IT, BPO no longer job creating sectors; focus on renewable and medical technology, says Jayant Sinha
According to United Nations unemployment in India will rise to 18 million in 2018 with automation as the major threat.
Think service sector, think Information Technology; but don’t look at them for jobs, feels the government, which believes that automation and technology are the new areas that will push jobs in the market.
Jayant Sinha, minister of state, civil aviation, today said that the economy is “going through a paradigm shift” and that there is a lot of innovation happening.
“Right now, we are going through a paradigm shift in the economy… We are going through a fundamental and structural transformation and that’s why the job numbers, which are sort of a traditional way, are really not a good way to understand the jobs of the future…,” he said at the India Economic Summit 2017 organized by World Economic Forum and the Confederation of Indian Industry (CII).
He said that India is moving towards newer ways of employment, like micro-entrepreneurship, and that such technology-driven sectors will create jobs.
“Every time a new economic cycle starts, it’s not the old industries that really power it, it’s the new industry,” said Sinha. “Don’t look at IT services and business process outsourcing (BPO), that industry is maturing. Look at aviation, for example, or renewable energies or medical technology, that’s where the new growth is going to come from”.
Modi government rose to power in 2014 on the pretext of job creation. It has now taken a stand of being a “job enabler” and not a job “creator”.
Sinha said that the government can only enable people to apply for jobs but can’t create direct employment.
According to Associated Chambers of Commerce and Industry of India (ASSOCHAM), a trade body, Indian labour market sees an addition of approximately 72 lakh people to potential workforce.
Data revealed by Centre for Monitoring Indian Economy, a business information company that produces business and economic database, also showed that potential workforce bloated by 9.7 million people during January to April, 2017 to touch 960 million mark.
It was, however, reported that 1.5 million people lost jobs during this period.
“While the number of persons employed fell by 1.5 million, the number of people who declared themselves unemployed fell much more – by 9.6 million. As a result, the labour force fell by 11 million,” the data said.
A recent study by United Nation’s International Labour Organisation’s study said that “unemployment in India is projected to increase from 17.7 million last year to 17.8 million in 2017 and 18 million next year”.
Unemployment rate has been rising in India and stood at 4.5 percent on October 3, higher from 4.47 percent during September as per BSE data.
A study by World Economic Forum also shows that beyond 2020, world would be looking towards more technologically driven jobs rather than manual tasks.
As per the report, cognitive skills would be required as much as 52 percent for any job by 2025, while manual skills would be reduced to only 31 percent.
“The absolute bottom of the pyramid and the absolute top, they are very hard to water break… it’s the middle that is at the immediate threat due to automations,” said Utkarsh Amitabh, manager, business development, Microsoft corporation, India.
Smriti .Z. Irani, minister of textiles, said that government must now look at various “layers” between mainstream sectors to unleash the “untapped potential”.
“India has never ever leveraged it textiles and handcrafts strength under one roof,” said Irani adding that India was at the “mercy of other countries” who would agree to purchase the produce at “cheapest price”.
“When you look at textiles, is it only a concentration to apparel? No. The concentration has to be at the grass-root level,” she said.
She added that even if the country is moving towards automation and technology, we should now provide skills to people to assist them in running those new machines.
“When we get into textiles… we have a huge design capacity… but are we engaging more and more students into that designing capacity? We can tap that,” Irani said adding that we can become better by “packaging well”.
“If you look at a Chinese drum, they are packaging well… Our drums are as exclusive but we are not packaging well… So where do we get that additional job? We get that when we inspire people to attach them a design school that the government pays for and learn a new packaging concept that will provide additionality in terms of job and at that level,” she said. “If we look at a sector, there are many layers and those are the areas that will give jobs”.
Other methods suggested to boost job market were to focus on workforce residing in rural areas, adopting bottom up approach with focus on lower levels for jobs and focus on improving education among people.
“There are many areas to work on… But we can focus on education for all the answers,” said Sinha.
“One problem that keeps me awake is jobs,” said Hari .S. Bhartia, founder and co-chairman, Jubiliant Bhartia Group, a conglomerate.
“We have very large number of people coming into the job market. We have double pressure; population is one, deficiency of agriculture (is another concern)… Because 50 to 70 percent of the people are employed in agriculture, which is difficult to sustain,” he said. “Creating jobs is the biggest challenge and we all have to work together”.