The Future of Work in

India - Literature Review

26, October, 2018 | New Delhi

By: Harsh Bajpai

Edited by: Elonnai Hickok
Research Assistant: Roshni Ranganathan and Siddharth Ray
The Centre for Internet and Society, India

Designed by Saumyaa Naidu

Shared under
Creative Commons Attribution 4.0 International license
TABLE OF CONTENTS

Introduction
Regional Perspective
Meaning of Industry 4.0
Key Technologies within Industry 4.0
Key factors influencing technology Implementation
Key barriers to technology adoption

Impact of Industry 4.0 on Labour

Key Sectors Likely to be impacted
Adoption of Industry 4.0 leading to Job Creation/Job Loss
Automation changing the nature of work

Policy Response to Future of Work

Recommendations
INTRODUCTION
India needs 8% growth over the next 20 to 30 years to grow the Indian economy from a
lower-middle income country to an upper-middle income country. Implicit in this aspiration
is also the need to create 12-15 million jobs each year.1 There is a shift from agriculture to
manufacturing and services sector and there is a rising middle class which is pushing
domestic demand.2 Three ongoing mega-trends have the potential of significantly altering the
nature of work in all G20 countries, albeit with a different intensity: globalisation,
technological progress and demographic change - as well as the changes in values and
preferences that will go paired with them.3 Together, these trends are likely to affect the
quantity and quality of jobs that are available, as well as how and by whom they will be
carried out.

In both the first Industrial Revolution and today‘s Fourth Industrial Revolution, the first
effects were in manufacturing in the developed world. The manufacturing productivity of
U.S., roughly doubled between 1995 and 2015. Today, its output is at an all-time high. As a
result, employment peaked in 1980 and declining precipitously since 1995.4 As automation
finds its way to developing countries as well, more than two-thirds of Southeast Asia‘s textile
and footwear jobs are threatened by automation. In addition to spreading across the world, the
effects of automation are also being felt by accountants, lawyers, truckers and even
construction workers.5

In the low and medium qualification sectors, primarily, several million jobs worldwide are
under threat, and it is not at all certain that they can be regrouped to other areas. There may
not be employment opportunities in other sectors for these employees because they lack
sufficient training. Owing to the introduction of ever more new machines and intelligent IT

1
Citi GPS: Global Perspectives and Solutions, “Securing India’s growth over next decade: Twin Pillars
of Investment and Productivity”, February 2018.
2
UNCTAD, “The Least Developed Countries Report 2015: Transforming Rural Economies”,
UNCTAD/LDC/2015, New York and Geneva, 2015.
3
OECD, “Future of Work and Skills”, 2nd Meeting of the G20 Employment Working Group, 15-17th
Feb., 2017, Hamburg, Germany.
4
Liao Yongxin, Loures Eduardo et. al., “The impact of the fourth industrial revolution: a cross-country
region comparison”, Production, 28, e20180061. DOI: 10.1590/0103-6513.20180061.
5
Mayanika James, Chui Michael et. al., McKinsey Global Institute, “A Future that Works: Automation,
Employment, and Productivity” January 2017.
systems, humans will become increasingly irrelevant in work processes. This may – like the
feared shift into unemployment and the gap between rich and poor – lead to social conflicts.6

Regional Perspective
Developing and emerging economies engage in singular, less diverse economic activities and
have a majority of low skilled, less educated workforce. Hence it is imperative that
‗preventive‘ and ‗proactive‘ steps be taken to ensure that the demographic doesn‘t lose its
jobs.7 ASEAN is seen as a follower and not as a developer of technology despite being a very
tech savvy region.8 Approximately 56 percent of all employment in the ASEAN-5 is at high
risk of displacement due to technology over the next decade or two. Across the ASEAN-5
countries, prominent industries with a high capacity for automation are hotels and restaurants;
wholesale and retail trade; and construction and manufacturing.9 According to Boston
Consulting Group (BCG), four industry groups will account for 75 percent of global robot
installations in 2025: (1) computers and electronic products; (2) electrical equipment,
appliances, and components; (3) transport equipment; and (4) machinery.10 BCG indicates
that at least 85 percent of the production tasks in these industries are automatable.
Automation happens in a ‗human-centric‘ manner and is known as semi-automation. These
are collaborative robots (cobots) which aid the worker as opposed to replacing them. This
collaboration may also change when robots become more sophisticated, but as of now, real
workers bring adaptability and perception to the process while the robots replace repetitive
tasks and challenging to reach operations.11

Automation and Robotics will have the most substantial impact on jobs in the industry
throughout the region. If we talk about the automotive sector, Robots are becoming better at
assembly, cheaper and increasingly able to collaborate with people. One key driver for

6
Wisskirchen Gerlind, Biacabe Blandine et. al., IBA Global Employment Institute, “Artificial
Intelligence and Robotics and their Impact on the workplace”, April 2017.
7
ILO: Asean in Transformation: The Future of Jobs at Risk of Automation
8
Tobing Agustha, Fadhilla Askabea et. al., “Thinking ASEAN:ASEAN in an era of the Fourth Industrial
Revolution - Prospects and Implications for Workers and Employment”, Issue 26 - August 2017.
9
Cisco & Oxford Economics, Technology and the future of ASEAN jobs: The impact of AI on workers
in ASEAN’s six largest economies, September 2018
10
Sirkin Hal, Zinser Michael et. al., “Industries and Economies Leading the Robotics Revolution”,
Boston Consulting Group, September 23, 2015.
11
Universal Robots, White Paper on “Robots, Cobots and Human Labour” available at
https://cdn2.hubspot.net/hubfs/2631781/HQ%20Content%20and%20Enablers/HQ%20Enablers/White
%20papers/Robots%20Cobots%20and%20Human%20Labor.pdf.
robotic and automation deployment is the common practice of including ―cost down‖
agreements, in which suppliers enter a contractual agreement to either reduce the overall price
of an auto part or increase productivity without increasing the resources expended.12 These
trends have a double effect on the labour force. Firstly, Low-skill workers will find
themselves displaced in favour of automation, and indeed, over 60 percent of salaried workers
in Indonesia and over 70 percent of workers in Thailand face high automation risk. Secondly,
manufacturers will increasingly seek higher skilled talent with R&D competencies, ranging
from analytical experts to autonomous driving engineers and sustainability integration
experts. Use of automation also disrupts the status quo, and there is an opportunity to look at
new ways of structuring old industry processes and patterns. Government and education and
training providers need to anticipate for automation impacts actively. 13 Governments may
need to revamp their economic policies deal with the situation posed by automation.

What Is Industry 4.0?

What are the critical technologies within Industry 4.0 driving transformation?

12
ILO: ASEAN in Transformation, op. cit.
13
Cawood Richard, “Can the universities of today lead learning for tomorrow: The University of the
Future”, Ernst & Young.
The emerging technologies have their own set of challenges and opportunities which depend
on various contextual factors like a) To which sector they are being applied to, b) What is the
reliability of that technology per unit cost production, c) Knowledge about technology
deployment within the industry etc. Some of the challenges are listed below:
1. AI has been regarded as the most impactful technology, followed by wearables,
drones, 3D printing, and blockchain. The key is to latch on to technologies in the early
phase of their disruption so that when (if) they become mainstream, businesses are
equipped with the infrastructure and experience to ride the wave.14
2. Internet of Things (IoT) too is expected to produce a tectonic shift in the way we live,
work and run businesses. 67% of market in the Asia Pacific region mentioned that this
technology would have a significant impact on their businesses by 2020.15
3. Another technology that is disrupting the industry is 3D printing or additive
manufacturing. It involves the process of making objects through successive layers of
materials under a computer‘s control. Mass additive printing will be the next stage of
this technology.

14
Bahl Manish, “The work Ahead: The Future of Businesses and Jobs in Asia Pacific’s Digital
Economy”, Cognizant - The Centre for the Future of Work.
15
Bahl Manish, “Humans + Intelligent Machines: Mastering the Future of Work Economy in Asia
Pacific”, Cognizant - Centre for the Future of Work, 2018.
 4. On the automotive manufacturing side of the sector, disruptions such as advanced
robotics, autonomous transport, 3D printing, and new energy technologies will have
some of the most direct impacts on jobs of any industry.16
5. Automation is not new to the industry and standardised robots have been
incrementally upgraded and have the most significant impact on the industry.
Previously, robots were large and did most of the dangerous, indelicate work (such as
painting and body shop) which was repeatable in nature. They were kept separately
from humans.17

Key factors that influence Industry 4.0 implementation

India is on a driver seat when it comes to digital growth. However, with the advent of the
computer and thereby Internet during the Third Industrial Revolution, it already paved the
way for the recent boom in technologies. Further, India holds the maximum number of the
youth population in the world and, millennials are pushing demand for fast, cheaper and
customized products in mostly every sector. The Indian Market is pushed towards technology
upgradation to meet the demand and the supply. Some of the key factors pushing the Indian
Market towards Industry 4.0 are:

1. In India, new digital consumers seem to be born, literally every minute. Every
second, five people join the online world for the first time in the region. It translates to
2.2 billion internet users – slightly fewer than the combined population of the U.S. and
Europe – and over 53% of the global internet populations by 2020.18 Thus,
Exponential increase in the power of computers coupled with a drop in costs is leading
to the current flourishment of emerging technologies.

2. Demand for better quality products is pushing the automotive industry to automate
their manufacturing processes. The growing middle class will translate into increased
demand for cars. Increased consumer demand increases the pressure on suppliers to
produce faster and hence automation has been seen as a viable solution. Suppliers face
constant pressure to comply with ‗cost-down‘ clauses on their contracts with

16
World Economic Forum, “The Future of Jobs: Employment, Skills and Workforce Strategy for the
Fourth Industrial Revolution”, Global Challenge Insight Report, January 2016.
17
CBINSIGHTS, “Future Factory: How Technology is Transforming Manufacturing”, April 8, 2018.
18
KPMG, “The truth about online consumers”, 2017 Global Online Consumer Report.
 automotive companies. Cost down is when there is the condition to produce the same
parts more cheaply or to increase the production of the parts. The cost reduction is
achieved through process improvements and automation hence, increasingly, being
adopted.19

3. Accidents on the industry floor have also reduced dramatically, thus creating safer
work environments by cutting fatal accidents are robots are now doing the dangerous
work.

4. Increasing minimum wage for labour is also pushing the demand for automation.20 It
was seen in western countries but now India also sees both silent and violent protests
in labour industry for a hike in minimum wage. In a new paper, Grace Loren of the
London School of Economics and David Neumark at the University of California
show that between 1980 and 2015, minimum-wage increases led to a significant
increase in the automation of low-skilled work in the US.21 This encouragement to
invest is good for the economy because it helps to boost productivity and living
standards. It‘s certainly good for the workers able to maintain their jobs with a higher
minimum wage. However, this method has its own set of challenges too.

5. Government regulations that mandate better environment standards (lowering carbon

emission, raising consciousness amongst consumers) that require more
technologically sophisticated parts are pushing changes in the sector too. (eg. Electric
Vehicles).22

6. India accounts for 42% of the population employed in agriculture and informal sector
combined, and both of them are seeing advanced technologies seeping in. In the
informal sector too, the ability of technologies to reduce the drudgery of informal
workers was essential. For example, waste pickers and street vendors expressed the

19
Maurer Andreas, Dietz Frank et. al., “Beyond Cost Reduction: Reinventing the Automotive OEM-
Supplier Interface”, Boston Consulting Group, March 2014.
20
Karsten Jack, Darell M. West, “Rising minimum wages make automation more cost-effective”,
Brookings Institution, September 30, 2015. See also, Bourne Ryan, “A higher Minimum Wage Acts as
a Subsidy to Automation” CATO Institute - August 18, 2017.
21
Lordan Grace & David Neumark, “People versus Machines: The Impact of Minimum Wages on
Automatable Jobs”, NBER Working Paper No. 23667 - August 2017.
22
Govt. of India, Ministry of Heavy Industries and Public Enterprises, “Government push for Electric
Vehicles”, http://pib.nic.in/newsite/PrintRelease.aspx?relid=174902
 need for technology that can aid in easy transport across bad roads.23 However, the
gender disparity is still evident – due to lack of know-how of the technology, women
were waste pickers whereas men were waste collectors, which exposed women to
more health hazards. Technology can help these women in these sectors.

Industry 4.0 is expected to increase productivity significantly and alter the job creation
potential of the manufacturing sector over the medium term. However, the impact is different
across the light and heavy manufacturing sectors. While heavy manufacturing sectors are
likely to start shedding jobs as facilities become increasingly automated, in the short term the
light manufacturing sector in India has the potential to grow and create more jobs by taking
advantage of the industry shifts away from China, where labour costs are rising rapidly.

Key barriers to adoption of technology

Industry 4.0 plays an important role in helping business players to boost their productivity
and customers in getting the product faster and cheaper. However, this does not come hassle-
free but has its own set of challenges. Some of the key barriers to adoption of technology
which various studies have pointed out are:

1. Lack of technical and digital capability to work, upgrade and maintain automated
technology poses a roadblock to the adoption of such technology.24 Integration of IoT
will need stronger technical, engineering, science and manufacturing skills.25

2. The benefits of automation on operator mental workload and situation awareness are
unlikely to hold if the automation is unreliable. Hence ensuring high reliability is a
critical evaluative criterion in applying automation. Automation reliability is an
important determinant of human use of automated systems because of its influence on
human trust.26

23
Casey Jonathan, Hughes Kendra, “Technology and the Future of Work Project”, WEIGO.
24
PwC, “Moving at the speed of Innovation: The foundational tools and talents of technology”, 2018.
25
Miranda S. Suarez, Marcos M. et. al., “The challenge of integrating Industry 4.0 in the degree of
Mechanical Engineering” Science Direct, Elsevier Publications, June 2017.
26
Parasuraman Raja, Sheridan Thomas et. al., A Model for Types and Levels of Human Interaction
with Automation, IEEE Publications, Vol. 30, No. 3, May 2000.
 3. High levels of automation is associated with potential costs of reduced situation
awareness, complacency, and skill degradation. It is not to say that high levels of
automation should not be considered for decision and action automation. However,
assessing the appropriate level of automation for decision automation requires
additional consideration of the costs associated with decision and action outcomes.27
4. If one‘s organization is waiting for digital technologies to prove themselves or has
adopted a wait-and-see approach to automation, it is probably a ―laggard.‖28
Companies behind the digital curve pay a big price. If one doubts the power of leaders
over laggards, consider the ―laggard penalty‖ – the difference in both cost and revenue
performance achievable through proper use of digital technologies. In economic
terms, a digital laggard today is on average, 8.3 percentage points worse off than a
digital leader.

Impact of Industry 4.0 on Labour

Key Sectors Likely to be Impacted
Industries with low automation risk across the ASEAN-5 include education and training, as
well as human health and social work. Prominent occupations in certain countries face
extreme risks of automation. For example, in Cambodia, where garment production
dominates the manufacturing sector, close to half a million sewing machine operators face a
high automation risk. In Thailand, automation risk is particularly acute for approximately 1
million shop sales assistants. In Indonesia, about 1.7 million office clerks are highly
vulnerable to automation. In each of the ASEAN-5, women are more likely than men to be
employed in an occupation at high risk of automation. Moreover, less educated workers and
employees earning lower wages face higher automation risk.29

International Labour Organization has picked out five key areas where Industry 4.0 has
seeped in and how its bringing changes in the nature of work.

27
Endsley Mica, Kaber David, “Level of Automation effects on performance, situation awareness and
workload in a dynamic control task”, Ergonomics, 1999, Vol- 42, No. 3, 462-492.
28
Davis Euan, Sambasivan Bhaskar et. al., “The Work Ahead: How Data and Digital Mystery will
Usher in an Era of Innovation and Collaboration”, Cognizant.
29
International Labour Organization, “The Impact of technology on the quality and quantity of jobs”,
Global Commission on the Future of Work, available at https://www.ilo.org/wcmsp5/groups/public/---
dgreports/---cabinet/documents/publication/wcms_618168.pdf
Automotive and auto parts30
Four major technologies are shaping the automotive sector: the electrification of vehicles and
vehicular components, advancements in lightweight materials, autonomous driving, and
robotic automation. They expect enterprises to accelerate research and development (R&D),
with a focus on electric vehicles (EVs), hybrid electric vehicles (HEVs), lightweight materials
and autonomous vehicles. As consumer demand for technologically capable cars with less
environmentally harmful effects rises, governments across ASEAN will be compelled to
implement policies incentivizing R&D activities and the purchasing of EV/HEVs.

Electrical and electronics31

Three disruptive technologies are likely to shape the E&E sector: robotic automation, 3D
printing (also known as additive manufacturing) and the Internet of Things (IoT). China
advances up the E&E value chain and enters higher skilled tiers of production, ASEAN
countries are well positioned to absorb much of the lower skilled E&E jobs from which China
is moving away, but mostly in the short term. Even though wages are rising in ASEAN, the
region‘s lower labour costs are still more attractive.

Textiles, clothing and footwear (TCF)32

TCF sector seems to be the most vulnerable to the extensive technological displacement of
workers. Many technologies stand to disrupt this sector: 3D printing, body scanning
technology, computer-aided design (CAD), wearable technology, nanotechnology,
environmentally friendly manufacturing techniques, and lastly, robotic automation. Body
scanning sensors and CAD can not only provide the perfect fit for the consumer but also
permit extremely fast delivery, which further accelerates through 3D printing. Because 3D
printing does not require as much human input, it enables production to move closer to the
markets in which products are sold. Automated cutting machines are now becoming a widely
available technology, and robots capable of sewing – called ―sewbots‖ – will soon change the
calculus of TCF production.

30
Supra 13, op. cit.
31
Ibid
32
Ibid
Business process outsourcing (BPO)33
Cloud computing, software automation, and knowledge process outsourcing are three
technologies that are impacting this sector. Strong cloud computing products offer an
opportunity to expand enterprises‘ client pool and continue the sector‘s growth. Cloud
computing, specifically Business Process as a Service (BPaaS), allows BPO enterprises to
store software and data over the Internet. Cloud computing also enables enterprises to select
services personalized to their needs, as opposed to purchasing an entire outsourcing package.
These advantages make BPO services accessible to small- and medium-sized enterprises
(SMEs) – a previously untapped market segment.

Retail34
Disruptive technologies in retail – such as mobile and e-Commerce platforms, the IoT, cloud
technology, and big data analytics – are still yet to achieve mainstream usage in the region.
Theoretically, mobile and e-Commerce platforms could massively displace ASEAN‘s more
conventional ―brick-and-mortar‖ retail establishments. Products can increasingly be sold
online more cheaply, especially because rent and overhead expenses are rising, consumers are
becoming more tech-savvy, and Internet infrastructure is improving. Cloud technologies, big
data analytics and the IoT promise to improve enterprise operations by optimizing inventory
management, product tracking and shopping intelligence. Classic retail challenges, such as
producing too much or too little of a product, can be solved through an effective, Internet-
connected system.

Is Industry 4.0 changing the nature of work?

AI opens new opportunities for companies and individuals. Humans are adaptable and will
create new jobs. The use of intelligent IT systems helps decrease the time required for the

33
Ibid
34
Ibid
product or the service, and the associated costs as well.35 The time saved, especially for
dangerous work, can be used by human beings for other work or leisure. AI should thus result
in a growth of prosperity.36 This applies especially to high-wage countries where it is possible
to produce at lower cost owing to production robots. The global workforce is expected to
experience significant churn between job families and functions, with administrative and
routine white‑ collar office functions at risk of being decimated and strong growth in
Computer and Mathematical and Architecture and Engineering related fields.37
Manufacturing and Production roles are also expected to see a further bottoming out but
might have the worst behind them and still retain the relatively good potential for upskilling,
redeployment and productivity enhancement through technology rather than pure substitution.

As one of the studies pointed out that the workforce mix in India by 2022 will roughly paint
the picture in which 9% would be deployed in new jobs that do not exist today, 37% would be
deployed in jobs that have radically changed skill sets and 54% of the workforce will fall
under unchanged job category.38

Automation will shift the industry‘s labour needs from low-skilled, assembly line workers to
technically equipped workers with a variety and depth of skills. There is also a lack of interest
amongst the youth today to take up manual labour which is perceived to be low paying and
physically intense, henceforth, in the past humans participated actively in production, they
will now supervise it. The humans who become superfluous will make greater use of their
time to develop and perform innovative services. While it is acknowledged that technology is
less likely to change work opportunities dramatically in developing economies in the coming
years – as labour costs remain lower than technology capital, running and maintenance costs
– there are nonetheless many predictions of the transformational potential of emerging
technologies to eradicate poverty39. Yet the role and importance of technology in informal
work opportunities and livelihoods are little understood or explored. Technology can be a

35
Deb Sagarmay, “Information Technology: Its impact on Society and its Future” Scientific and
Academic Publishing, Queensland University, 2014.
36
Acemoglu Daron and Restrepo Pascual, “Artificial Intelligence, Automation and Work” MIT, January
4, 2018.
37
Nilsson Nils, “Artificial Intelligence, Employment and Income”, Artificial Intelligence Centre -
Stanford University, The AI MAgazine - Summer 1984.
38
FICCI, NASSCOM & EY, “Future of Jobs in India: A 2022 perspective”.
39
Chandy Laurence, “The Future of Work in the Developing World”, Brookings Blum Roundtable 2016
Post-Conference Report - January 2017
great enabler, helping people to do more, better. However, it will also be a mirror of social
inequality.

How is Automation shifting traditional processes and patterns in the sector?

To remain competitive, ASEAN enterprises will need to seek collaborative opportunities with
OEMs to accelerate the integration of advanced automotive technologies. Equally important
would be investing in the capacity development of local automakers.40 Moving forward,
ASEAN automakers should prioritize forging partnerships with technology and electronics
firms, as electronics and gadgets have become indispensable to making smart vehicles. Tier-
one companies are constituting internal task-forces to monitor new automation technologies
and assess how they fit into their processes. Currently, tasks which are simple, low skilled and
repetitive are being automated.

The biggest patterns which will see a blow will be those of Education, Skilling and Industrial
Relations. Automation across the region is replacing low skilled manual labour. Skills such as
critical thinking and problem-solving skills are in demand. New forms of employment, such
as those borne with the gig economy, will eliminate the contributions towards social
protection schemes. Likewise, a fall in labour supply will have an adverse effect on the
number of social contributions and the sustainability of pay-as-you-go insurance systems.41
Meanwhile, aging populations will require more funds to afford pensions and care services.
The inward migratory pressure that many developed countries are expected to incur in the
future may squeeze social protection systems further. For some emerging economies, high
wages might stifle social security sustainability.42 A last adverse effect arises from a low-
interest environment which is predicted to continue. Studies also highlight the importance of
including workers under non-standard forms of employment into social security benefits.

Flexible and temporary work, among other forms of non-standard employment, is expected to
become more prevalent soon. Many anticipate lower wages, reduced social protection and

40
Nag Biswajit, Banerjee Saikat et. al., “Changing features of the Automobile Industry in Aia:
Comparison of Production, Trade and Market Structure in Selected Countries”, Asia-Pacific Research
and Training Networks on Trade Working Paper Series, No. 37, July 2007.
41
International Labour Organisation, “Strengthening social protection for the future of work”, 2nd
Meeting of the G20 Employment Working Group, 15-17 February 2017.
42
Bloom David, “The world will struggle with population growth, aging, migration and urbanization”,
Finance & Development A Quarterly Publication of International Monetary Fund, March 2016, Volume
53, Number 1.
more work insecurity to follow.43 Some studies point out, however, that flexible and remote
work will allow marginalised workers to join the workforce, as well as workers with family
responsibilities. The impact of the gig economy, entailing increased precarisation, decreased
bargaining power and reduced legal protection.44

Another big problem is the gender divide as per data. The idea of freelancing is closely
aligned with the constraints within which women in India seek employment. The ability to
work from home, at a time convenient is a huge advantage for women, especially those who
are primary caretakers of children and the aged at home.45 In fact, some platforms claimed
that freelancing was often thought of as a domain for women, but those trends were quickly
changing as men have expressed the need for more control over work hours.

Is adoption resulting in job creation/job loss?

When we are looking at job creation or job loss it has to be seen from Task-Based Approach
(TBC). One of the most interesting aspects of Frey and Osborne‘s Research 46 is that they
focused on the content of each occupation i.e. the tasks performed by each worker and
classified them according to susceptibility to computerization. Such an analysis was made
possible because of the existence of the Occupational Network Information Service (O*NET)
sponsored by United States Department of Labour.47 In order to formulaically classify
occupations, Frey and Osborne used nine variables to characterize the three non-automatable
activities: Perception and manipulation tasks: (1) Finger dexterity; (2) Manual dexterity; and
(3) Cramped workspace, awkward positions, creative intelligence tasks: (4) Originality; and
(5) Fine arts Social intelligence tasks: (6) Social perceptiveness; (7) Negotiation; (8)
Persuasion; and (9) Assisting and caring for others.

Industry 4.0 is still in its nascent stages in India. However, due to technology adoption many
of the jobs in manufacturing sector and IT sector are already seeing a hit. However, the gap in

43
International Labour Organization, “Non-Standard Employment Around the world: Understanding
challenges, sharing prospects”, 2016.
44
International Labour Organization, “A reflection on the Future of Work and Society”, September
2017, Geneva.
45
Asia Productivity Organization, “Why Asia must up female Workforce Participation” August 2018.
46
C. Frey and M. Osborne, The Future of Employment: How Susceptible are Jobs to
Computerisation?, in Technological Forecasting and Social Change, 2017, vol. 114, issue C, 254-280.
47
http://www.onetonline.org
employment created due to the fall in manufacturing employment will need and has the
potential to be met by the services sector. The services sectors can broadly be categorized into
three buckets, with growth and job creation potential varying across them.48 ‗Evolved‘
services like construction and financial services are currently contributing over five percent of
GDP and a large number of jobs. They will continue to grow and drive a sizeable share of job
creation; however incremental job creation (over current levels) is likely to be low.49 ‗Under-
penetrated‘ services, such as education, tourism, transport and storage and healthcare will see
rapid growth and job creation, fuelled by the growth in technology. Finally, a new set of
‗emerging‘ services sectors, such as natural infrastructure management and digital services,
will need to be developed to bridge the jobs gap.

If we take an example of emerging technology, say, 3D printing, the traditional approach of

manufacturing different components separately and then assembling the product will be
replaced by one-time printing, which is a single action. Some believe that drawing from the
experience of other industries that have adopted the 3D printing, the technology will be used
only for low volume prototyping or to perform unsophisticated tasks. 3D printing will require
supply of highly skilled workers, therefore its disruptive impact is still being debated.

Overall, social skills—such as persuasion, emotional intelligence and teaching others—will

be in higher demand across industries than narrow technical skills, such as programming or
equipment operation and control.

How should Policymaking respond to Future of work?

Education and Skill Training
Targeted policy focus on education and skills is essential to climb the value chain as more
factories move to automation and robotics, the availability of higher skilled labour is
becoming more important, and this will drive investment decisions.50 It‘s imperative for the
sector to have stronger strategic alliances with education and vocational training institutions

48
Bhattacharya Arindam, Bijapurkar Aparna, BCG & CII, “India: Growth and Jobs in the new
Globalization”
49
Ibid
50
World Bank. The East Asian Miracle: Economic Growth and Public Policy. World Bank: Oxford
University Press, 1993.
so that relevant skills are provided by the incoming workforce.51 The sector should also
collaborate with educational partners to encourage female students to enter degree and
certification tracks for recruitment in the auto industry. Create regional innovation clusters,
districts, and corridors by building strong linkages around manufacturing automation and
robotics between universities and start-ups in India. Use AI-based training and teaching
software in various skilling and educational applications. Introduce tailored courses with
flexible completion timings to enhance students‘ inclination towards learning.52

LABOUR REFORMS
Creative solutions from employee representatives, national lawmakers and companies are
required in order to manage the problems that will arise. For instance, the Italian Sharing
Economy Act is a potential way to solve the new labour market‘s problems. Such new legal
frameworks will create new jurisprudential questions, for example, concerning the distinction
between a platform and real business or the definition of specific criteria to distinguish
between ‗on-demand workers‘ and ‗traditional workers‘53 for each sector. Design labour
market institutions (e.g. minimum wages; employment protection; health and safety
regulations) which encourage employers to seize the opportunities offered by technological
change and globalisation, while making sure that the risks are not borne disproportionately by
workers in the form of low pay, precariousness and poor working conditions.

SOCIAL SECURITY MECHANISM

Re-think social security systems to minimise the chances of people slipping through the holes
by (i) tailoring or adapting them to the new forms of employment; or (ii) decoupling them
entirely from people‘s work status and history. Permanent and casual workers, including
trainees and apprentices, perform largely the same kinds of tasks in the assembly line.
However, permanent workers have a greater level of involvement in roles involving both
manual labour and supervision, while casual workers perform core production (manual
repetitive) tasks only. Contract workers thus end up performing more physically strenuous

51
OECD, “Bridging the Gap: The Private Sector Role in Skills Development and Employment”
October 2016.
52
Potode Ankita and Manjare Poonam, “E-Learning using Artificial Intelligence”, International Journal
of Computer Science and Information Technology Research, Vol. 3, Issue 1, March 2015.
53
Groen Willem, Lenaerts Karolien, et. al., European Economic and Social Committee, “Impact of
Digitalisation and the on-demand economy on labour markets and the consequences for employment
and industrial relations”, Feb. 2017.
and even dangerous tasks with lesser training. As the organization of work becomes more
precarious and flexible, it has become increasingly necessary to disassociate social security
and traditional forms of employment, in order to extend minimum wages, security, pensions,
and benefits equal to a range of atypical workers. Industry and state bodies will equally have
to respond to this casualization of the workforce in a traditionally formal sector with
imaginative ways of ensuring conditions of decent work54 non-standard employed workers
across the formal and informal sector.

RECOMMENDATIONS
Some of the recommendations which have not been explored in India to a larger extent are:

1. In its current form in India, online freelancing is neither very glamorous nor viable. It
might take years of perseverance from both clients and freelancers to established trust.
Unless both sides of the market work together to address concerns, the growth of
online freelancing will never achieve full potential.55 Digital infrastructure will be as
critical as physical infrastructure. This should cover all layers of the ‗technology
stack‘ —high quality and ubiquitous broadband and low cost smartphones, the India
stack, societal platforms, and standards and norms for interoperability of digital
systems that enterprises can leverage.

2. The kind of information given by United States Department of Labour is needed by

researchers for the mapping of skill requirements and the relevant tasks to come up
with a suitable job role. Like, United States, Japan also has similar examples where
relevant data was gathered by Japan Institute for Labour Policy and Training (JILPT)
through online surveys. In India, we too need this kind of information collection
survey.56
3. The learning and skilling ecosystem has to move towards a ‗life-long learning system‘
as new kinds of jobs emerge with very different skill profiles. This will ensure that the
appropriate skills are provided to enable employees in the new development paradigm

54
Bhandari, A. K., & Heshmati, A. (2006). Wage inequality and job insecurity among permanent and contract workers in
India: evidence from organized manufacturing industries.
55
Hussenot Anthony, World Economic Forum, “The future of work could lie in freelancing”, August
2017.
56
See the JILPT Research Report No. 146 (http://www.jil.go.jp/english/reports/documents/jilpt-
research/no.146.pdf) and No 176 (http://www.jil.go.jp/english/reports/jilpt_research/2015/no.176.html)
 and there is a continuous mechanism in place to update these skills as required. As
bots take over a wide range of low skill repetitive tasks, the government must focus on
computer literacy for individuals to sustain the growth of online freelancing and
micro-work. In addition to the technical training, surviving online freelancing jobs
also requires soft skills training which includes people skills, communication skills,
social intelligence, etc. The government could allocate resources to create a database
along the lines of the Online Labour Index (OLI) that help better understand the
composition of this market. It will also help direct policies on formalization and re-
skilling of the labour force in India.57

4. Labour norms need to be revisited to ensure that they also cater to and support the new
types of workers and their employers who will drive growth in this new paradigm.

5. Invest in automation research in India by building research labs and design studios in
India. Risk and growth capital for micro-entrepreneurs has to be scaled up rapidly,
along with the rules and mechanisms for easy access to them.

57
University of Oxford is carrying out The iLabour Project to investigate the Construction of Labour
Markets, Institutions and Movements on the Internet. Available at https://ilabour.oii.ox.ac.uk/online-
labour-index/