The World Economic Forum has projected a slightly lower churn in jobs for the labour markets in India over the next five years compared to the global average of 23%. This churn is the expected movement of jobs (the absolute number of new jobs created and jobs erased) as a proportion of current employment. The WEF’s Future of Jobs 2023 report says the churn globally—led by supply-chain and transportation, media and entertainment, and sports industries—will see 69 million jobs created and 83 million lost. This means 2% of current employment (as surveyed) will be lost. Automation will eat up some of the conventional jobs, but not as fast as expected—at present, it accounts for 34% of the tasks involved, against the Future of Jobs 2020 report’s 33%. Indeed, respondents covered in the 2020 survey believed this would reach 47% by 2025.
The churn in India will largely be technology-driven, via sectors such as artificial intelligence and machine learning, or AI & ML (38%), followed by data analysts and scientists (33%) and data entry clerks (32%). The smallest churn, predictably, will be in labour-intensive segments of the economy. This means, whether or not the number of jobs created exceeds the number of jobs erased, India will have to focus on getting skilling right.
To illustrate, the Organization for Economic Cooperation and Development (OECD) believes India has the highest likelihood of a worker having AI skills—due to its large youth bulge. At the same time, there exists a 51% gap between AI & ML and big data analytics’ (BDA) talent demand and supply, as per a report by Nasscom, Draup, and Salesforce, even when one takes into account the current talent base of 420,000. The gap is significantly worse for specific jobs within AI, ML & BDA—for ML engineers, data scientists, DevOps engineers and data architects, the demand-supply gap is 60-73%. The problem is exacerbated by the quality of talent available; studies such as the one conducted by Aspiring Minds have shown that an overwhelming number of engineering graduates are unemployable with their current level of skills.
But, it is not all bad news. The WEF survey shows employers in India and China remain the most upbeat in terms of future talent availability; more respondents among the companies surveyed for the report in India believed that the existing workforce can be upskilled to pack the pipeline and talent can be retained than those who believed to the contrary. A larger proportion of respondents in the Indian set were inclined to consider improving talent progression and promotion process as well as providing effective reskilling and upskilling as business practices that could improve access to talent than in the global set.
That said, there are many areas where matters need to improve urgently. AI, ML, BDA is just one area of skilling and potential employment generation. The overall skilling effort, across segments of the economy, falls far short of what is required. For instance, just 22% of those certified under the Pradhan Mantri Kaushal Vikas Yojana have found placement. The country’s investment in mid-career upskilling, as per WEF, remains middling, reflected in the high unemployment rate among those with advanced education. Unless India gets its skilling strategy right, the much-hyped demographic dividend may indeed become a demographic disaster.