Almost 11 million Indians lost their jobs during 2018, a report by the Centre for Monitoring Indian Economy (CMIE) said recently. The future of work is discussed extensively in this national context in India, but also lies at the core of its relations with the world.
Various government schemes under the umbrella of “Make in India” such as the Pradhan Mantri Kaushal Vikas Yojana have been designed to attract foreign and domestic investors and boost employment growth. However, to make these campaigns more effective and to shape the economy of the future, we must first mould the debate that informs it.
The analyses of the future of work in India by EY, McKinsey and other leading management consultancies presume that “in the context of globalization, disruptions (are) caused by exponential technologies.” These loosely defined changes of digital transformation, often clubbed together as Industry 4.0, are seen as an “inevitable” outcome in a world becoming more connected. They contain predictions about how transformation occurs, providing advice for policy reactions.
However, we should take a step back and talk about agency before talking about actions. It is vague to build the future of jobs in India on prophecies about the direction of ominous forces of globalisation without understanding their cause and direction. In short, three questions arise. Who have been the actors of the process so far? How can India recognise and modulate its own role? And who should be the beneficiaries?
Looking Back to Move Ahead
The term Industry 4.0 was used for the first time by the German government in 2011 to launch a nationwide campaign boosting technical research. Since then it is used to describe a general trend postulating that the world is entering a new era of production with the ‘Internet of Things’ at its core, able to manage itself without much human capital needed at the shop floor level. But first, can the development of industrial production be described as a linear process anyway?
Since the 1960s, economic research has moved away from Rostow’s famous model of “stages of growth”, where the US assembly-line work type was characterised as the most advanced and ultimate model of production that all other nations would eventually converge to. However, we now know that this is not the case. With the diversification of modes of production, multiple ways to produce coexist.
Counterintuitive as it may seem, modern modes of production often depend on more traditional forms. For example, the Indian textile sector has in fact seen an overall decline in machine inputs since the late 1960s. This is made apparent by the historic closure of almost all 80 mills in Bombay starting in 1970 and its gradual transformation favouring sweatshop production under more informal labour conditions. Learning from this key sector’s history helps understand the structural parallelism of different production methods nationally, and globally.
Secondly, it is important to note that the Industry 4.0 idea was not borne out of scientific research analysing changes in Germany’s manufacturing, but it was a government image campaign, wanting to boost certain innovations and lay out a prescriptive pathway. It was thus a deliberate process of active intervention rather than a reaction to “inevitable” changes happening on their own.
This context is important because it shows that states play a much more important role than usually recognised in deciding global agendas such as Industry 4.0. According to the IMF, India’s economy in nominal GDP terms will become larger than Germany’s within the next three to four years. This should be reason enough for India to actively collaborate to shape the future of the world economy and labour markets, rather than being at the receiving end of policies decided elsewhere.
The Way Forward
Work and workers’ welfare belong together. This has been recognised by the founders of the independent Indian state when “The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may” (Article 39) has been enshrined in the Constitution. Under this preamble, welfare legislation had been one of the largest legal projects after 1947, such as the initiation of the Minimum Wages Act in 1948 or the Employee’s State Insurance Scheme in the same year. Unfortunately, these laws have rarely been revised ever since then and new laws like the Unorganised Workers’ Social Security Act 2008 have been added without much realignment of existing regulations.
When India became independent, the economic status of its people changed from colonial subjects to citizenship of an independent state. Just like in 1947, the Indian government should recognise that the time has come for granting greater agency to its people. By decentralising control over technologies and making them available on a larger scale, greater potential of entrepreneurship, agency and autonomy can be realised. This means that even if labour intensity on a macro scale of manufacturing would be reduced, the benefits of these processes can be shared by more people than before. Furthermore, the transfer of resources would increase security of workers in times of high flexibility of production.
Therefore, technology, boosting the labour market and welfare do not have to be mutually exclusive goals, but instead can be complementary. India is well placed to set an example and become a driving force of change due to its demographic dividend. Creating an environment of fair production means leveraging that dividend and investing in the future of jobs, for the benefit of everyone. The world needs India to be active in shaping the future of the global economy.