India is on the cusp of implementing in a big way emerging technologies such as 5G, artificial intelligence, autonomous systems, blockchain, cloud and quantum computing, digital mechanisms, to improve the living conditions of its people, to the next level. Almost all the sectors of the economy may witness revolutionary changes (in financial services, transport, information technology, manufacturing, educational sectors), the externalities of which may have a huge positive impact on economy’s growth.
However, international agencies highlight reduction in job opportunities due to innovative technologies. This necessitates exploring how emerging technologies lead to creation of employment opportunities.
The most promising development is that of Indian start-ups ecosystem which is the third largest globally with more than 60,000 start-ups across 642 districts and also 65 unicorns across various industries [CB Insights Global Unicorn List, 2022]. This means, huge scope for entrepreneurial ventures; essentially, the self-employment will indirectly provide employment opportunities too.
These start-ups are specialised in fintech, e-commerce, supply chain logistics, internet and software services and ed-tech, which are indeed emerging technology applications. Thus, if entrepreneurial skills are imparted to the disruptive skilled population, India may witness a substantive shift from wage employment to self-employment adding to the formal sector.
Application of emerging technologies may result in formalisation of the economy — AI, blockchain and BigData can help the Government track the chain of economic activities to the last mile. This record of economic activities could help the financial platforms to finance existing unorganised manufacturing or traditional sector at a nominal rate, which indeed helps them reduce their cost of production and deliver their products at a competitive rate. This may, in turn, enhance their income, the multiplier effect of which will lead to to more employment opportunities.
Currently, as per available data sources, a major chunk of the labour force is concentrated in agriculture, construction and unorganised allied sectors. The construction sector may not witness adoption of advanced technologies as it may not be able to compete with the cheap labour available. Similarly, though advanced robotics may find application in auto manufacturing, the auto component manufacturing still requires professional, skilled and semi-skilled labour in India.
The telecom sector, banking on new opportunities of 5G, may provide a wide range of employment opportunities as per the projections of Telecom Sector Skill Council. On the other hand, the unorganised allied sectors, due to formalisation, may witness more employment opportunities.
Scenario analysis of major sectors of the economy may lead to interesting conclusions. In the case of agriculture , AI and IoT may help farmers improve yield and reduce information asymmetries, resulting in increase in their income. Similarly, application of ‘blockchain’ in the travel and tourism industry, coupled with innovative digital strategies and apps, may disrupt the tourism sector, with positive externalities for allied sectors such as medical and virgin tourist destinations.
Cloud computing in ICT offers flexibility for greater collaboration with work teams, better control of documents, work from anywhere environment leading to increase in productivity, and innovation offering positive externalities and employment across the sector. The legal sector is also witnessing application of disruptive technologies which indeed ensure more employment opportunities for ICT and data analytics professionals, and this is one sector which may not witness loss of employment. Micro-technologies, especially in digital banking, connectivity and transport services may improve labour productivity.
Various research studies reveal that educated unemployment in India is mainly due to factors which include, among other things, information asymmetries, lack of guidance for suitable jobs, etc., which indeed may get resolved through online tools and platforms as also flexible working environment. India has comprehensively reviewed its regulatory, policy and legal framework, enabling it to be one of the best ‘ease of doing business’ destinations. This, along with its cheap and educated manpower, may be favourable for building micro supply chains within India. This may indeed pave the way for the country to become a global manufacturing hub.
If we consider Rostow’s five stages of growth, India is presently placed in the ‘take-off’ stage where investment leads to increased income, savings and further investment. The next stage is ‘drive to economic maturity’, characterised by tech innovation leading to diverse range of investment opportunities and relying on less imports, wherein technology is used widely.
The writer is with the Ministry of Finance. Views are personal
A promising development is that of Indian start-ups ecosystem, which is the third largest globally. This means huge scope for entrepreneurial ventures