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“Shallow and impulsive”: Doomsday warnings about jobs in India are misguided, for now

Quartz india
Quartz india

Automation and protectionist policies around the globe are resulting in job losses, hitting Indian employees hard. In India’s information technology (IT) sector, thousands have been laid off from top software firms, while the manufacturing sector is under the constant threat of robots taking up human jobs.

But even though overall job growth is indeed slow in India, the larger story may not be as gory, and experts say we may be overreacting. “I’d like to make the case that this jobs doomsday prediction is shallow, ahistorical and impulsive,” Manish Sabharwal, CEO of TeamLease, a human resources (HR) consultancy, wrote on May 30 in The Indian Express newspaper.

While robots may render some old jobs redundant, they will also create new ones. “The change will be dramatic, but unlike others who are making predictions on the future of the workforce, it will not be catastrophic,” said Harel Tayeb, CEO of New Jersey-based Kryon Systems, an automation services firm.

TeamLease’s Sabharwal expects the industries affected today to hire in the future. “I am willing to wager that in five years, IT employment will rise from the current 3.5 million to six million; in 10 years, manufacturing employment will rise from 10% to 20% of the labour force,” he wrote.

In short, the job-loss apocalypse scenario is anything but real.

IT

Perhaps the most affected is India’s $150 billion IT industry, where employees are even unionising in response to the threat of losing their jobs. However, this general sense of fear in the industry may be unfounded because an important piece of the puzzle has been ignored: the new jobs that automation will bring with it.

“There may be some short term-disruption (because of automation) but the focus needs to be on how you use tech to improve on what exists, and, more importantly, to find things that don’t exist yet,” Navin Budhiraja, head of architecture & technology at Infosys, told Quartz in an interview.

A similar concern about job losses had cropped up when computers were first introduced in India, but instead of wiping out jobs they created more, said Amit Nandkeolyar, assistant professor of organisation behaviour at the Indian School of Business (ISB). “While automation will have some impact, new jobs will come up,” he explained.

Even with the visa pressures, TeamLease’s Sabharwal believes India’s tech industry is comfortably placed. “…the passing shower of H-1B visas pales compared to the climate change in technology—all companies are technology companies, all hardware has a layer of software, data and smartphone costs are cratering, etc. And Bangalore and Hyderabad are probably the only cities in the world where you could hire 1,000 Hadoop programmers in a week,” he wrote.

Manufacturing

India’s manufacturing sector has, too, witnessed low rate of job growth and isolated layoff incidents—carmaker Tata Motors has laid off some 1,500 manager-level employees. However, while firms are adopting automation, especially in the auto sector, the hiring of human labour isn’t declining. For instance, India’s biggest carmaker, Maruti Suzuki, has 1,100 robots working along with 7,000 humans at its factory in Manesar, Haryana.

“The content in a car is steadily increasing and we need a higher number of people to assemble the car as the production line would have a higher number of stops,” Deepesh Rathore of Emerging Markets Automotive Advisors, a Gurugram-based consultancy, told Quartz last month. “Looking across the supply chain (original equipment manufacturers and suppliers), I actually feel that the labour force would increase.”

ISB’s Nandkeolyar added that if customisation is needed in manufacturing, then pure automation is not the solution. “You need to have someone who will solve problems, and study customer preferences,” he said.

Meanwhile, domestic demand is expected to revive as rural incomes inch up, which in turn will boost manufacturing. Already companies are betting on India’s consumption story. “Make-in-India could be Make-for-India till the global storm passes,” Sabharwal said in his write-up.

Financial services

Another sector that could buck the layoff trend is financial services.

The implementation of the goods and services tax (GST), for one, will boost employment. “On an immediate basis, our understanding is that GST shall contribute to direct employment of lakhs of youth in (the) IT and finance side to create systems to enable over 800,000 companies for GST rollout and invoicing,” Lohit Bhatia, business head, IKYA Human Capital, an HR consultancy, said in an emailed note on May 20.

The process of getting firms on board with GST will itself need trained professionals. In the first three to six months, companies and tax firms may need 50,000-60,000 trained professionals, Sunil Goel, managing director of executive search firm Global Hunt, told The Times of India newspaper.

Then there’s the digital finance revolution, which is expected to create 21 million new jobs by 2025, according to McKinsey.

So, it isn’t time to give up yet.

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