely a cyclical downturn but a pattern driven by a complex interplay of factors:

• Geopolitical Fragmentation: Rising trade barriers, increasing screening measures on foreign investment, and an intensifying competition in industrial policy are actively distorting investment flows. Multinational enterprises (MNEs) are increasingly prioritizing short-term risk management, leading to a structural shift towards domestic and near-shore investment strategies. This "de-globalization" or "slowbalization" directly impacts cross-border capital flows.
• Economic Volatility and Uncertainty: Persistent underperformance in global GDP growth, mounting public debt, and tight financial conditions contribute to an environment of elevated financial risk. This discourages long-term, productive investments, as investors become more cautious and seek safer havens. The report explicitly warns of a "sharply negative" outlook for 2025, with early data showing record-low deal and project activity.
• SDG Investment Crisis: Perhaps the most alarming finding is the significant decline in investment in sectors critical for achieving the Sustainable Development Goals (SDGs) in developing countries. Infrastructure, renewable energy, water and sanitation, and agrifood systems all saw drops of 25-33%. This directly undermines global efforts to address poverty, climate change, and other pressing development challenges, exacerbating existing funding gaps. The slump in International Project Finance (IPF), which fell over 40% between 2021-2024, disproportionately harms Least Developed Countries (LDCs) that rely heavily on such financing for large-scale development projects.

 

The Digital Paradox: Growth Amidst Decline

A fascinating paradox emerges from the report: while overall FDI is shrinking, investment in the digital economy is booming. This sector witnessed an impressive 107% growth, with semiconductors leading the charge at a 140% increase. Tech firms now command over 20% of revenues among the Top 100 MNEs, signifying a profound and accelerating digital pivot in global capital.

However, this digital growth is highly uneven. The report highlights that 80% of greenfield projects in digital sectors in the Global South went to just ten countries. This concentration risks deepening the digital divide, leaving many developing economies behind due to persistent infrastructure, regulatory, and skills gaps. It underscores the urgent need for policies and coordinated action to bridge this disparity and ensure that the benefits of digital transformation are widely shared.

Details

Global FDI Decline by 11% to $1.5 Trillion: This figure is the bedrock of the report's grim assessment. An 11% drop in global FDI, reaching $1.5 trillion, signifies a significant withdrawal of capital from cross-border productive assets. This translates to fewer new factories, less expansion of existing businesses across borders, and a generally cautious approach by multinational enterprises (MNEs). The impact is felt in job creation, technology transfer, and overall economic growth potential worldwide.

Misleading 4% Headline Increase: The initial announcement of a 4% rise to $1.5 trillion is deceptive. This "increase" is almost entirely due to "volatile financial conduit flows" through a few European economies. These flows are often not genuine investments in productive capacity but rather intra-company financial operations or temporary parking of funds. Stripping these out reveals the true, and more concerning, 11% decline in real FDI. This highlights the need for careful data interpretation to understand actual economic trends.

Negative Outlook for 2025: UNCTAD explicitly warns that the outlook for global investment in 2025 has turned "negative." This is not a mere projection but a conclusion drawn from current trends and the confluence of persistent geopolitical tensions, economic headwinds, and sharp downward revisions across key indicators. It implies that the challenges of 2024 are likely to persist, making a quick rebound unlikely.

Record-Low Deal and Project Activity in Early 2025: This statistic provides a real-time snapshot of investor sentiment. The fact that early 2025 data shows "record-low deal and project activity" means that companies are currently initiating fewer new cross-border ventures, including setting up new facilities or undertaking significant expansions. This points to a continued lack of confidence and a wait-and-see approach among investors.

Developed Economies Hit Hardest (22% Drop): The decline in FDI is not uniformly distributed. Developed economies experienced a substantial 22% drop. This suggests that capital is becoming more domestically focused or shifting towards perceived safer or higher-growth emerging markets. It also highlights the impact of de-globalization and protectionist policies in these advanced economies.

Europe's Plunge (58% Decline): Europe's massive 58% plunge in FDI inflows is a significant concern. This can be attributed to factors such as the ongoing war in Ukraine, energy crises, regulatory complexities, and potentially the impact of conduit flows being removed from the real investment calculations. It reflects a challenging environment for attracting and retaining foreign capital in a historically strong region for FDI.

North America's Counter-Trend (23% Increase): North America, particularly the United States, stands out as an exception with a 23% increase in FDI. This is a testament to factors like its large domestic market, robust innovation ecosystem, and deliberate industrial policies aimed at attracting investment in strategic sectors.

US Remains Top FDI Destination ($279 Billion): The United States maintained its position as the top FDI destination globally, attracting $279 billion. This dominance is largely propelled by specific initiatives, especially in the semiconductor sector , showcasing the power of targeted incentives and a stable regulatory environment.

Developing Economies Appear Stable but Conceal Crisis: While the headline for developing economies shows a marginal 0.2% rise, the report emphasizes that this "concealed a deeper crisis." This means that while some developing countries are attracting investment, many others are being left behind, or the investment is not going into the sectors most needed for long-term development.

SDG-Related Investment Decline (25-33%): This is one of the most alarming findings. A drop of 25-33% in investment for SDGs (e.g., infrastructure, renewable energy, water, agrifood) in developing countries means that the world is moving further away from achieving critical development targets. This directly impacts poverty reduction, climate change mitigation, and access to basic services.

Health Sector as a Sole Growth Area (+25%): The health sector was the only SDG-related area to see growth, with a 25% increase. This could be a lingering effect of the pandemic, highlighting increased focus on healthcare resilience. However, its small base means it cannot compensate for the widespread declines in other vital development sectors.

International Project Finance (IPF) Slump (26% Drop): IPF, crucial for funding large-scale infrastructure projects like power plants, roads, and ports, dropped by 26% in 2024, continuing a multi-year slump of over 40% since 2021. This directly hinders the ability of developing countries to build the necessary physical infrastructure for economic growth and human development.

LDCs Disproportionately Affected by IPF Decline: Least Developed Countries (LDCs) are particularly vulnerable to the IPF slump, with their share of deals falling 41% and value declining by 74%. This is because LDCs often lack sufficient domestic capital and rely heavily on international project finance for their development needs. The decline widens the gap between them and more developed nations.

Digital Economy as the Only Growth Sector (107%): The digital economy stands as a singular bright spot, experiencing a phenomenal 107% growth in FDI. This underscores the global pivot towards digital transformation, driven by advancements in AI, cloud computing, and digital services. It's the primary engine of investment activity in an otherwise stagnant landscape.

Semiconductor Industry Boom (140% Growth): Within the digital sector, the semiconductor industry saw an extraordinary 140% increase. This surge is fuelled by geopolitical competition for technological leadership, government incentives (like the US CHIPS Act), and the foundational role of semiconductors in virtually all modern technologies.

Concentration of Digital Investment (80% to 10 Countries): While the digital economy is booming, its benefits are highly concentrated. 80% of greenfield digital projects in the Global South went to just ten countries. This highlights a significant digital divide, where many developing nations lack the necessary infrastructure, skilled workforce, and regulatory frameworks to attract such high-value investments.

Tech Firms' Growing Revenue Share (Over 20%): The fact that tech firms now account for over 20% of revenues among the Top 100 MNEs indicates the increasing economic power and influence of the technology sector. This shift also means that a larger proportion of global investment is being directed towards tech-related ventures.

 

India's Resilience and Strategic Positioning

India stands out as a beacon of resilience in this challenging global investment climate. While global FDI plummeted, India maintained stable inflows of $28 billion in 2024, the same level as 2023. This stability allowed India to move up to the 15th position globally among top FDI destinations, reflecting a strong vote of confidence from international investors.

Several factors underpin India's continued attractiveness:

• Robust Domestic Demand: India's large and growing domestic market provides a strong incentive for foreign companies, offering a stable consumer base even amidst global economic uncertainties.
• Ongoing Economic Reforms: The government's consistent push for economic reforms, including initiatives like 'Make in India' and Production Linked Incentives (PLI), has created a more favourable business environment and attracted investments in manufacturing and other strategic sectors.
• Strategic Focus on Key Sectors: India's deliberate efforts to promote sectors like semiconductors, electric vehicle components, and digital infrastructure have yielded results. The country has emerged as a top destination for capital expenditures in new projects in developing Asia, showcasing its potential as a manufacturing and innovation hub.
• Greenfield Project Leadership: India's ranking among the top five global hubs for greenfield project announcements (with 1,080 new projects in 2024) is a critical indicator of long-term investment. These are new investments that create jobs and build productive capacity, signalling sustained investor confidence. The surge in projected capital expenditure for these projects, reaching $110 billion and nearly a third of all Asian greenfield investment, is particularly noteworthy.
• Digital Economy Prowess: India's significant role in greenfield digital services investment within the Global South, attracting $54 billion between 2020-2024, highlights its burgeoning digital economy. This is fuelled by a large pool of skilled talent, a rapidly expanding digital infrastructure, and a robust startup ecosystem. India's digital economy is projected to contribute nearly one-fifth of its national income by 2029-30, outpacing traditional sectors. This makes it a prime destination for investments in AI, cloud computing, data centres, and digital platforms.
• International Project Finance: While India slipped slightly in IPF deals, it still managed to secure 97 projects, placing it among the top five economies in this vital financing category. This indicates its continued ability to attract funding for large-scale infrastructure and development projects.

DETAILS

India's Stable FDI Inflows ($28 Billion): Amidst a global decline, India's ability to maintain stable FDI inflows at $28 billion in 2024 (similar to $28.1 billion in 2023) is a significant positive. It suggests the country's domestic growth story and ongoing reforms are providing a strong counter-cyclical force. While some sources might cite slightly different figures (e.g., DPIIT vs. UNCTAD's calendar year methodology), the overall stability in a volatile global environment is notable.

India's Improved Global Ranking (15th): India's ascent to the 15th position globally in FDI destinations (from 16th) despite stable inflows demonstrates that other major economies experienced more significant declines. This relative strength improves India's standing as an attractive investment destination on the world stage.

India's Greenfield Project Leadership ($110 Billion): India's robust performance in greenfield projects is a particularly strong indicator. With projected capital expenditures of $110 billion, it's the top FDI recipient in developing Asia in this category and ranks fourth globally with 1,080 new projects. Greenfield investments represent new, tangible assets and job creation, showing a strong commitment from investors to India's long-term growth story, particularly in sectors like semiconductors and basic metals. This also includes significant greenfield digital services investment of $54 billion between 2020-2024 in the Global South, where India leads.

In conclusion, the World Investment Report 2025 serves as a stark reminder of the global challenges facing FDI. However, it also highlights the critical importance of a strategic, responsive approach to investment. For countries like India, which have prioritized domestic reforms, fostered a vibrant digital ecosystem, and maintained a strong focus on greenfield projects, opportunities continue to emerge even amidst widespread decline. The report’s call for coordinated action and modernized investment governance is crucial for redirecting global capital towards a more inclusive and sustainable future.