India’s Joblessness Dilemma

 

A major concern of the Indian policymakers is that the economy is not creating enough jobs despite a healthy growth in GDP. As postulated by Peter Drucker there are three dominant methods of production – job-shop production, batch production and process or continuous production. Job-shop production is small scale, skill-intensive, and flexible. It absorbs large amount of labour. Batch production, on the other hand, standardises output in runs, balances labour and capital, while facilitating increase in productivity through learning and coordination. And then there is process or continuous production that is capital-intensive, automated and capable of generating very high output but employs very few workers. Indian policy-planners have generally favoured process production almost in all sectors – be it manufacturing, infrastructure development and even agriculture.

Somehow, in India, job-shop and batch systems have not been encouraged to mature beneath the process production resulting in loss of job opportunities. For example, adjacent activities related to agriculture like machinery repair services, agri-input preparation, grading and sorting, local processing, storage and transport and small manufacturing that belong to job shops or batch mode of production have not received the attention that these deserve. On the other hand, India leap-frogged from artisanal production directly into a large capital-intensive process production phase bypassing the batch production phase. The latter historically gives a boost to mass employment, skill generation and productivity growth.

That is exactly where India’s growth-employment paradox sits. There is a need to link production, skills, education, industry and policy into one coherent picture.

Job-shop, batch and process production require different skills.

Skills Demanded by Job-shop Production

Job-shops thrive on and require:

• Hands-on technical skills like repair, fabrication, fitting, tailoring, food processing, carpentry, electrical/mechanical maintenance.
• Problem-solving ability involving diagnosing unique, non-standard tasks.
• Craftsmanship and quality consciousness.
• Multi-skilling where one worker could perform several related tasks.
• Entrepreneurial skills encompassing costing, customer dealing, basic accounting.
• Local knowledge and adaptability
• Apprenticeship-based learning, not classroom-heavy instruction

These skills are best learned through doing, mentoring, and repetition and not examinations.

Skills Required in Batch Production

Batch production acts as a bridge between craft and automation. This stage generates large numbers of skilled and semi-skilled workers as also technicians and foremen who form the backbone of large economies.

Batch production involves standardised runs, learning-by-doing, and balance of labour and capital. It needs:

• Process discipline that follow standard operating procedures.
• Coordination and teamwork.
• Supervisory and shop-floor management skills.
• Basic industrial engineering skills like knowledge of workflow, layout, time management.
• Quality control and inspection.
• Machine operation and routine maintenance.
• Data literacy at a basic level like maintenance of records and output tracking.
• Incremental innovation skills that help in improving productivity through experience.

Skills Required for Process/Continuous Production

Process production demands fewer but very advanced skills like:

• Engineering and systems thinking.
• Automation, robotics, and control systems.
• Data analytics and digital skills.
• Predictive maintenance.
• Safety, compliance, and risk management.
• R&D and design capability.
• High-level management and optimisation skills.

These are elite skills, not mass-employment skills.

Role Played by Indian Education Institutions

Unfortunately, Indian education institutions have not been able to contribute, at least in a balanced way, to create a productive labour force and human capital with these skills.

Indian institutions have mainly focussed on providing/generating:

• Engineering degrees.
• Theoretical knowledge.
• White-collar aspirations.
• Process-production skills for large firms.

The country has failed to generate a labour force with job-shop skills mainly because these are treated as informal or inferior. Similarly, the country’s education institutions have failed to produce competent technicians, supervisors and foremen with batch production skills. The concept of apprenticeships and work-based learning is conspicuous by its absence in the curricula of Indian institutions. There is no respect for vocational or craft pathways.

Consequently, there are too many graduates for too few process jobs, too few skilled workers for labour-absorbing jobs. More importantly, there is a ‘missing middle’ of  enterprises and skills.

• Too many graduates for too few process jobs.
• Too few skilled workers for labour-absorbing sectors.
• A “missing middle” of enterprises and skills.

Expectations from Indian Education Institutions

The nature and type of skills that are required demand different approaches at various levels.

School level

• Introduce work education in a pragmatic manner and not token crafts.
• Exposure to tools, repair, farming systems, logistics.
• Build respect for skill and work, not just degrees. This has been a major challenge with dignity of labour not finding its rightful place in Indian society. Parents and students are obsessed with white collar jobs.

Secondary / ITI level

• Strong apprenticeship-linked vocational education.
• Local industry-linked curricula.
• Certification of job-shop and batch skills.
• Modular, stackable skill credentials.

College level

• Separate tracks need to be formulated and implemented for:
  • Practice-based technical degrees.
  • Management for MSMEs.
• Mandatory shop-floor exposure to ensure hands-on training.
• Encouraging small manufacturing and service entrepreneurship.

Universities

• Indian universities need to focus on:
  • Process production.
  • R&D.
  • Systems engineering.
• Universities should support innovation ecosystems that connect downwards to MSMEs.

Industry-Academia Collaboration

There is a need for a paradigm shift in the Industry’s approach toward nation-building. Instead of being just a passive consumer of skills, focussing on productivity and profit-generation, it should not only facilitate but also participate in:

• Co-design curricula with institutions. At present the Industry and academia are working in separate silos. The requirement is to create synergy to promote national interests.
• Offer paid apprenticeships to students.
• Share machinery, workshops, and provide mentors to students and faculty.
• Support cluster-based training in different sectors like textiles, food processing, auto parts, agri-services.
• Recognise and reward technicians and supervisors, not only engineers.
• Invest in supplier development, not just automation.

Interestingly, countries like Germany, Japan, and South Korea have created jobs by adopting this approach and not by leapfrogging from artisanal level to process level.

The Role of Policy-Planners in Employment Generation

India’s policy-planners need to rebalance national level production strategies. Instead of privileging only large, capital-intensive projects they should encourage job-shops and batch enterprises to grow organically and promote cluster-based industrialisation.

Labour-absorbing sectors could be incentivised through tax, credit and compliance relief for MSMEs. Further, differential incentives could be provided through favouring employment intensity.

There is a need to reform education policy by emphasising skill development. As a deliberate policy measure, apprenticeship should become the default pathway. Further, craft and technician careers should get recognition through certifications. In short, the policies should aim to integrate education, skilling, functioning of MSMEs and industrial policy.

Further, Job-shops and batch systems are waiting to be activated to give boost to agriculture-linked employment. Policies should encourage local processing, storage, repair services, logistics and agri-inputs and machinery services.

Conclusion

India’s GDP is growing at a fast pace and the country is poised to become the third largest economy in the world. However, lack of suitable employment opportunities is having an adverse effect on the per capita GDP growth and that is among the lowest in the world.

India hasn’t failed to grow – it has failed to sequence its growth. By jumping straight to process production, it lost the employment dividend of job-shops and batch systems and weakened skill formation. That has created inequality between capital and labour which is not conducive to national growth. The solution is growth with the right production ladder beneath it.