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Comparing Economic
Indicators – India and UK
Seminar Task 2

Student Name]
11/25/2018
Table of contents:
Introduction:.................................................................................................................................................. 2
The Data on three indicators: A comparison ................................................................................................ 2
GDP per capita, PPP (constant 2011 international $) ................................................................................... 3
Internet Usage and a country’s development: ............................................................................................... 6
Population aged 65 and above (% of total) ................................................................................................... 8
Summary: What do these trends in data tell you for international business? ............................................... 9
Conclusion: ................................................................................................................................................. 10
References: ................................................................................................................................................. 11
Introduction:

In this task, we are going to compare the three indicators of GDP per capita PPP, internet usage

and population aged 65 and above as a percentage of total population for the two countries –

India and United Kingdom (UK) for the years 2002 till 2017. We can see that UK is a most

advanced country when compared to India which is still a developing or an emerging country.

These comparisons between the two countries help in laying out the differences for the

international business organizations on where they can expand to given the situation in both

countries.

The Data on three indicators: A comparison

The data on GDP per capita PPP (constant international $), internet users as a percentage of total

population and population above 65 years of age (as a percentage) is collected from the world

bank website and is presented in tabular column below.

GDP per capita Population % above

PPP Internet Users (%) 65

Country United United United

Name India Kingdom India Kingdom India Kingdom

2002 2623.33 34669.52 1.54 56.48 4.56 15.96

2003 2783.00 35656.18 1.69 64.82 4.64 15.99

2004 2955.20 36292.18 1.98 65.61 4.71 16.02

2005 3178.83 37159.80 2.39 70.00 4.77 16.05

2006 3419.93 37793.62 2.81 68.82 4.85 16.12

2007 3698.78 38384.25 3.95 75.09 4.92 16.19

2008 3786.63 37903.38 4.38 78.39 4.98 16.27

2009 4049.81 36042.42 5.12 83.56 5.05 16.40

2010 4404.70 36366.98 7.50 85.00 5.11 16.60

2011 4635.88 36607.98 10.07 85.38 5.21 16.86

2012 4827.56 36892.85 12.58 87.48 5.30 17.18

2013 5073.61 37398.80 15.10 89.84 5.39 17.53

2014 5385.14 38251.79 21.00 91.61 5.50 17.86

2015 5756.66 38839.17 26.00 92.00 5.64 18.12

2016 6095.72 39309.33 29.55 94.78 5.81 18.35

2017 6426.67 39753.24 5.99 18.52

Source: (WorldBank, 2018)

GDP per capita, PPP (constant 2011 international $)

GDP per capita is average income a person earns in a country. For example if every individual

in a country earns thousand Dollars per year then the GDP per capita of the country will be

approximately 1000 dollars. GDP per capita as an indicator is very significant because it is a

primary indicator of whether the country is poor or not(Kopf, 2018). This is important because if

the average income of the country’s population is higher, it would lead to population being

healthy, educating the children better, and the basic requirements of the people would be met.

Hence GDP per capita become the fundamental indicator of the prosperity of the country.

When compared with United Kingdom, India's GDP per capita is very low and this can be

attributed to various reasons as summarized below:

  India is not a developed country and still developing from being a factor driven

country to an industrialized country. During the 18th and 19th centuries, India was

mostly agrarian in nature and even though it has seen industrial revolution after its

independence, it has been using outdated technology productive activities till recently.

the production Technology is a mostly labor intensive in nature.

 Similarly the Indian education system was demolished during the earlier centuries and the

literacy rates plummeted before independence and it is not recover fast enough when

compared to UK.

 Infrastructure facilities required for growth and development in India are not fully

developed like in the case of United Kingdom and hence the GDP per capita is lower than

that of United Kingdom as shown in the graph below.

GDP of a country includes the total value of final goods and services produced within the

borders of the country during the specific period mostly annually and it is a widely used measure

of the economic activity of a country(Investopedia, 2018). GDP per capita on the other hand is a

Better Indicator of the trend in the country’s living standards as it adjusts for the population

differences over time and between countries. GDP per capita can be taken as an informal

measure for denoting the Nation's prosperity however the ranks of the advanced nations are

generally dominated by the countries with relatively small populations and disproportionately

large economies. PPP generally refers to the purchasing power parity exchange rates and this

theory essentially states that in the long term, currency exchange rates would generally converge
towards the rate that equalizes the price of identical basket of goods and services between any

two countries.

however a nation having a consistent economic growth can still be far behind in the measure of

per capita GDP if its population is growing faster than the rate of growth in GDP. In the

comparison between India and United Kingdom, India’s growth rate in population is very much

higher than it is for UK and hence per capita GDP is a major issue for countries like India where

rapidly increasing population has resulted in declining living standards as represented by the per

capita GDP Trend. This can be seen from the bar chart of per capita GDP which makes a

comparison between per capita GDP of India and that of UK and we can see that the per capita

GDP for UK is far more than that of India.

GDP per capita, PPP (constant 2011

international $)
45000
40000
35000
30000
25000
India
20000
15000 United Kingdom
10000
5000
0
2006

2013
2002
2003
2004
2005

2007
2008
2009
2010
2011
2012

2014
2015
2016
2017

We can see from the above chart, that the percapita GDP for India is just reaching $6000 in the

year 2017 while that of UK has been above 35000 in almost all the years and is reaching nearly
$40000 in the year 2017. This shows how advanced United Kingdom is than India which is still

an emerging economy.

Internet Usage and a country’s development:

The internet usage and the use of technological services like mobile phones have become a

important measure for the economic development of the country. This is mainly because internet

has been changing the way in which companies work, individuals socialize and create

information and share this information with others and it also helps in organizing the flow of

people things and ideas across countries(Salahuddin & Gow, 2016). In the developed and most

advanced countries internet accounted for 21% of the GDP growth over the last 5 years. During

the same period those who are accessing Facebook meant by million users that includes leading

firms who regularly share content and update their pages. Social media marketing has been the

trend of various Global companies across the countries. Large Enterprises and multinational

corporations have reaped major benefits from the internet revolution and this as an empowering

influence on many small businesses also. Technological innovations and efficiency enhancers

like the payment platforms emerging and the ability to connect people across the world and

engage them intensely through the internet is expanding exponentially. The governments of

various Nations, the businesses and the policy makers are beginning to recognize the enormous

opportunities that the internet Revolution can create even though it has some major risks of

privacy and security over the internet. E-Commerce has been the trend over the last two decades

and it is the strong contributor to the GDP growth of nations. When comparing India and UK

percentage of population who are using internet, we can see that only 30% of the population in

India is using internet while more than 90% of the population in UK are using internet. This

major difference exhibits the fact that India still has to go a long way in internet usage which can
contribute significantly to the GDP growth rate of a country and also revolutionize the

globalisation process in the country.

Individuals Using The Internet

100
(% Of Population)

90
80
70
60
50 India
40
United Kingdom
30
20
10
0
2007

2014
2002
2003
2004
2005
2006

2008
2009
2010
2011
2012
2013

2015
2016

With the internet revolution, traditional activities are rejuvenated and it has enabled fundamental

transformations in the ways in which businesses are conductor in virtually all types of

Companies and not only those who have become online. With the internet Revolution there are

shifts which include wholesale changes in the ways in which the products are bought and sold

and also in the ways in which they are designed, and produced and even marketed. The various

ERP systems that businesses use involve internet Technologies and ecosystem and this impacts

the supply chain and help organizations operate with a global workforce.

physical assets have become part of the information system as the ability to

capture, communicate, compute and collaborate with information around has enabled the

internet of things become a powerful and transformative tool for development of businesses and

economies around the world.

Internet ecosystem has enabled various advantages like fostering competition, encouraging

innovation, developing human capital and also building out comprehensive internet
infrastructure that enables the economy to capture the maximum utility from this technological

transformation. It has been empirically proven that countries with higher internet contribution

to GDP have an high correlation to those economies with stronger internet supply ecosystem

(Manyika & Roxburgh, 2011). This is shown by the graph below

Population aged 65 and above (% of total)

Population aged 65 and above represent dependent population who do not contribute

significantly to the GDP growth of a country. many developed countries are having a high

population rate in this age group 65 and above and this is due to the longevity, decrease in

mortality rate, decrease in fertility rate and a decline in population growth which has been visible

from 1970s when the adult population which was working outpaced the child population growth

(Nagarajan, Teixeira, & Silva, 2013). This was mainly due to the fact that in many of the

advanced nations women began actively participating in the workforce as a result of which the
fertility rate declined in these countries. (Maestas, Mullen, & Powell, 2016) Comparing India

and UK main can see that the aged population above 65 years represents a smaller percentage in

India at 5.99 during the year 2017; while in UK the percentage of population in this dependent

age group of above 65 is at 18.52%. Bar chart below represents the percentage of population in

the age group above 65 as a percentage of total population.

Population aged 65 and above

20
(% of total)

15

10
India
5
United Kingdom

Years

Summary: What do these trends in data tell you for international business?

For international business organization GDP per capita of a country represents a significant

indicator for the purchasing power of the country as the people of the nation would purchase

more with their per capita GDP is at a higher rate. in this regard UK has a higher GDP per capita

than that of India and hence UK may represent prospective market for international business.

how were when compared in the population base which is the potential market size for any

business India ranks significantly more as it is the second largest populated country in the

world. When comparing the internet usage for both the countries, UK ranks significantly well as

nearly 94% of its population of using internet when compared with 30% of the population using

internet in India. For global businesses without transforming they are channels of distribution
through online digitalization, UK fares significantly well in comparison with India. however in

the case of ageing population, where the dependent population of age category 65 and above is

larger in UK than in India which represents that more of the population in India is of the working

age group category which can significantly contributed to the GDP growth rate. Hence

considering international business, a country with the higher working age population is India

when compared to UK. Hence considering the market size and the working age population India

ranks significantly well and are an emerging economy that can also improve upon its internet

usage facilities.

Conclusion:

The 3 indicators of economic activity which was compared in the above analysis includes the

GDP per capita PPP, internet usage as a percentage of population and the population aged 65

and above as a percentage of total population. We can say that the relationship between internet

usage and GDP growth rate is positive from the above analysis and the relationship between the

population aged 65 and above and the GDP growth rate is negatively related.

This is mainly because internet facilities that are growing in the emerging Nations like India

having helping out Global businesses to both outsource productive activities in India and also

help in distribution and marketing through the internet in India which has a largest market

size. India has the most important asset of human capital (though they are unskilled and Semi-

skilled) and the largest percentage of population is in the working age population which is a

significantly contributing factor for international businesses. However with the largest

population in the world, GDP per capita is significantly lower than that of Advanced Nations like

UK.
References:
Investopedia. (2018). Per Capita GDP Definition | Investopedia. Retrieved November 25, 2018,

from https://www.investopedia.com/terms/p/per-capita-gdp.asp

Kopf, D. (2018). GDP per capita is far more important that GDP for measuring economic

development — Quartz. Retrieved November 25, 2018, from https://qz.com/1194634/the-

world-bank-wont-stop-reporting-gdp-instead-of-gdp-per-capita-and-it-is-driving-me-crazy/

Maestas, N., Mullen, K. J., & Powell, D. (2016). The Effect of Population Aging on Economic

Growth, the Labor Force and Productivity. Retrieved from www.rand.org/giving/contribute

Manyika, J., & Roxburgh, C. (2011). The great transformer: The impact of the Internet on

economic growth and prosperity. Retrieved from

https://www.mckinsey.com/~/media/McKinsey/Industries/High Tech/Our Insights/The

great transformer/MGI_Impact_of_Internet_on_economic_growth.ashx

Nagarajan, R., Teixeira, A. A. C., & Silva, S. (2013). The Impact of an Ageing Population on

Economic Growth: An Exploratory Review of the Main Mechanisms. Retrieved from

https://www.fep.up.pt/investigacao/workingpapers/wp504.pdf

Salahuddin, M., & Gow, J. (2016). The effects of Internet usage, financial development and trade

openness on economic growth in South Africa: A time series analysis. Telematics and

Informatics, 33(4), 1141–1154. https://doi.org/10.1016/J.TELE.2015.11.006

WorldBank. (2018). World Development Indicators (WDI) | Data Catalog. Retrieved November

25, 2018, from https://datacatalog.worldbank.org/dataset/world-development-indicators