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In our development agenda for creating employment, we need to change the discourse in at least three different ways. The first is captured in the Hindi phrase “mujhe naukri nahin, kaam chahiye”. Give me some work, if not a job. We can no longer promise the youth of India, secure, nine-to-five, full time permanent jobs. That paradigm of employment creation is changing not just in India but all over the world. The reasons are many. Firstly, the fast changing technology of producing goods means jobs are getting continuously redefined.
Large-scale employment will not come from large corporations, be they in the private or public sector. It won’t come even from the army, the railways or the government. It will come from small and medium enterprises.
Secondly, the intense pressure of competition from globalisation, means jobs are vanishing. Third, forces of automation and three-dimensional printing make it possible to produce customised and complex products in small batches. This eliminates mass scale production in large assembly lines requiring three shifts of workers. Fourthly, the fast changing nature of consumer preferences calls for changes in job description. So producers have to maintain flexibility. It is also called “agility” in modern management lingo – the ability to quickly respond to changes in the environment, demand pattern or in regulation.
Whatever be the reasons, the days of secure, lifetime employment with one employer are gone. Workers need to be in continuous learning mode, and possibly change “jobs” several times in their working lives. The discourse of employment should thus focus on creation of “work”, not merely jobs. This narrative also means that if you can’t find a job, then create one. Prime Minister Modi too has exhorted the youth to become job creators, not job seekers. Large-scale employment will not come from large corporations, be they in the private or public sector. It won’t come even from the army, the railways or the government. It will come from small and medium enterprises. This leads us to the second change needed in our discourse.
We have a strange situation that workers can’t find enough jobs, and companies can’t find enough qualified workers. It reflects a mismatch in skills and workforce. We have simultaneous existence of skills and jobs shortage.
India’s demographic challenge has been translated into a slogan: “we need to generate ten million jobs every year for the next two decades”. The fact is that most of these “jobs” will actually be from small enterprises or from self-employed workers. In other words, if “jobs” or “work” have to be created in such large numbers, we also need to create a large number of enterprises. Thus, 10 million new jobs, means at least half a million new enterprises to be born every year. How long does it take to start an enterprise? You need several permits, clearances, registrations (like PAN, TAN, TIN, DIN, and who knows what else). This process can take several weeks or months and lots of paperwork. In a place like Singapore, the creation of a new enterprise takes one day. This is the ease of doing business. India has to go a long way in creating conditions for the ease of initiating, sustaining and closing down thousands of enterprises.
The third change of discourse and focus that we need is on skills. We have a strange situation that workers can’t find enough jobs, and companies can’t find enough qualified workers. It reflects a mismatch in skills and workforce. We have simultaneous existence of skills and jobs shortage. Many companies have to train new recruits on the job, because they lack appropriate training. This company training is valuable, but as soon as a worker is trained, he or she is likely to be poached by a rival company which gets a readymade trained worker. Because of this phenomenon, there is a tendency to underinvest in training and skilling by private firms. Who wants to spend resources on training workers, when you might lose them to a competitor? It is here that government intervention is needed. We need some kind of subsidy or incentive payment to companies who train their own workers.
Many western governments have such policies that reward private companies who train their workers. Can private companies not set up training and skilling businesses? Not really, because unlike private tuitions, the business model for skilling does not work even though we have a huge unmet demand for skilling. That’s because the youth who are hungry to get the skilling do not have the deep pockets to pay the large fees. Without adequate fees, you can’t get good teachers or good quality skilling programmes. Here too government intervention is needed in the form of subsidies, standardisation of curriculum and testing, and universally portable accreditation and diplomas. This subsidy from the exchequer will more than pay for itself, since good quality skilled workers will become well paid taxpayers, consumers, savers and investors in their future. Here is one note of caution. The curriculum should be forward-looking, not more of the same (from the past). We have to anticipate skills needed ten years from now, and not even focus on the present demand.
The World Bank estimates that globally there are 1.8 billion youth who are neither in school, skilling or training, nor in a job or looking for work. A big part of this youth is in India. Hence jobs, livelihood, work and employment are a very high priority for us.
The spectre of jobless growth is upon us. In eight sectors tracked by the Labour Bureau of India, job creation has dropped from an annual pace of 10 lakh new jobs to just about 2 lakhs. No doubt that with seven plus per cent GDP growth, jobs are getting created. But they may largely be in the informal sector. We can’t afford further casualisation of labour. The challenge for creating jobs, and work, is not just for livelihoods and income, but also dignity of work. Large numbers of jobless youth could spell social tensions, violence and worse. The World Bank estimates that globally there are 1.8 billion youth who are neither in school, skilling or training, nor in a job or looking for work. A big part of this youth is in India. Hence jobs, livelihood, work and employment are a very high priority for us.
Of course, large scale infrastructure building, as well as a big push for low cost housing will generate demand for work and jobs. But it must sustain well into the future. In summary, these three changes are needed in our discourse. Create work, not just jobs. Create enterprises that in turn will create jobs. And focus on creating future-oriented skills with some support of public money. So give me not a job but some work.
(The writer is a senior economist and Senior Fellow, Takshashila Institution)