Story Highlights

• India has the unique problem of having to migrate millions of people from agriculture to services, without the help of manufacturing to create jobs
• Due to automation and China’s dominance in manufacturing, manufacturing-led job creation is broken at this point today
• The good news is that newer companies will create jobs. But not in the traditional sense. They will create quasi employees and quasi entrepreneurs

Automation is posing a real and palpable threat to jobs that exist today. However, India has the unique problem of having to migrate millions of people from agriculture to services, without the help of manufacturing to create jobs, technocrat Nandan Nilekani said here in Bengaluru on Monday.

“If we don’t have job creation in manufacturing and have millions of people in agriculture, can we migrate them directly to services? No one in the world has done that yet,” said Nilekani. He was speaking at a fireside chat with author and management consultant Abhijit Bhaduri at the Future of Jobs in India Summit, organised by FactorDaily in association with CareerNet.

With more than 10 lakh Indians turning 18 every month, job creation is a particularly grave concern for the country, although the economy is growing at a fast clip. Job creation in India is at a seven-year low. Only 1.35 lakh jobs were created in 2015 in major industries such as textiles, leather, automotive, gems and jewellery, transportation, information technology and metals, according to data from the labour bureau.

Without large-scale job creation, the demographic dividend that is considered one of India’s biggest advantage, could soon turn into a crisis of epic proportions.

The tech billionaire, part of the co-founding team of Infosys which led India’s information technology (IT) revolution, said that due to automation and China’s dominance in manufacturing, manufacturing-led job creation is broken at this point today. Companies like Adidas and Apple have started manufacturing in their home countries, making use of highly automated factories, and that leaves very little scope for job creation in countries like India, he said.

“Countries like the United States, Japan and China grew by manufacturing and exporting their product. So, people went from agriculture to manufacturing to services,” he said. In India, manufacturing-led job creation will be a challenge,” he said. As automated factories bring down the cost of manufacturing and the ability to ship large volumes of goods across the globe improves, the cost arbitrage that fuelled Asian job growth will no longer exist as it did, he added.

 

Companies, especially in the tech sector, will continue to do well but they may not create jobs by the millions like it did in the last two decades. “We have a special need to go directly from agriculture to services and we have to think how do we create a service revolution,” said Nilekani.

The good news, however, is that newer companies will create jobs. But not in the traditional sense. “These jobs are quasi employees, quasi entrepreneurs,” he said. Flipkart, for instance, has 1,00,000 sellers on its platform. Ola, has over 3,00,000 cabs plying in Indian cities.

We have to make sure that we use technology to create jobs and not to destroy them, he said. “In some sense, the western use of artificial intelligence (AI), is to make you dumber… whereas if you use AI to give better medical services and education, instead of making you dumber, we’re using it to empower you,” said Nilekani.

In an earlier interview with FactorDaily, Nilekani had said that domestic-led, services and platforms will create more jobs in India.

“We’re going to see a scenario where technology is going to be the Brahma, Vishnu and Shiva. It’s going to create jobs and destroy jobs,” Bhaduri said.

Also read:

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