By | Ramesh Ranjan | Founder & Editor – https://humanengineers.com
Over the last three years the Indian Economy has seen incredible economic growth and macroeconomic expansion. The GDP is steadily growing despite Global slowdown & demonetization. Foreign direct investment has increased, inflation levels have stabilised and the rupee has strengthened.
One major indicator, however nullifies the theory of “India Shining” and threatens to paint a shadow of Gloom over the country. If we carefully observe some of the key patterns in our employment data, we see the Indian economy perpetuating itself into a long-term phase of joblessness.
The prospect of a jobless growth economy has ramifications for everyone. An economy that is experiencing growth without an expansion of jobs challenges employers, investors, employees, and the society at large to adapt to the new economic order. When growth is coupled with high unemployment, it means that the economy is experiencing structural changes. This structural shift offers opportunities to some and difficult choices for others.
It is estimated that India’s labour market has over 470 million people. However India faces the challenge of creating jobs for a predominantly young population. According to credit rating firm Crisil, around 18 million people enter the workforce every year. The number of jobs created is far lower; between 2011-12 and 2015-16, India created 3.65 million jobs a year, according to industry lobby group Confederation of Indian Industry (CII).
However, all of this is in the realm of faith and belief, with little data to back up various claims. We don’t have a fool proof system of capturing this rather important data/ statistics. The government has tasked NITI Aayog Arvind Panagariya to generate timely and reliable employment data to fulfill the key priority of job creation. The lack of sufficient and timely information has often led to ill-informed and politicized debates both within the Government and the Industry Trade bodies like CII, Nasscom, FICCI etc.
Currently, data on jobs is generated with a time lag and in some instances—as in the case of the Labour Bureau—restricted to the organized sector. Data on jobs in the informal sector, which employs around 90% of the country’s workforce, is not easily available and, when available, is sparse. The most comprehensive database is that generated by the National Sample Survey Office (NSSO), but that comes with a lag. Everyone will agree that, better data will shed light on the actual size of the informal economy.
While service sector-led growth contributed greatly to soaring GDP levels, it still employs less than 30% of the total Indian population. India is still seen largely as an Agrarian Economy – the source of most employment for Indian people still lies in the agriculture sector, which employs almost 45% of the Indian population (with a 15% contribution to GDP).
Labour-intensive manufacturing base has not quite been the engine of growth for India, as it has been in China.
IT and the BPO sectors alone employ about 4 million people today and the industry’s own estimate is upto 60% of this workforce will not be of any use with their present skill levels.
Says Nasscom president R. Chandrashekhar, “A large part of the workforce will have to undergo retraining. Even after that there is no certainty of their absorption. Automation is impacting existing employment not only in IT and BPO but in a host of other manufacturing sectors like automobiles, engineering etc. We are conducting a joint study with FICCI on this.”
Vishal Sikka, CEO of Infosys, was more blunt when he hinted that more than half the current work force in the IT/ BPO sector may become redundant in a few years.
The situation is quite grim and there is a sense of denial amongst Politicians, Industry Leaders, Trade Bodies and the HR Community. Nobody is willing to talk it out openly and are either discussing in hush-hush tones or brushing it under the carpet.
There appears a persistent lack of willingness of the Indian state to demonstrate timely introduction of labor reforms to increase wage incentives; create a conducive investment climate, encourage Manufacturing, create incentives for employers to hire more people across sectors; and with review existing impact of acts such as the Industrial Disputes Act (which, as per a World Bank study lowered employment in organised manufacturing by 25%), add to the joblessness misery.
Existing government programs (including new programs like Skill India, Start-Up India, Make in India) may have marginally added few jobs to the overall demand-supply gap in selected organised sectors of employment, but none of them structurally address problems of prolonging joblessness within rural and urban areas.
The Future of Work – Redefined
Adding to the misery of Jobless Growth is that the Future of Work itself is being Redefined and constantly. Automation, Robotics, 3D Printing, Artificial Intelligence, Machine Learning, Speech Recognition and a host of others are challenging the Employers as well as the Employees.
According to a McKinsey analysis of 2,000 different work activities across 800 occupations, automation will change virtually every job across all occupations. Specifically, McKinsey found that in about 60% of occupations, 30% of tasks could be handed over to robots and bots.
“More occupations will change,” the report concludes, “than will be automated away.”
Two-thirds of Americans believe that, in 50 years, robots and computers will do much of the work humans now do. The World Economic Forum’s 2016 report, The Future of Jobs, estimates that 5 million jobs will be lost to automation by 2020 and that the number will keep growing. Jobs that once seemed like “safe bets”–office workers and administrative personnel, manufacturing, and even law—will be hit hardest, the report estimates.
Every one must prepare for the future of work rather than just train for today’s jobs.
Jobs at the lower end of the value chain, which are repetitive, transactional and tactical will most likely be at risk. Hence jobs like Telemarketing, Back end processing, Testing, Assembling, Drivers, Construction, Teaching, Recruitment etc. would run the risk of automation and likely disruption in the job market.
- Front-line Military Personnel Will Be Replaced With Robots
- Private Bankers and Wealth Managers Will Be Replaced With Algorithms:
- Lawyers, Accountants, Actuaries, and Consulting Engineers Will Be Replaced With Artificial Intelligence:
- Virtual Assistants will replace Secretaries & Clerks
Jobs moving up the value chain will continue to stay but will be continuously challenged and require to constantly move up the value chain.
Newer Jobs & Skills will be created and in demand :
Life Planner, Digital Telepathy, Robotic Psychological Trainer, Smart Home Installers, Virtual Reality, 3D Printing Designers, Virtual Healthcare Relationship, Urban Farmers , Freelance Digital Professors, Professional Tribers, Microchip Human implants
“At TomorrowToday, we’re predicting that nearly 25% of today’s full-time employees will be working ‘on demand,’” says Codrington, referring to the increasing preference of companies to hire freelancers for short contracts when the need arises instead of keeping people on staff.
The Bottom Line
A jobless growth economy indicates changes to the fundamental basis of work for everyone. Some employees will do well, as they have the necessary skills and capabilities that the new generation organisations require. Others face long-term unemployment or underemployment, and will be unable to find work until they obtain or upgrade to new skills.
It will require the Government, the Industry Leaders, the Industry Trade Bodies like CII, Nasscom, FICCI, Asocham etc, Academia, the HR Leaders, the Employees and the Society at large to aggressively confront this devouring monster head on and act with alacrity before its too late. It is every one’s responsibility and cant be left to the Government alone to handle this complex and dynamically changing situation.
Will India rise to the occasion as it did when the Personal Computer and Information Technology disrupted the world in the 80’s and threatened joblessness or will we miss the bus and lead to a path of despair & joblessness – only time will tell………….