No. On the contrary, India could well gain from it, provided a comprehensive policy framework is envisioned and implemented
No statement on global workforce, economic growth drivers, and world economy analysis is complete without mentioning India and technology in the same breath. Thanks to the efforts of successive governments, India has cemented its status as a global technological powerhouse. The Government’s determined push on expanding the penetration and use of technology through a slew of policy and executive actions hopes to ensure that technology becomes an integral part of the growth story.
Not so simple
It may be a broad and simplistic view of India’s tryst with technology, particularly on the issue of job creation and the lack of it. But one can say that India has had a ‘blow hot-blow cold’ relationship when it comes to confidence in technology underpinning the broader job creation drive. Jawaharlal Nehru, educated in Britain and inspired by Fabian Socialism, placed technology-driven modernism at the top of his priority list. He was instrumental in creating world class institutions such as the IITs and NITs; he believed that technology would be the bedrock of India’s transformation into a modern society and trained workforce.
Successive leaders could have better capitalised on and acknowledged the salience of technology in job creation. Leaders such as Atal Bihari Vajpayee, Rajiv Gandhi and Chandrababu Naidu did take the pain to pioneer policies, import computers and court global technological giants to create tech-driven jobs in India. Many believe the agglomeration of tech giants in Hyderabad and Bengaluru, and India’s solid foundations on digital literacy, is an outcome of such efforts.
On the other hand, a few instances pithily summarise the lack of confidence amongst some sections of our leadership, with some even claiming that a ban on computers would help create more jobs. Even though it would be too harsh to single out this instance, it exemplifies the deep-rooted distrust, and, to a large extent, the broader policy paralysis around promoting technology at a greater pace. Unfortunately, the overwhelming perception amongst some sections of stakeholders and policymakers is that greater induction of technology will only lead to job losses.
In more recent times, even the otherwise fragmented central trade unions are now working together to find solutions to mitigate job losses due to technological changes — a recent joint national strike by trade unions being a case in point. Job insecurity has fuelled the formation of unions in the IT/ITes sector which has so far remained untouched by unionisation. It is, therefore, fair to say that technology tends to unsettle our leaders when it comes to of job losses.
However, one need not dig deep into data to see how these fears may be unfounded. Rather than causing job losses, technology has created new businesses, processes, products and systems which couldn’t have been imagined before. They improved productivity, which led to a rise in wages and that drove the purchasing power upwards. This expanding purchasing power further created new business opportunities. According to one report, the internet created 2.4 new jobs for every one job lost.
It is not difficult to see how India is well positioned to benefit from job creation on the back of greater technological penetration. This premise is primarily driven by the following aspects:
1. A recent study by Mercer Consulting estimates that over 7 million jobs could be lost by 2020 due to various global disruptions — digitalisation, AI, automation, robotics, longevity, IoT, etc. At the same time, about 2 million jobs will be created in specific sectors. Of these, business and finance ops, management, and computer and mathematics-related job families will see the biggest growth. At the same time, some of the largest economies in the world — the US, the UK, Japan, South Korea — will face a significant gap between talent supply and demand with a net talent deficit position.
India stands out as the country with likely the largest talent pool surplus. When put together, these estimates position India uniquely to capitalise on the opportunity that will be created through technological and other disruptions given India’s surplus talent pool and strength in the identified job segments. India’s credentials as the world’s top exporter of ICT according to the Global Innovation Index, published by WIPO, Cornell and INSEAD jointly, can only further strengthen its ability to capitalise on this opportunity.
2. We must not forget that at the heart of job-creation is our ability to create new businesses and entrepreneurs. Technology is a core enabler of this aspect. Multiple studies by Nasscom, Jones Lang LaSalle’s City Momentum Index, Compass, etc confirm that India is a global growth leader and a leading centre when it comes to startup ecosystems. As new businesses emerge and grow, technology-powered entrepreneurship will be a key platform for millions of jobs in India across all segments of society. The impact is clearly evident in how Alibaba and Tencent’s JD.com have been able to offer a platform to millions of SMEs in China.
3. Technology has enabled connectivity and provided increased access to opportunities. This in turn has led to a robust growth in consumer spending. This is a virtuous cycle which will further create demand for more goods and services and thereby create more business opportunities across all tiers and segments of jobs. The rise of the middle-class in India is the result of such a phenomenon wherein the portion of population categorised as the poorest will have reduced to 22 per cent by 2025 (as opposed to 93 per cent in 1985) with the middle-class comprising over 40 per cent of the population.
Need a robust framework
How India can take advantage of technology to potentially create millions of jobs will depend on the Government’s ability to orchestrate an ecosystem that helps businesses to benefit from technology to drive innovation and growth. To achieve this, India must focus on a comprehensive policy framework that addresses three key pillars in an integrated manner:
1. A calibrated national talent management approach through a deeper labour market analysis as talent scarcity, surprisingly or not, is also on the rise.
2. Introducing strong elements of technology and innovation into the country’s education curriculum, backed by systematic institutional collaboration.
3. Focus on broadening and/or enhancing existing skill development/re-skilling programmes, including planning around job rotation and mobility support (say, along the lines of NSDC and India Skills Initiative being done in collaboration with the WEF).
Rana is a partner at Mercer Consulting; Dhar is a public policy specialist with the office of the vice-chairman, NITI Aayog. – The Hindu BusinessLine