Daily Current Affairs – 25th October, 2016

Daily Current Affairs – 25th October, 2016

Need for Industrial Revolution in India

  • In early 2016, the Economic report of the President (US) highlighted the threat from automation to lesser skilled occupations in manufacturing and services.
  • Resounding the same threat, the recently released World Development Report by the World Bank said that up to 69% of existing jobs in India are under threat from automation.
  • When looked in a macro views, this is not just about displacement of existing occupations but also puts to test the development model of Asian economy.
  • The Asian economy which now tries to establish its foothold at centre of global economy had been in the peripheral due to technological change and colonisation.
  • Now, once again with growth of automation in the western world, the Asian model of development might experience wobble to its position in global economy.

Asia is again at disadvantageous position

  • The Asian model of development was on the basis of state-supported industrialisation. It focussed on export orientation by using lower production costs as a competitive edge.
  • The lower production costs were possible because of the lower labour costs in the early stages and increases in labour productivity later on.
  • Along the East Asia, this model with state and region specific variations was successful.
  • But now, the increasing innovation and dependence on automation will again shift in the favour of owners of intellectual capital and technology which comes from the western countries. Here, there will be diminishing returns to the labour in developing countries with onset of automation. (Meaning: Adding more labour will at some point of time yield lower per-unit returns.)
  • Thus, this will be disadvantageous to countries like India in Asia, which has large, young working population.

India will need new industrial policy

  • India will need an updated policy, Industrial policy 4.0, to align itself to new paradigm of industrialisation. India cannot afford to have business as usual it is more labour based industrialisation.
  • If so happens, India will be demoted back to a peripheral position in the global economy with a large segment of its population unemployable or under-employed in the new economic context.
  • This might lead to terrible socio-economic and political implications.
  • Thus, it is important to keep the inevitable transformation in mind and create an appropriate policy which shall be capable of minimising the negative effect of automation. For this, the industry needs to create competitive opportunities for employment which would require massive resource mobilisation focused on developing the ability of the working population to absorb new skills.
  • The new industrial policy will require investment in high-quality skills related to applied science and technology, engineering, quantitative and social analysis, design and product development.
  • The shopfloor activities will be still done by humans who would require high familiarity with technology and analytical abilities. Hence, the workers would need to have educational levels currently available to college graduates and advanced industrial training institutes.
  • This means that the industrial policy is closely linked to educational policy.


Education as industrial policy

  • India is aware of the abysmal state of its educational standards and quality, especially the higher education system.
  • The primary education has received full focus of the government but after that in higher education, much has been left to situations. This has made the Indian higher education perform poorly as well as creation of inadequate infrastructure. Few stats are mentioned:
  • Industrial training (mostly basic and outdated) creates only 1.7 million graduates annually.
  • In next three decades, over 300 million new workers are expected to be added. In that comparison, the industrial training is appallingly low.
  • There are around 7 million graduates every year from social and natural sciences. It is unfortunate that many of them come from poorly run state universities and also, most of them lack applied skills.
  • It has been observed that institutional expenditure in universities is largely dominated by staff salaries and maintenance (85%).
  • This leaves very little for investment in research and advanced learning modules (5%). This has given rise to culture of mediocrity and low adaptation to change.
  • Major tech firms re-train over 80% of their fresh engineering recruits. Now, this re-training which is largely for ‘low-skill’ jobs are expected to be overtaken by automation!
  • In such a scenario, the quality of teaching required for inculcating Industrialisation can be safely assumed to be absent.
  • Thus, in this condition, if there is no updated industrial policy, India is set to lose its economic growth run.

Conclusion- Need for change

  • There is now a requirement of unflinching political will which will be able to radically alter the existing apparatus of skilling and higher education.
  • Education is a state subject, hence, a political consensus is a critical challenge. The action plan for tackling the educational and training challenge will be a long and painful process as huge resource mobilisation will take place.
  • Hence, it is difficult but inevitable to bring in together multiple stakeholders of educational sector who don’t have vested interests within the teaching and academic community and rather look forward to work for a larger goal.
  • Hence, it requires important interventions like
    1. Private Sector involvement
    2. Financing the curriculum- innovative ways will be required to finance the development of advanced curriculum
    3. Integration with industrial and applied training
    4. Sustainable pool of next-gen teachers and trainers.
    5. Combination of ICT-based training with regular classroom teaching and on-the-job training and creating balance between them.
  • Each of the intervention will require mission-mode initiatives. Interventions like ICT based training will need global best practices and thus the industry has to be on board on framing educational policy.
  • The Skill India programme is good start for the government but it will not be sufficient for the enormity and complexity of the industrialisation issues. It has to be understood that skilling people and educational reforms are two separate initiatives with little actual overlap. Skill India scheme wont solve the poor education standards.
  • Thus, the first step is recognising the enormity of the challenge, second is to integrate the industrial development and available financing options and then re-designing them with a skilling and higher education focus. This would lead to formation of various action plans.
  • The ministry of finance and Ministry of human resource development should start a dialogue on developing the roadmap for an Industrial Policy 4.0 because the new industrial policy will be focussed on making Indian human resources ready for the next level of industrialisation.
  • This is a long and difficult path but if not taken, there is a risk of not being able to maintain the economic growth in the country and after automation takes over manpower jobs, India might suffer once again from under-development and under-employment.

Connecting the dots:

  • What is automation? Is it a threat to developing countries? Critically examine.
  • Technologies like Automation, artificial intelligence are slowly taking over human jobs. Is this an alarming situation? What should be done to prevent robots from ruining human lives and livelihood? Discuss.

nternational North-South Transit Corridor (INSTC)

Share this post