Automation without tears: Government, India Inc must invest in up-skilling for this

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New Delhi | Published: September 19, 2018 2:35:11 AM

A new World Economic Forum report says that automation will make 75 million existing jobs redundant by 2022.

The WEF report estimates that nearly 54% of the country’s workforce today is in need of re-skilling.

A new World Economic Forum report says that automation will make 75 million existing jobs redundant by 2022. Even though it will create 133 million new ones—a net gain of 58 million jobs—WEF founder Klaus Schwab warns that this net gain is not a “foregone conclusion”. This uncertainty stems from governments’ and private players’ capacity to invest and re-skill or up-skill millions in the workforce as much as from the eventual scope of automation itself. Governments and companies will both have to step up their game if the lose-lose situation is to be avoided—one where rapid technological developments mean widespread automation even as the talent gap and inequality widen because enough resources weren’t allocated to developing the skills of the workforce.

There may seem no real reason to panic—McKinsey Global Institute’s (MGI’s) mid-point estimate of job loss due to automation in India stands at 57 million while its baseline scenario projects 114 million new jobs due to the resulting higher incomes and productivity hikes. But, that only holds if India is able to up-skill workers at a drastic pace. MGI estimates that 100 million new jobs by 2030 will need at least a secondary-level education and jobs requiring college-level degrees to go up by 50%. In sharp contrast, India’s manufacturing sector has staggering levels of under-education—in textiles/clothing industry alone, an Icrier paper estimates, 55% of workers with no formal education, nearly two-thirds of those with below primary level education and 54% with primary education hold jobs that require higher levels of educational attainment. Correcting the existing mismatch while, at the same time, creating potential for a future of rife automation, is going to need massive targetted efforts, including sizeable capital investment.

The WEF report estimates that nearly 54% of the country’s workforce today is in need of re-skilling, with nearly 41% needing re-skilling/up-skilling levels that could take anywhere between one month to over a year to achieve—India has the fourth-highest average re-skilling needs in terms of days needed to achieve this. While 83% of the corporate respondents from India in the WEF study are looking to automate the work in response to shifting skill needs and 51% say it is likely that they will cut staff that lack the requisite skills, a high 79% say it is likely that they will consider retraining existing employees, and 78% also say that they will consider hiring new permanent staff with skills relevant to new technologies. This means India Inc is willing to do some of the heavy-lifting when it comes to bridging the skills gap. This puts the ball squarely in the government’s court. Apart from fixing the mess the country’s education system is in—including the mismatch with industry-needs, which will mean a greater focus on STEM and non-cognitive soft skills—the government will need to give job creation a boost through increased investment, with the private sector, and reforming antediluvian labour laws. For those who will still fall through the gaps, the government, WEF suggests, must come with efficient social protection schemes.

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