Not Enough Jobs Talking Business


Not Enough Jobs

Yogita Limaye hears from entrepreneurs and employers in Bangalore about the challenges of job creation in the country with the world's fastest growing workforce - India.


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Transcript


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responsible for the United Kingdom's policy on refugees.

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Stars from around the world have been paying tribute

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to the actor Sir John Hurt, who has died at the age of 77.

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Star of stage, TV and small screen, he was best known for roles

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in The Elephant Man, Alien and Harry Potter.

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Now on BBC News it's time for Talking Business.

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Rapidly growing economies - among them India - face a problem.

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Millions of people are joining the workforce every year,

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but with financial pressures and automation there just aren't

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So what can be done to generate more employment?

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That's what we're discussing on this week's Talking Business.

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India is the fastest-growing major economy in the world,

:00:48.:00:52.

yet it's among the slowest in creating jobs.

:00:53.:00:54.

This country is growing at a rate of 7.6%.

:00:55.:00:56.

The growth in the number of jobs being created is just

:00:57.:00:59.

a fraction of that at 1.4%, and the rate at which people

:01:00.:01:03.

are coming onto the employment market is almost double that number.

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It is estimated India will need 10 million jobs every year in order

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to employ a growing pool of young people without career prospects.

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And advances in technology and automation could mean more bad news.

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The technology is definitely going to disrupt the jobs

:01:31.:01:32.

We would have to work every day to make it happen.

:01:33.:01:37.

We have seen this massive movement, and when we worked with a lot

:01:38.:01:42.

of the companies we have been able to reduce 2000 people, 3000 people,

:01:43.:01:45.

all in their back end, and completely replace them

:01:46.:01:48.

with artificial intelligence solutions.

:01:49.:01:49.

One is an artificial intelligence experience within the store.

:01:50.:01:54.

From the minute someone walks into a store, rather than having

:01:55.:01:57.

a typical person greet him, explain the product of them,

:01:58.:01:59.

sign him up, things like that, it will all be done

:02:00.:02:02.

by an artificial intelligence screen.

:02:03.:02:12.

We've built a chatbot which can communicate with customers,

:02:13.:02:17.

so whenever you log a ticket or a query with the website

:02:18.:02:20.

saying that my cheque-book has not yet come in,

:02:21.:02:22.

now instead of a person being at the other end

:02:23.:02:25.

who will understand your query then figure out what to do,

:02:26.:02:27.

it is an artificial intelligence engine.

:02:28.:02:29.

That whole replacement is going to really change the way

:02:30.:02:31.

people are hiring now and the numbers there are hiring.

:02:32.:02:35.

You may see by 2020, I think, 100% automation

:02:36.:02:37.

Things like opening an account, signing up for insurance,

:02:38.:02:42.

all these things which required human checks and validations can

:02:43.:02:47.

So how bad is the situation actually on the ground when it

:02:48.:02:52.

Well, to discuss that we've brought together a panel of guests -

:02:53.:03:01.

Manish Sabharwal, chairman of recruitment firm Teamlease,

:03:02.:03:12.

Kiran Mazumdar-Shaw, chairperson of biopharmaceutical

:03:13.:03:13.

company Biocon, and Mr Dilpreet Singh, who is the vice president

:03:14.:03:16.

of human resources at IBM India and South Asia.

:03:17.:03:21.

Thanks very much for being here with us today.

:03:22.:03:23.

So how bad is the situation actually?

:03:24.:03:26.

Well, I think actually, you know, there is a huge

:03:27.:03:29.

I think jobs growth is something that every economy is facing,

:03:30.:03:32.

India of course has seen that it has been a pretty tough uphill task

:03:33.:03:37.

In the last two decades we have seen 300 million people come

:03:38.:03:41.

into the job market, and less than half of them, maybe

:03:42.:03:44.

And I think this number is steadily declining, so it is...

:03:45.:03:47.

And the population is increasing, so you can see

:03:48.:03:50.

Mr Singh, your sector - IT - and if you look more broadly,

:03:51.:03:59.

services, has been a big employment generator in India.

:04:00.:04:01.

In the past four or five years, do you think that

:04:02.:04:04.

It has definitely been creating less jobs in 2015 compared to what it was

:04:05.:04:25.

error there, so overall I think -- what it was earlier. Overall it is

:04:26.:04:30.

about the number of jobs created for the GDP, the rate of job growth, and

:04:31.:04:33.

for India that has been declining. Also I think in the last decade we

:04:34.:04:38.

have had lower growth than compared to the global average so, yes, we do

:04:39.:04:42.

have a problem. I think you have to be careful with technology. When you

:04:43.:04:47.

asked this question, you said, IT has created a lot of jobs. But there

:04:48.:04:52.

is rounding error in India's River Fosse. It pays high salaries and we

:04:53.:04:57.

are proud of them for that but we do not really give a dam about them

:04:58.:05:00.

from a labour market perspective -- in India's GDP. 3 million is a

:05:01.:05:11.

rounding error... What is creating jobs in India? Services. India's

:05:12.:05:21.

farm to non-farm transitions is happening to sales, customer

:05:22.:05:24.

services, logistics, the fastest-growing segment of India's

:05:25.:05:29.

market. India is consumption driven -- domestic driven economy. We do

:05:30.:05:35.

not have the same global manufacturing opportunity China had

:05:36.:05:39.

in 1978. I do not think that is a good thing. I wish we had the same

:05:40.:05:46.

openness to trade and global chances China had for 30 years. India does

:05:47.:05:50.

not have that, so our trajectory of our job market may be more domestic

:05:51.:05:55.

consumption than export and manufacturing. So you do not agree

:05:56.:06:01.

that, you know, there are statistics which show our unemployment rate is

:06:02.:06:04.

going quite slowly compared to the country in general? Remark I

:06:05.:06:09.

disagree with that. You have added 200 million people to the labour

:06:10.:06:12.

force in the last 20 years and they have been absorbed somewhere. The

:06:13.:06:16.

jobs problem is not jobs. It is formal jobs, good jobs. I think he

:06:17.:06:23.

makes a point. If you would get the job market, yes, 50% is

:06:24.:06:28.

self-employed and 30% is casual and 20% is formal employment. So I think

:06:29.:06:32.

he makes a point of saying that the biggest problem we have is in this

:06:33.:06:38.

50 and 30% category where people probably earn less than 10,000

:06:39.:06:41.

rupees a month, you know. And I think we have a big need to keep

:06:42.:06:47.

jobs -- take jobs away from the farm and really take it out of the farm

:06:48.:06:51.

and into the services sector, into the sales sector, as he calls it. So

:06:52.:06:56.

I do agree in that respect with him that, yes, perhaps India's challenge

:06:57.:07:00.

and India's job challenge is slightly different to what you would

:07:01.:07:05.

actually discussed in other parts of the world especially in developed

:07:06.:07:08.

economies. I will slightly diverse year but everywhere I read the

:07:09.:07:11.

country when I travel, every business owner I meet, we speak

:07:12.:07:15.

about there being not enough employment generated -- everywhere

:07:16.:07:20.

around the country. But he says he is struggling to find labour, that

:07:21.:07:23.

there is this huge employability problem. Is there something you see?

:07:24.:07:29.

90,000 kids come to us for a job every month and we hire about 5000

:07:30.:07:39.

of them -- 90,000 kids. But it is a more complicated problem. It is also

:07:40.:07:45.

the lack of organisation. The jobs are being created in 50 cities but

:07:46.:07:49.

we have 600,000 villagers, and 200,000 of them have less than 200

:07:50.:07:53.

people. So the physical geography of work... Do you take jobs to people

:07:54.:08:00.

or people to jobs? It is also becoming a constraint for India. You

:08:01.:08:03.

read one of the leading bio pharmaceutical firms in the world.

:08:04.:08:08.

-- lead one off. How difficult is it for you to find people to give jobs

:08:09.:08:11.

to? That is the challenge in most industries because we want to scale

:08:12.:08:16.

up, attain global scale, and to do that you need those high-end skills

:08:17.:08:21.

in large numbers otherwise you just find it is a very small talent pool

:08:22.:08:27.

being tapped into by everybody, and therefore you're not really able to

:08:28.:08:31.

scale of the sector. Whilst individual companies can scale up,

:08:32.:08:35.

the sector does not, and you need to scale up that sector. So I think

:08:36.:08:39.

from that point of view you really need to focus on developing this

:08:40.:08:42.

large talent pool required to support such a large sector, and

:08:43.:08:47.

that is what I think India needs to do. And, you know, talking about

:08:48.:08:55.

that, only 20% formal employment in our country. What do you think needs

:08:56.:08:58.

to change for that to change, for that number to grow? For us to

:08:59.:09:05.

unleash the growth of jobs I think each of the various arms of the

:09:06.:09:11.

government body, or the biggest parts of the government body, have

:09:12.:09:14.

to really work in sync, because to me that is extremely important.

:09:15.:09:19.

Because if that is not there, you know, it will not happen. To give an

:09:20.:09:24.

example, if you were to have highly skilled people available, and you

:09:25.:09:30.

were able to do that, but if our banking is not supporting

:09:31.:09:35.

entrepreneurs to come into play, and even if the banking is supportive

:09:36.:09:39.

but the labour lows are very restrictive, right, then it will not

:09:40.:09:44.

happen, so I think it is a systems approach required if we really want

:09:45.:09:50.

to take up and grow the jobs here. Formalisation is just... It is not

:09:51.:09:58.

cultural. India is a hot habitat for intracoronary rail ownership and we

:09:59.:10:02.

have 63 million enterprises, and 12 million of them do not have an

:10:03.:10:07.

office, 12 million work from home. Only 8.5 million enterprises have

:10:08.:10:10.

any tax registration. Only 1 million are companies, but there are only

:10:11.:10:15.

18,000 companies in India with a paid-up capital of more than $1.5

:10:16.:10:20.

million. So that means nothing. But there is nothing cultural about

:10:21.:10:24.

this. I resent it when people go on about Indian informality. At best,

:10:25.:10:36.

that is the soft bigotry of low expectations and at worst it is

:10:37.:10:38.

racism. There is nothing informal about it. If you fix the regulatory

:10:39.:10:41.

cholesterol formality could go from 20% to 80% of the labour force,

:10:42.:10:43.

which is what they were attempting to do, but there will be lots of

:10:44.:10:50.

other initiatives over the next hopefully 2-3 years. What

:10:51.:10:54.

specifically do you want to see change? If we can deregulate and

:10:55.:10:59.

actually free up these new emerging industrial opportunities like

:11:00.:11:04.

e-commerce, I think you can create a large number of jobs. Companies like

:11:05.:11:13.

Uber, between them, they have created a million driver jobs, no

:11:14.:11:16.

mean feat. Although they are having a tough time with every state

:11:17.:11:21.

government wanting to rain them in. And the same is true of various

:11:22.:11:25.

e-commerce companies were again the kind of regulations are stifling

:11:26.:11:33.

them. Overall, what are we seeing? Entrepreneur, the investor, or the

:11:34.:11:35.

organisation should have the flexibility of being able to take

:11:36.:11:40.

the risk of starting the organisation -- what we saying? And

:11:41.:11:43.

if it is not going well they should be able to let somebody go to Harry

:11:44.:11:48.

later, or for example the flexibility of the labour lows will

:11:49.:11:52.

encourage organisations to adopt automation, more productive -- to

:11:53.:11:58.

hire them later. And that is more productive because it generates cash

:11:59.:12:01.

and when you have that you can reinvest into different areas to

:12:02.:12:05.

create more jobs. Mr XXX, thank you for being with us. Important to have

:12:06.:12:09.

a view from the IT sector, which India is known for globally -- Mr

:12:10.:12:15.

Singh. In the second part we will be discussing, what are the jobs of the

:12:16.:12:20.

future? But first, here is our comedy consultant with his thoughts

:12:21.:12:26.

on this week's Talking Point. I am here at Dublin city University's

:12:27.:12:31.

innovation lab, in an empty office soon to be occupied by innovative

:12:32.:12:34.

companies, and I am thinking about jobs of the future. Predicting the

:12:35.:12:44.

future is a mug's game. In fact we do not even know if there will be

:12:45.:12:51.

mugs, as they will probably be disrupted by some new receptacle. In

:12:52.:12:55.

the future, whatever happens, billions of people will arrive on

:12:56.:12:57.

planet Earth and they will need something to do to occupy their

:12:58.:13:01.

time. The question is what are the future jobs? There is nothing like

:13:02.:13:06.

being in a big empty office to concentrate the mind on what jobs

:13:07.:13:09.

might be like in the future. This is like a blank sheet of paper. The

:13:10.:13:14.

possibilities are endless. The challenge of an empty office is how

:13:15.:13:18.

to fill it with jobs, and what are those jobs going to be? Right,

:13:19.:13:26.

that's enough speculation from me. Let's top to the people who are

:13:27.:13:33.

thinking properly about future jobs. -- let's talk. The people training

:13:34.:13:41.

the next generation. This is what they call the fourth technological

:13:42.:13:45.

revolution, a combination of different technologies such as ICT,

:13:46.:13:52.

microelectronics, Nano Electronics, all coming together in a convergent

:13:53.:13:56.

way to provide new products and services, and there are skilled

:13:57.:14:01.

needs and requirements there for people having these new combinations

:14:02.:14:07.

of skill sets. Thinking about the future, it is also important to keep

:14:08.:14:15.

an ion the past. The miners, farmers and weavers of previous centuries

:14:16.:14:19.

have gradually been replaced by the marketing technicians, the product

:14:20.:14:22.

evangelists, and the strategic enablers of the present. But the

:14:23.:14:27.

march of time is inevitable, and change will continue. When you speak

:14:28.:14:33.

about new jobs, a lot of new jobs are actually evolutions of existing

:14:34.:14:38.

jobs or professions. The salesperson's roll and job is

:14:39.:14:42.

definitely evolving. Maybe we think it will be ten years from now, but

:14:43.:14:47.

many companies will struggle to just sell a product. I think the product

:14:48.:14:50.

is just a feature that delivers a benefit, and you need to be able to

:14:51.:14:53.

share in the cost of the features and also share in the upside of the

:14:54.:14:58.

benefits. We see our salespeople now as originators of deal flows and

:14:59.:15:04.

allocators of our firm's capital, and that is a vastly different way

:15:05.:15:09.

of looking at a sales position than you will get at, say, a traditional

:15:10.:15:14.

lighting firm. So on reflection it seems there is no time like the

:15:15.:15:18.

present to prepare for the jobs of the future... You can watch more of

:15:19.:15:31.

his films at bbc.com/talkingbusines. We will continue our discussion

:15:32.:15:38.

here. We are also joined by the co-founder of an online grocery

:15:39.:15:41.

delivery service. Thank you very much for being with us. I will start

:15:42.:15:47.

with you. Almost 70% of jobs in India are said to be at risk because

:15:48.:15:52.

of changes in technology. Is that something you agree with, something

:15:53.:15:58.

you are seeing on the ground? Actually I have a very myopic view

:15:59.:16:02.

because our problems are usually the other way round. We think we are

:16:03.:16:05.

creating a lot of jobs but we are not finding the right kind of people

:16:06.:16:11.

for those jobs and for us that happens at both levels, the tech

:16:12.:16:14.

level where we are trying to hire good engineers, but also on the

:16:15.:16:18.

supply level. They are helping us think a lot of people that are doing

:16:19.:16:24.

the jobs in our warehouses, for delivery, and I think a lot of the

:16:25.:16:27.

discussion happening is still relevant to us where I think we are

:16:28.:16:31.

not finding the right people for the right jobs. But I also think, moving

:16:32.:16:38.

forward, we will not see that much job contraction because of

:16:39.:16:41.

automation. I think we will see a lot more jobs created before we

:16:42.:16:46.

start losing them. With automation. Technology always poses the

:16:47.:16:53.

perceived threat of displacing jobs or shedding jobs, and actually

:16:54.:16:56.

history has shown that technology does not do that. Actually

:16:57.:17:00.

technology creates new kinds of jobs, so, you know, I think I agree

:17:01.:17:06.

with what Albinder is saying. I think it is basically about

:17:07.:17:10.

displacing certain types of jobs but creating new ones. I think that is

:17:11.:17:14.

what we should look at, so I think India has a very different kind of

:17:15.:17:17.

opportunity in terms of technology and how it is going to create a

:17:18.:17:22.

larger number of jobs than what you think will happen with automation

:17:23.:17:27.

and new technologies. Which will possibly shed and reduce jobs in

:17:28.:17:32.

other parts of the world which have highly developed logistics and

:17:33.:17:35.

supply chains, unlike India, so I think here you will see a different

:17:36.:17:41.

kind of effect. You know, you started a start up here in India. Do

:17:42.:17:49.

you think that is creating that sector... That sector is creating a

:17:50.:17:54.

lot of jobs? Four years ago we were nonexistent and now we employ 2000

:17:55.:17:58.

people. I think that is job creation but if you look at the life cycle of

:17:59.:18:04.

a company, the start-ups also die in this country because of different

:18:05.:18:07.

factors. Three and a half years ago we went to a bank, we were

:18:08.:18:11.

profitable small company and asked for alone to buy a cargo hold and we

:18:12.:18:18.

were denied because they said the company needs to be two years or

:18:19.:18:21.

older and that was one of those points where we thought, how do we

:18:22.:18:25.

scale up from there? I had to borrow the money from my dad to buy a

:18:26.:18:29.

second-hand car. So there is no support. I think there can be and

:18:30.:18:36.

huge employment generator. A lot of people in the start-up sector have

:18:37.:18:39.

already built companies, examples of that that have gone on to create

:18:40.:18:42.

thousands and thousands of jobs, and I think we can have it but we need

:18:43.:18:46.

to make sure the smaller companies survive. There needs to be an

:18:47.:18:49.

environment for them to be nurtured and moved to the next stage where

:18:50.:18:53.

they can be significant employment generators. On the one hand we talk

:18:54.:18:57.

about the fact we are not generating enough employment but everywhere I

:18:58.:19:00.

have gone across the country, and I met business owners always

:19:01.:19:03.

complaining about the fact they cannot find enough workers. I

:19:04.:19:07.

totally agree. A lot has to do with regulation. I think a lot also has

:19:08.:19:12.

to do with more social logical change. Especially with the cities,

:19:13.:19:17.

where the early urbanisation is happening, we see a lot more

:19:18.:19:20.

formalisation of the economy happening in the bigger cities. But

:19:21.:19:24.

at the moment we need to set up warehouse in second-tier city, or

:19:25.:19:33.

people to work as package boys are delivery boys, big chunk of women

:19:34.:19:37.

workers with degrees who do not want to do anything outside the house...

:19:38.:19:41.

Even a lot of educated men would prefer to sit at home and not do

:19:42.:19:47.

anything because they are not really dealing with the pressure of earning

:19:48.:19:52.

a wage everyday, so we don't end up finding a lot of workers there. Is

:19:53.:19:56.

there any prediction you can make at all as to which Indian jobs are

:19:57.:20:01.

safe... Future proof? Let's not try to predict where jobs will be, but

:20:02.:20:06.

let's try to make India self-healing. Reduce regulatory

:20:07.:20:09.

cholesterol and improve human capital. It is's came to predict

:20:10.:20:15.

where the jobs will be. Make the job market and education system

:20:16.:20:18.

self-healing, because India's scale is something no country in the world

:20:19.:20:21.

has faced before. I still believe there are many technology jobs that

:20:22.:20:28.

are future proof. I think software, for example, but it is a very small

:20:29.:20:32.

part of the job. If you want to look at future proofing, I think these

:20:33.:20:35.

are the kind of jobs that will always be in demand, but then having

:20:36.:20:40.

said that, you know, there are many other opportunities for a country

:20:41.:20:44.

like India, and what do you define as the future? For India I think we

:20:45.:20:49.

can sort of sustained job growth, probably for the next 20-25 years

:20:50.:20:56.

without a problem, but is that the future you are speaking about? You

:20:57.:20:58.

really cannot predict beyond that, because you really do not know what

:20:59.:21:02.

it is going to look like in terms of the job market and job

:21:03.:21:05.

opportunities, but future proofing India for the next 20 years is

:21:06.:21:09.

extremely important, and I think this is where a lot of these jobs

:21:10.:21:14.

being spoken about will come from. And we need to basically strengthen

:21:15.:21:19.

that system to enable it. As someone who is part of that new sector

:21:20.:21:24.

coming up, the new online enables sector, if I may call it that, what,

:21:25.:21:28.

according to you, are the jobs of the future? Do you see different

:21:29.:21:33.

jobs of the future? Actually I think my view would be that the future

:21:34.:21:36.

proofed jobs are probably more in the food sector than in technology

:21:37.:21:42.

so far. And that scale much bigger in food because we need to produce

:21:43.:21:45.

food for a lot of people and we see that as a sort of broken supply

:21:46.:21:50.

chain, our farms are broken, the supply chain is broken, we waste a

:21:51.:21:53.

lot of that and have a lot of hungry people. So I think jobs in that

:21:54.:21:57.

sector will always be there. E-commerce, we will see how the next

:21:58.:22:01.

five years player, whether we are significant enough or not in the

:22:02.:22:08.

end. But clearly the three industries, education, health care,

:22:09.:22:12.

construction. And sales, customer service and logistics. If you divide

:22:13.:22:15.

it functionally that will be across many industries, and just given

:22:16.:22:21.

health care, education, construction, they will employ away

:22:22.:22:26.

smaller number in India today than they well. That is it from this

:22:27.:22:31.

edition of Talking Business in Bangalore. Do join us again next

:22:32.:22:33.

week. It is turning milder across the UK

:22:34.:22:56.

but it will be a slow process. Northern parts of the country, not

:22:57.:22:59.

the mild. In fact it

:23:00.:23:00.