However, the “Indian Technology News” of March 23rd 2017 quoting RBI data, reported that FDI inflows for the manufacturing sector, reduced to $ 8.44 Billion, from 9.61 Billion, the previous year, a range of 35-40% for the past four years, dropping to 23 per cent in 2015-16. This probably is a pointer to rethink and invigorate the internal systems towards the campaign, in ways that may not have been explored thus far.
The economy of India is the seventh-largest in the world, measured by nominal GDP and the third-largest by purchasing power parity (PPP). However a population of about 1.311 billion, can cut both ways that includes a subset that is below 25 years, occupying more than half that space, skilled and not gainfully employed, would be a predicament that the country would do well, to not have.
The primary sector of the economy makes direct use of natural resources. This includes agriculture, forestry, fishing and mining. In contrast, the secondary sector produces manufactured goods, and the tertiary sector provides services. In terms of employment potential and job creation, the primary markets account for about 15%, the secondary about 35% and the tertiary, about 50 per cent.
A report by industry body CII, notes that for the primary economy, a vibrant mining sector is essential that can spur growth and add up to US$ 70 billion to the country’s economy as well as generate 60-70 lakh jobs. The report “Mining Opportunities-Realising Potential” further stresses on dealing with clearances where it observes “still remain an impediment for a smooth transition from auction stage to implementation stage”.
The government, in the last two years, seems to have taken some important steps for mitigating the torpidity in the sector. A major step is the enactment of Mines and Minerals Development and Regulation Act, 2015, which has made the process of allocation of mines transparent by introducing auctions. The downstream activities and the regulations that bind them also need to be reworked, for job markets to thrive in this sector.
India is expected to become the fifth largest manufacturing country in the world by the end of year 2020, a big boost for the secondary economy to flourish. The Government of India, on its part has set an ambitious target of increasing the contribution of manufacturing output to 25 per cent of Gross Domestic Product (GDP) by 2025, from 16 per cent currently. India’s manufacturing sector has the potential to touch US$ 1 trillion by 2025, accounting for 25-30 per cent of the country’s GDP and create up to 90 million domestic jobs by 2025.
India’s tertiary sector, IT and ITES in the main, has been one of the fastest growing service sectors in the world with annual growth rate of above 9% since 2001, which contributed to 57% of GDP in 2012-13. India was a major exporter of IT services, BPO services, and software services with US$167.0 billion worth of service exports in 2013-14. Though this sector could grow further, it is to be seen how disruptions like automation, assisted by artificial intelligence, would affect future job roles, GDP and even job numbers.
The Indian MSME sector has been the backbone of the economy providing it substance and meat for many decades now. A great deal of modernisation of the sector is called for, along with structural changes in the regulatory provisions. Part of this was seen in the current year budget and we hope to see a lot more in future. An associated CII report on MSME notes that “with around 51.1 million units throughout the geographical expanse of the country, MSMEs contribute around 7% of the manufacturing GDP and 31% of the GDP from service activities as well as 37% of India’s manufacturing output. They have been able to provide employment to around 120 million persons and contribute around 46% of the overall exports from India”
India is also the third largest start-up hub in the world with over 3,100 technology start-ups in 2014-15. Neil Patel, in Forbes monthly, says that at least 90% of start-ups fail. How to raise the success rate, would be a real concern. Entrepreneurship in India is community based and though the new generation is actively considering the cross over, a phenomenal change in attitudes and perceptions would be needed. Changing business logic, disruptive markets, dynamic supply chains have only queered the pitch. Several challenges remain, like starting a new business requiring 13 procedures and 33 days, dealing with licenses taking 20 procedures and 224 days, registering a property needing 6 procedures and 62 days, enforcing contracts taking 46 procedures and 1420 days and finally, closing a business taking 10 years with a recovery rate of 11.6%.
Most certainly, all interventions of the government have brought a positive outlook to the entire sector and economy putting it firmly on a growth path. Are these sufficient for new job markets to evolve Will they suffice to sustain the growth paradigm? Are any systemic changes required to bolster the government’s vision? Why is the education sector conspicuously absent from this discourse Can the education / research / innovation ecosystem be mapped to this vision? A long term perspective would probably say yes. Let’s look at some sustainable initiatives.
Sustainability in the employment sector, driven by “Make in India” as a growth vehicle and seamlessly integrating education is the key. Though a lot of funding has been made to our premier institutions for research and development, it could always have been better. The process does aid in an incremental addition to the body of knowledge, but do they help in job creation and does this paradigm need to be revisited are all important questions.
Thousands of Phd’s per annum are needed, but with mandated research that helps the Industry deliver. Productization which is almost absent currently, has to be given the pole position. A clear mandate of research for the CSIR/DRDO labs, IITs and others must be innovation centric that aids in job creation. IPR – Patent – Entrepreneurship cells in every one of the above institutions needs to be developed which adds to the research potential, and connects with the National agenda. Promotion of niche technology areas like oil exploration, mining, agriculture, power, water resources and infrastructure should be high on priority and should receive the best of funds.
Promoting sustainable development for environment, climate change and protection through innovation in energy, bio sciences, bio engineering and genetics needs to be the next level of priority. The innovations should drive several downstream activities in each of the areas mentioned. 100 model cities to come up under the aegis of the central government is a master stroke for revving up the infrastructure sector growth and fuel new job markets. This in turn will rev up the skills market.
Several start-ups can be promoted through the best of our educational institutions. eg., roof-top farming, food processing technologies, food packaging technologies, water treatment plants for drinking water in food and beverages sector, home decor products, kitchenware, bed and bath in the home based sector, setting-up medical clinics, promoting drug development industry, medical devices/equipment, scanning and testing labs, development of disease specific herbal products, in the health sector, vocational institutes, programs to train teachers, institutionalizing skills, medical technicians, courses in upcoming fields of genetics, nanotechnologies in the education sector, waste management, solar and wind technologies, temperature controlled warehouses, air and noise pollution control technologies, towing trucks, automated parking lot technologies etc in the infrastructure sector and so on and so forth.
A “Make in India” specific blue print must be researched, developed and nurtured for sustainability. Defense, Infrastructure, Railways and Agriculture the four cardinals, must be the prime focus areas for this and the German experience will surely stand us in good stead. A huge network of premier institutions like IIT’s in education, in research like CSIR/DRDO labs, the EME workshops and several others in niche areas operate in India without a real binding and bonding amongst them. Any equipment either for home or for defense, be it a washing machine or a fighter aircraft, is supremely inter and multi-disciplinary in nature. A systems approach could then be used for promoting productization.
Four to five new “Innovation for Productization, IFP” institutions setup in major cities around industrial hubs could be the fulcrum around which the “Make in India” blue print could be executed. The IFPI, first in the supply chain could disaggregate the subsystems of a Combat Recovery Vehicle (CRV), an example in the defence sector, and discretise them into mechanical, electrical, control, instrumentation and other sub systems, broadly establishing each of them in those sub groups. Several other existing Institutions could be handpicked by IFPI, for their subject expertise, in areas of subsystems and specific targets assigned for developing prototypes of such subsystems.
The supply chain, would now be associated with area specific industry partners for prototype developments. The supply chain would further grow with research laboratories like that of the CSIR or the DRDO or the EME workshops and small industry partners along the way. All prototypes will then be aggregated by the IFPI to build the targeted assignment, against strict time lines with purposeful collaborations, with best in the world like CSU, MIT, Stanford, Imperial College, Humboldt University, Helmholtz association and such others, which can foster innovation. The IFPI would develop several other related products and accessories at various stages of the supply chain, thus creating new job markets and new skill requirements. IFPI could eminently support all four afore said key areas.
A serious attempt will be needed to create Fraunhofer-Gesellschaftlike research centres around the IFPI in a few chosen cities in India. This would give a great fillip to focussed research that aims at self-reliance, promotes productization and process improvements and consequent job creation in all three primary, secondary and tertiary employment markets.
An egalitarian society can lead a resurgent nation if it is focussed on social reform, economic growth of the downtrodden and protection of cultural diversity. This is truly possible, only when every child in the country is educated and eventually finds a meaningful job leading the country to an unparalleled self-belief.
(Opinion piece by Dr. S.S. Mantha, Former Chairman of AICTE and present Adjunct Professor at NIAS, Bangalore)
Source: Business World