Fu­ture of Work: New-Age Business Mod­els and Skills

FICCI Business Digest - - Essays - ¹ Global Tech­nol­ogy Trends, WEF, 2016-17 ² Fu­ture Pri­or­ity Skills, Re­port by Global Com­mit­tee on Em­ployee Pro­duc­tiv­ity,

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

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