Future of Work: New-Age Business Models and Skills
It's every Indian's aspiration to see India as a global economic leader by 2030. However, the demands of industry for skilled manpower in the face of Industry 4.0 is far from being met. The reforms in education and skill sector are simply not at pace while there is rapid transformation in industry and economy.
There are 15 million new entrants every year into the workforce and as per the Ghosh and Ghosh report, 10 million jobs (formal & informal) have been tracked this year. There could be more jobs in other sectors not tracked in that report! However, this demographic advantage is fast becoming a nightmare in the face of large numbers of unemployable semi-skilled graduates coming out of our education system, redundancy of workforce and changed skill set requirements due the impact of Industry 4.0. Also no country has become fully developed without active participation of its 50 per cent women population in economic activities. In India while there is increased participation of girl child in the primary education, unfortunately, women participation in the labour force has decreased to 27 per cent in the recent years driven by higher income in rural areas and lack of adequate opportunities in other sectors.
Employment generation and future of work is the by-product of several mega trends impacting the global economy. Globally, the impact of technology on jobs has been evident and it is assessed that over the next decade or so, the mass adoption of exponential technologies, automation, artificial intelligence, machine learning, internet of things, and 3D printing will drastically transform the workplace. This will not only pave the way for new era of 'human-machine interaction' but also drive a tectonic shift in 'skillsets' requirements.
Historically, skill requirements have changed ever since the first Industrial Revolution reconfigured the role of machines and workers. Coal miners in the past used to carry out heavy physical and manual tasks requiring gross motor skills and physical strength. Today, they increasingly operate machines that do the heavy and dangerous toiling and need to apply more complex skills of monitoring equipments and problem solving. Fifty years back, nurses were required to administer medicines, monitor patients by taking their pulse and temperature, and help with therapeutic tasks. Today, they still administer medicines to patients but also help perform diagnostic tests and analyze the results. On the other hand, doctors are being assisted by robots in surgeries. Similarly, there are many other professions where job roles and skill sets have changed drastically. There were millions of typists and stenographers not so long ago, now they are becoming rare!
The adoption of exponential technologies is disrupting the old order and creating a new narrative by not just demanding new skill sets but opening up opportunities by creating new markets and transforming existing product categories through innovations. The new-age innovation and impact can be understood through three select case studies:
Case Study-1: Workforce vulnerability
In 2016, it was estimated that only 9.5 per cent of supermarkets' revenue would be spent on wages, the lowest since 2004. Improved rostering systems, automated ordering, shelfready packaging and self-serve checkouts allowed the supermarkets to hire younger, lower-skilled staff for cheaper rates in less numbers.¹
Case Study- 2: Collaborative and cooperative workplace
WikiHouse is an open-source system that allows anyone to design, share designs and build a house. With access to a computer numerical control (CNC) machine anyone can digitally fabricate building parts and assemble it like the Lego or IKEA kit. WikiHouse aims to allow companies to cooperate in creating innovative, affordable, customised and sustainable housing systems while equipping individuals to perform tasks that were previously only accomplished by expert companies, changing the nature of the construction supply chain. Currently there are several WikiHouse projects being tested worldwide, reducing the frequency of human intervention.
Case Study- 3: Changing workplace dynamics
Zappos, an e-commerce platform for selling shoes, switched to a holacratic system in 2015, with nearly 1,500 employees now operating without any managers. The new organisational structure is a competitive move that will improve the company's ability to transform itself and stay relevant as the market shifts. It is the belief of the CEO that the new structure, is a way to have every employee act like an entrepreneur and will enable the company's expansion to different markets. Some Australian companies such as the Canva, a design start-up and Atlassian, the enterprise software company, are following the move.²
In 2017, FICCI and NASSCOM commissioned EY to understand impact of new-age technologies in select five sectors in India. The report is the first empirical based study and covers an in-depth analysis of impact of technology, demography and globalization in five crucial sectors - automotive, textiles and apparel, BFSI, IT BPM and retail. It also assesses and highlights the changing
nature of jobs in these sectors, skill requirements and policy recommendations.
In this new fourth industrial narrative, how can a country like India with its diversity, democracy and demography, leverage the technology and match the demand side of job creation with the supply side of ‘new-age workforce’. How can we develop our ‘cluster based job models’ to cater to ‘traditionallyskilled’ people?
A glance at the economy reveals that among the five South Asian countries, informal sector employment is the highest in India. Nearly 81 per cent of the employment in India is in the informal sector. 80.7 per cent of men and 81.6 per cent women are part of the informal economy.³ Majority of employment in the informal sector have no contractual obligations and low job security, hence workers in this segment frequently switch jobs and are prone to domestic or international migration.
India has 2000 traditional skillbased clusters which offer extensive livelihood to the local population. Each cluster, the size of which can vary from 50 households to 5,000 or more, has the potential to create a minimum of five jobs responsible for creating online self-help groups, managing and curating social media channels and websites to give direct linkages to end-consumers, looking up for information on upcoming trade fairs, new government schemes, understanding supply chains and finding out market prices and trends. All-encompassing this can create thousands of jobs or livelihood opportunities.⁴ However, even these clusters need timely intervention to train people on ‘modern-age’ skills which includes creative design patterns for global customers, marketing, digital literacy etc. Such empowerment can control and reverse internal migration.
In the face of uncertain future, the reforms in education and skill ecosystem should be to equip our youth with the 21st century skill sets such as problem solving, emotional intelligence, cognitive abilities, etc. Apprenticeship is the best form of providing hands- on experience to our youth. Several large companies like Thermax, Festo, Maruti Suzuki, Larsen & Tuobro and are actively engaged in apprenticeship and also have focused programmes on women apprentices but do not perceive benefit in engaging with the government. Government needs to make apprenticeship programme attractive for both large & SME industries by making the process transparent, simple and financially viable. For youth apprenticeship should be integrated into academic and career path. Every student should have the opportunity to participate in an apprentice programme.
The new industry policy should facilitate aligned planning in development of industry, research, education and training clusters. Efforts should be towards greater job formalisation, including increased social security coverage and better data gathering so that appropriate policies can be made.
³ ILO annual report on labor employment, 2016-17 ⁴ Annual Report, Cluster Foundation for GoI