India is amongst the bright spots in the world economy today, with the highest growth amongst all large economies. Yet, the pace of growth in jobs is nowhere near the overall economic growth. And this trend of jobless growth seems to linger. One of the obvious reasons is the rapid rise in the use of technology and machines, which have increased efficiency and lowered the reliance on manual work. So most of the organisations that have been reeling under the legacy issues of lower productivity have started going lean and are reducing the non-productive job roles with the help of technology. With emerging global trends like automation, robotics, artificial intelligence, such impact on jobs is likely to continue across all sectors, including IT and ITeS, which had been one of the significant job creating sectors over the last decade.
My email’s inbox has off-late seen a spike in job applications, not only from fresh graduates but also from experienced candidates. This could very well be attributed to increased digital penetration and rise of social media. However, one cannot discount the fact that so many people are desperately looking for jobs, either for want of better opportunities or probably due to loss of existing job(s). The latest unemployment statistics by the Labour Bureau, that show a significant rise in unemployment, also point towards the gravity of this issue.
The near-stagnation in job market has started affecting enrolments in higher education as well. Over the last two-three years, several engineering and management colleges (excluding the premier colleges like IITs) have recorded a steady decline in student admissions. For most students, the investment in education depends on job surety. With no/ limited guarantee of jobs post completion of course, the interest in engineering or management admissions has also started waning. This again is a matter of concern.
Most of the organisations that have been reeling under the legacy issues of lower productivity have started going lean
Therefore, on one hand we need to have enough work opportunities for the 12-13 million entering the workforce each year, on the other hand we need to provide employment avenues to the many who may have lost their jobs because of downsizing or skill redundancy.
In the case of new entrants, the policymakers as well as industry need to start envisaging the future requirements and accordingly plan towards creating adequate work opportunities. As workforce moves from agriculture to other sectors, government and industry should jointly work on assessing future job scenarios. What are the skills that industry will need in the future? What are the services that the society needs? Where will be the maximum demand for people? How can they be prepared for it? How to attract youth to new and emerging jobs? These are some of the questions that require detailed studies and long term projections.
This article is a part of FICCI publication “Economy of Jobs” that was released during our 89th AGM in December 2016. It presents essays from India’s
leading business leaders and eminent thought leaders who share views and suggestions on job creation. The articles cover varied issues: demographics, education, skill development, entrepreneurship, impact of technology, labour laws, and as well as specific issues across sectors.
More articles from this series can be viewed here at: Economy of Jobs
The rise and growth of new industries and businesses should be anticipated and manpower accordingly trained. For instance, if education goes online then teachers need to be well-equipped for the change. Technology and employment are not necessarily antithetical. The nature of jobs is continuously evolving. While some types of jobs may become redundant due to the advent of new technology, some new type of jobs will surface riding the same change. This change may seem disruptive at present, but will probably lead to far more number of opportunities and better earnings prospects.
We have to be prepared for the unknown and the unexpected, given the rapidly changing ecosystems
There is a global shift occurring that is taking the focus away from employment to work; from jobs to livelihoods. It is important to understand that the decades old employment framework will be less relevant in the future. Flexible work force and virtual offices will drive the change for both white collar and blue collar workers. We have to be prepared for the unknown and the unexpected, given the rapidly changing ecosystems.
There is also the need to accelerate the process of labour reforms, which will provide flexibility and encourage industries to employ more workers. The government needs to lay special emphasis on labour intensive industries that have a huge potential to create large scale employment. The bottlenecks in the growth of such industries need to be addressed and greater support should be provided to these sectors to enable creation of more and more jobs.
Most importantly, we also need to realise that closing the gap between demand for work and availability of jobs cannot be relied solely upon through the present framework of the organized sector. There is a need to create more and more entrepreneurs who can help expand the job opportunities exponentially. Government can be an enabler in this process and help expand the entrepreneurship culture across rural and urban India. There is no doubt that some commendable initiatives have been taken by the government recently, including Start-up India, Skill India, Digital India, etc. We seem to be moving in the right direction, but the challenge is so daunting that our efforts need a force multiplier.
Innovation based self-employment needs to be encouraged. World over, as society becomes more affluent, people aspire to move towards lifestyle oriented products. Hence, there is a lot of potential in the creative space, for instance, in industries such as handicrafts, arts, design, etc.
In case of those who have lost jobs, one of the ways to assist is to re-train them for new jobs. Reskilling of experienced people needs an industry wide effort. Second is to help them become self-employed. The solution to lack of employment is not going to emerge through the organised sector alone. Creative thinking while compensating an individual at the time of lay off can go a long way and prove beneficial to both the company and the individual. For instance, when laying off experienced people, companies can extend soft loans for them to become entrepreneurs. This will help deepen the entrepreneurial culture.
The aspirations and reality are often conflicting but a holistic understanding of issues, proper planning for future and collective efforts in implementation can help us tide over the challenge at hand. I hope we will be able to achieve this with collective efforts of government, industry and individuals.
Mr Harshvardhan Neotia, Past President, FICCI writes this piece for our publication “Economy of Jobs”
