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The coming Jobs War & and my own tiny effort: introducing Illuminate!

4 September 2012 361 views 6 Comments

A few days back, I stumbled on this NYT Op-Ed by Charles Blow in which he talked about “The Coming Jobs War” – the new book by Gallup Chairman, Jim Clifton.  Mr Blow wrote (emphasis added):

According to Clifton, “the coming world war is an all-out global war for good jobs.

Clifton explains that of the world’s five billion people over 15 years old, three billion said they worked or wanted to work, but there are only 1.2 billion full-time, formal jobs.

In the book he makes this striking statement, drawing from all of Gallup’s data: “The primary will of the world is no longer about peace or freedom or even democracy; it is not about having a family, and it is neither about God nor about owning a home or land. The will of the world is first and foremost to have a good job. Everything else comes after that.

The only problem is that there are not enough good jobs to go around.

“…the world will be led with economic force — a force that is primarily driven by job creation and quality G.D.P. growth.”.. And..we (USA) don’t appear to be poised to fight this war. In education we’ve gone from leading to lagging, our infrastructure is literally crumbling around us, ever-expanding health care costs threaten to suffocate us and our politics have succumbed to paralysis.

Although the last few lines are about USA, they appear even more stark when viewed from India – where things are decidedly worse.

The challenge is humungous – and depressingly, the government is blithely unaware of it.

We dont have a coherent education policy;  the sector remains in thrall of politicians & would-be politicians, shackled by bureaucracy and red-tape (as an aside, do read Dr Atanu Dey and “The Commodification of Education” and RealityCheck’s series of posts on RTE).  Skills-based training and vocational education get lip-service but precious else. Instead of creating a vibrant SME sector, led by manufacturing and services, we continue to worry about monsoons and lament the plight of the farmer. All this in the middle of one the biggest demographic shifts in history, anywhere in the world. I am of course, talking about the youth bulge and our unparalleled demographic advantage. This however is not quite as straight-foward. As a recent article pointed out,

India’s youthful population can be viewed as a double-edged sword – capable of bringing great benefit to the country in the decades ahead, but with extensive demands that, under current economic conditions, the country looks unable to fulfill.

A recent IMF report suggests that India’s demographic dividend alone could contribute two percentage points to its annual G.D.P. growth for the next two decades, if the country adopts the right policies…

A 2010 Goldman Sachs paper projected that India’s industry would need to create nearly 40 million jobs by the end of this decade to absorb this huge increase in the labor force. Aided by the demographic dividend, India could clock economic growth of 7 to 9 percent until 2030, possibly wiping out absolute poverty as we know it today..

Some commentators now fear that India’s much touted demographic dividend is on the verge of going horribly wrong – that the economy may not produce enough jobs to absorb the fast-growing labor force, leaving millions of young people feeling bitter and betrayed.

As I have publicly said many times,

A youthful population is an asset only if it is healthy – and it is educated (read skilled). Otherwise it can be a massive force of social disruption…

The challenges we face on this front (education, skills, training and creating jobs) are massive and not really of the kind that can be countered by individual efforts..But try we must..for there really is no other choice..So I continue to do my own little bit.. the latest effort in this direction is Illuminate!

Illuminate! is a series of workshops in collaboration with IIT Bombay that I will be leading over the next few weeks across different cities in India. This promises to be exhilarating – and also exhausting. But I am looking forward to it because I firmly believe there is no other way to create jobs at a massive scale in the situation we find ourselves in, except by promoting entrepreneurship, by encouraging risk-taking and by celebrating failures that will inevitable result from such risk-taking. I am hardly alone in thinking this – and I have been influenced by many others on this matter, including people far more experienced and smarter than me.   Entrepreneurship and job creation are fundamental to development and growth – 2 things we need badly. As numerous experts, including the redoubtable Narayana Murthy have publicly pointed out:

The only way to eliminate poverty is through the creation of jobs. And this can be best achieved through entrepreneurship

In some of my public presentations, I have made the point on how NREGA funds could be better used to impart skills and help entrepreneurs set up businesses to create jobs or set up vocational training colleges, instead of guaranteeing employment to unskilled labour. But that is a topic for another day..In the meantime, if I can ignite the spark of entrepreneurship in even a few young minds, I would think this whole effort has been worthwhile..Please help us spread the word…and wish me luck! Jai Hind, Jai Bharat!

Related Post: Is India’s young population a time-bomb waiting to explode?

6 Comments »

  • 1. Kumar_N said:

    This is a good initiative and we need many more like this.

    However, most of the initiatives in promoting entrepreneurship seem to target the technology sector and premised upon the mobile, internet, and retail sectors. What we need in significantly more number are initiatives that target the skill shortage in rural areas, and ideas that could be implemented in the small towns (10,000 to 2,00, 000 population) of India. Business ideas that could impact priority areas such as sanitation, drinking water, provision of quality food products at cost-effective rates, primary education and so on.

    I wish ‘Illuminate’ all the success, but in my opinion, such initiatives won’t count as much as a single initiative for rural/semi-urban entreprenurship. That is where we have the most youth, and we don’t want all of them to migrate to the cities, do we? We need to help them transform their small towns into livable urban spaces.

  • 2. santosh said:

    hi,

    I entirely agree to the predictions about jobs. Also being through the trials and turbulations of being an enterpreneur myself. I have an opinion which i would like to share. The focus should not be on “enterpreneurship” but more on skill development which would enable a person to either work for someone or strike out on his own. the need of skilled personnel is huge in engineering and those in that area will agree with me. Day by day getting good people is frustrating. It would certainly be a great service if we are able to create a crop of skilled people in various tasks.

  • 3. S.Ranganaathan said:

    Pranamah Shantanau ji, wishing you the very best in your endeavor with the youth of Bharat…Anytime, Pls. do buzz me for any help required.
    Jai Bharat….Vande Mataram
    S.Ranganaathan

  • 4. Dr. O. P. Sudrania said:

    Morality is a word that sounds perfect if it is not to be applied to oneself in the current perspective. People work hard and pay taxes to every kind of govt in every nation. Hence people have the right to expect the basic minimum infrastructure facility like water supply, education, electricity and other power sources, means of communication, safe living free from terror, etc. Who is going to do all these? If the govt in question is unable to do it, they have no right to stay in power either.

    It has become a fashion globally to expect people paying them even for their electins and then these people only deliver surmons while their bank balances and properties swell. Hence the govt people have their duties to fulfil towards their tax payers. The alternative views must be born in mind.

  • 5. B Shantanu (author) said:

    From India’s Demographic Dividend: Asset or Liability?, January 09, 2013 an excerpt..

    According to the United Nations, the working-age population will increase by about 600 million globally in the next decade. While there will be a decline in the developing countries by almost 17 million, the global economy as a whole is expected to experience a skilled manpower shortage of 56 million by 2020, he added.

    India will be one of the few countries in the world with a working age population that exceeds its number of retirees. “By 2020, the average Indian will be only 29 years of age, compared with 37 in China and the U.S., 45 in Western Europe, and 48 in Japan,” Ramadorai pointed out. That means India will experience an age advantage for at least three decades, through 2040. “So this is where I see an unprecedented opportunity,” he added. The future is bright “if Indians skill themselves to suit the future demand for jobs both domestic and abroad.”

    If India can make employment and skill level a priority, it might be able to fill the gaps in the world’s manpower shortage and “become the resource pool of the world,” Ramadorai said. “We need to see this as an opportunity,” he added. Getting India’s labor pool ready for export will be “the largest and most complex human resources exercise in the world.”

    Arvind Subramanian, a senior fellow at the Peterson Institute for International Economics and senior fellow and director of the India Initiative at the Center for Global Development, was more skeptical …Subramanian noted. “We have developed based on skilled services rather than using our abundant pool of unskilled labor. All of East Asia, even China, in the early phases developed using low-skilled, abundant labor. We have completely neglected that.”

    …It will be difficult at this point for India to build a manufacturing sector for unskilled labor, Subramanian suggested. “That is not going to happen.” Much of manufacturing today is already shifting toward robots and machines. “Within manufacturing, it’s become much more skill intensive. Within our exports, it’s become more skill intensive. It is not becoming unskilled-labor intensive,” Subramanian said.

    India’s only other option is to upgrade workers’ skills so that as the economy demands more skilled labor, there will be a supply of people to fill those positions. Subramanian expressed doubt that India could train workers fast enough. “While there will be very good private sector initiatives to respond to this, I think the public sector will just not be able to supply the kind of skills in the quantities that we need going forward,” Subramanian noted. “What that means is that one or two cohorts of unskilled labor will get left behind.”

    Subramanian called the scenario “an unavoidable and inevitable consequence” of India’s precocious model of development. “I think we have a problem on our hands,” he added.

    …Sanjay Modi, managing director of online recruitment firm Monster.com for India, the Middle East and Southeast Asia, suggests that there is a lack of adequate communication and collaboration between the government, academia and industry in India. “For instance, while business has changed drastically in the past 10 years, the curriculum in educational institutions is the same as it was a couple of decades ago. And the sheer process of bringing in any change in the curriculum is so tedious that it simply gets bogged down,” says Modi. “What is needed is a strategy of three Es — education, employability and employment. What we have to focus on first is education. This will lead to higher employability.”

    In an earlier India Knowledge@Wharton article, Manish Sabharwal, chairman of TeamLease Services, a leading human resource services provider, pointed out that skill development is only one part of the solution. Sabharwal noted: “There are three problems in the current Indian system: matching supply and demand, repairing supply for demand and preparing supply for demand. What we are all focusing on right now in terms of employability … is only the repair part. This is a low-hanging fruit. But this repair pipeline will run dry if the prepare pipeline, by way of education reforms, is not fixed. And that is something that the government and academia need to work on.”

  • 6. B Shantanu (author) said:

    From Couplet wars, missing jobs and India’s Democracy deficit by Shankkar Aiyar, 10th March 2013:


    The banality of political discourse is in stark contrast to the gravity of the crisis in the political economy. The big elephant in the room—that neither the Opposition nor the Congress-led UPA is willing to recognise—is the failure of the economy to create jobs. To appreciate the magnitude of the crisis, consider two data points. Every year, the government estimates, 12 million youth enter the workforce. The universities inform us that every year 16 million enrol for graduate courses. Is the economy ready to absorb this quantum?

    Between 2004 and 2013, the economy has grown from around $750 billion to nearly $2 trillion. What has been the accretion of jobs in the period? Sure, the economy must have created jobs in the informal sector, particularly the construction sector. The question though is what about jobs for the skilled and educated? The 12th Plan lets the cat out of the bag: “Employment in manufacturing declined in absolute terms from 55 million to 50 million between 2004-05 and 2009-10, after having grown from 44 million to 55 million between 1999-2000 and 2004-05. In services, employment increased from 94.20 million in 1999-2000 to 112.81 million in 2004-05 and declined marginally to 112.33 million in 2009-10. The working group on employment for the 12th Plan reveals that between 1999 and 2004, the economy across all sectors added 60 million jobs while between 2005 and 2010, it added barely 2.72 million jobs. Nearly 70 per cent of those queued at employment exchanges are under 29 years of age.

    It is this glaring failure that the Opposition should have been challenging the government on instead of exchanging couplets. Why aren’t jobs being created? The most immediate and apparent reason is falling investment and resultant slowdown in growth. Projects worth over `7 lakh crore are pending clearances. These investments would have created jobs, incomes, demand, consumption and growth. That outcome is stranded in the civil war in the government.

    The tragedy is that manufacturing was supposed to shift excess labour from farms to factories. Manufacturing, however, is growing slower than agriculture, and is stagnating at 15 per cent of the GDP despite two decades of reforms and nine years of Manmohan Singh regime. Indeed, India lags at the bottom of the table at No. 14 when it comes to manufacturing as a share of GDP, trailing its BRICS peers and even Turkey, Thailand, Malaysia, Poland and Argentina.

    There are other long-term issues that dog job creation. The qualification policy for MSME (partially attended to in Budget 2013) that inhibits small and medium sectors from expanding for fear of losing benefits. Add to this the plethora of labour laws.
    There are 54 different laws governing workers. There are five laws for wages; three for provident fund/insurance/gratuity; four laws on contract/maternity/welfare… so on and so forth. The laws ostensibly intended to preserve jobs work to preclude job creation.


    The other issue is employability. India spent over `22 lakh crore between 2007 and 2012 on social sector programmes. In 2012-13, the Centre and states spent over `3.3 lakh crore on education. Yet, class V students can’t read class II text. An industry chamber study reveals that barely 15 per cent of graduates are employable; an IT companies survey reveals that only 25 per cent of engineers are employable, while another study has castigated the non-relevance of the MBA curriculum for employment.

    The job challenge is not just about graduates. India needs to train its human talent with skills. There is a surfeit of committees, commissions and corporations, and a dearth of outcomes. The minutes of the 10th meeting of the National Skill Development Coordination Board are an eye-opener. In 2012-13, the government had set a target imparting skills to 85 lakh persons. Achievement: 14 lakh.

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