India’s employment scenario has experienced a pendulum-like shift, from an agricultural towards a service-rich economy, corroborated with a boom in employment for sectors like IT, insurance, finance, infrastructure, retail and telecom.
With services contributing to 66.1% gross value-added growth in FY15-16 based on data from an India Brand Equity Foundation report, it’s clear that burgeoning progress is firmly entrenched in the waves of the services sector. In fact, the technology sector alone is expected to generate revenues exceeding $160 billion in FY16, growing 9.2% from FY15.
Shifting focus from labour
Employment in India has been deep-rooted in a relatively-educated, English-speaking workforce at a discount, through a robust outsourcing model that has witnessed echelons of success. While other BRIC nations have exploited the availability of commodities to generate currency, India remains a net importer of raw materials, with its principle ‘export’ remaining a low-cost skilled workforce—most of it engaged in round-the-clock support.
But with other lower-cost markets like the Philippines, China, Bangladesh and Africa threatening to capture a bigger slice of India’s revenue pie, along with introduction of automation at the helm of several industries, is this current workforce skill sustainable? If not, what solutions can be garnered to make India’s youth employable for the long haul?
The trailblazing effect of rapid technology adoption is substantiated through a Korn Ferry survey predicting that 44% global business leaders believe that people will be replaced by automation in the future. The espousal of technology brought forth by the Fourth Industrial Revolution denotes that the scale of transformation is poised to be more explosive than ever before, with the merging of a myriad of new technologies at the helm of a dynamic world today. Experts credit the limitless scale of #Industry4.0 with the capability to disrupt every sector in the world.
Technologies like quantum computing, data processing and robotics have replaced the need for human intervention in a myriad of industries. This has triggered a conundrum for sectors like retail, IT, insurance, banking and telecom, where previously promising employment opportunities are now being replaced with automated technology.
Many experts are steeped in the belief that this could trigger great inequality. Labour substitution displaces the workforce, which exacerbates the disparities of economic empowerment. Unless measures are taken, India will witness a huge upsurge in educated unemployed youth.
Upgrading the incumbent
Technological advancement has sparked a change in the way labour is demanded across industries. Labour-intensive workloads are paving the way for automated technologies, so a need for new skills is emerging as the cornerstone for success. With data from the National Sample Survey Office and the Census 2011 revealing that nearly 105 million fresh entrants are expected to enter the market, a treasure of burgeoning talent under the age of 25 exists in the country—waiting to be nurtured to meet the long-term demands of industries over the next few decades. Apart from training fresh entrants, India needs to upgrade the skills of the prevailing workforce, empowering them with the training necessary to remain relevant in a technology-driven world.
India’s employed workforce is only likely to bear fruit if capital is invested in skilling the workforce. One of the foremost priorities of the government, through Skill India, is to impart skills to 40 crore people by 2022, with over 73 development programmes focused on multiple sectors, emphasising training and job placement. The mission is to correct derelict deficiencies and equip youth with the right opportunities by generating a productive workforce capable of meeting the demands of a myriad of global and local industries. While this is an excellent step, is it enough to meet the accelerating growth of the Indian economy? Can businesses afford to simply leverage cost any more? Perhaps not. They must find a way to derive a distinct value-add well beyond price.
Interpersonal, technical and critical thinking skills have not been kindled for youth to ingest. To combat this dearth of crucial skills, the country needs to take up the baton by empowering the youth with the right knowledge and vocational skills.
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Both the public and private sector need to integrate in their quest to empower the youth with specialised training to make them employable, and to ensure that demand and supply are evenly met in subsequent years. Skill India and Make-in-India are aimed to encourage creative thinking, entrepreneurship and upgraded skills. Highly-skilled training to tackle the proliferation of technology would likely spawn a new-age workforce with skills like computing power, technical capability, word processing, BYOD expertise and much more.
While the services economy has taken precedence, agriculture and agri-based businesses must not be overlooked, as they will continue to forge the story for rural India. Nearly 70% of India’s rural community depends on agriculture for livelihood, triggering an incredible opportunity to empower rural youth with these new, high-quality skills for producing a sustainable shift in the way these industries operate.
Exploiting untapped potential through skills training will help mitigate the problem of unskilled labour in the future, and is set to make a transformational change in the lives of many—churning the circles of progress through a newly skilled workforce at the helm of the country’s economic development.
The author is group director, WeSchool (Welingkar Institute of Management Development & Research, Mumbai and Bangalore)