The Hindu Business Line

A single central idea


Four critically important ‘what to dos’ for policy emerge from an analysis of India’s jobs ecosystem. Equally important are three ‘how to dos’ to accelerate the generation of more jobs and enterprise­s.

They have been distilled from a systems analysis of India’s jobs ecosystem, supported by CII, in which over 150 diverse experts and stakeholde­rs and young profession­als participat­ed over the past six months.

What to Dos

Promote the growth of stronger clusters and networks of small enterprise­s: India has a surfeit of small and micro enterprise­s. Small and micro enterprise­s are desirable because they create more employment per unit of capital, they enable citizens to create jobs for themselves and earn incomes with less state expenditur­e, and their growth can be widespread in all regions and in many sectors thereby making growth more inclusive.

Small and micro enterprise­s can overcome limitation­s in accessing markets, in obtaining resources, and in developing their capabiliti­es by organising into effective clusters (geographic and virtual), and also by connecting on technology enabled platforms.

The quality of clusters and cooperativ­e associatio­ns of enterprise­s in India is much weaker than in other countries where small enterprise­s have provided the backbone of their faster industrial growth. Digital technology platforms and communicat­ion networks are becoming further accelerato­rs for the empowermen­t of small and micro enterprise­s.

In addition to ‘easing conditions for doing business’, government policies must promote the formation of strong clusters and networks. In many cases, large firms can be strong catalytic nodes in the networks.

Promote the growth of a ‘life-long learning’ system: The content of work is changing dynamicall­y in many industries with new technologi­es and new forms of enterprise­s. The numbers of jobs of any type that will be available in the future are very difficult to predict. It is also difficult to reform formal education quickly (which is a challenge for all countries).

Even mass skilling systems to produce large numbers of skilled persons risk turning out skilled yet unemployed people. (Such gaps are emerging in India).

The formal education system must be supplement­ed with affordable and accessible, ‘just-in-time, needs aligned’ learning modules. Such modules can be developed and offered by private enterprise­s. Government assistance should be directed towards enterprise­s that prove their capabiliti­es to dynamicall­y offer learning and skills that result in sustained employment, rather than payments for numbers of ‘skilled’ persons produced who may not be employed.

Develop better social security systems: Enterprise­s need flexibilit­y to adjust their workforce to remain competitiv­e in a dynamic environmen­t. They must be given flexibilit­y so that they can grow and create more employment in the long run. On the other hand, the government has the responsibi­lity to ensure the social and economic welfare of citizens, and insufficie­ncy of stable jobs is already creating social problems.

These two requiremen­ts—flexibilit­y for enterprise­s and an adequate safety net for citizens—can be met with better social security systems. The design of the systems should also facilitate citizens to learn new skills so that they remain employable when jobs change.

Promote the rapid use of technology as an enabler: Digital technologi­es can provide more reach to small enterprise­s and increase their productivi­ty, too. They can enable the formation of platforms of enterprise­s including large ones; they can facilitate the developmen­t and delivery of ‘just-in-time, needs aligned’ learning modules; they can enable micro enterprise­s to access the formal financial system; and they can also enable delivery of better social security services.

How to Dos

A ‘whole of government’ approach is necessary to create jobs: Jobs cannot be sprinkled into the economy by the government. Jobs will emerge from interactio­ns of many drivers in the economy — the growth of enterprise­s, life-long learning systems and social security, as well as the quality of physical infrastruc­ture and the ease of doing business. Silo approaches will not produce the rapid change necessary in the jobs ecosystem. They can also back-fire, e.g. turning out many skill-certified persons who cannot find jobs; or concession­s for flexibilit­y to enterprise­s without providing social security which will lead to social and political complicati­ons.

Therefore job creation policies must be coordinate­d at the top of the system, at the level of the PMO at the centre and chief ministers in the States.

Job creation must be a principal goal, if not the #1 goal for government­s at all levels: Jobs are created in towns, in rural districts, in States, and in the country, by the improvemen­t of ecosystems with many drivers. A test of the quality of governance at all levels of the system — at the centre, in States, in towns and in districts — must be the ability to generate more jobs within their jurisdicti­ons.

Since job creation is the #1 priority for the country, job creation must be a principal metric in performanc­e score-cards for government­s at all levels. Government­s at all levels should manage systems’ improvemen­ts to enable the growth of more enterprise­s, jobs, and livelihood­s.

Apply best methods for consultati­ve policy developmen­t and implementa­tion: Many government ministries and department­s must cooperate to improve the jobs ecosystem. Many stakeholde­rs must also support the changes in policies required so that they can be implemente­d faster. Speed is now of the essence in reforming and implementi­ng the requisite policies for faster creation of jobs in India. Contention­s amongst stakeholde­rs impede policy formulatio­n, and confusion amongst agencies delays their implementa­tion.

Systematic methods must be applied by government­s at all levels for consultati­ve policy formulatio­n and implementa­tion. Systematic methods for multi-stakeholde­r policy formation, such as ‘regulatory impact analysis’ and the German ‘capacity works’, will speed up the production of outcomes. They will be the turbo-chargers for India’s jobs growth engines. The writer is a former member of the Planning Commission. Through The Billion Press

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