How can “Make in India” evolve?

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        The ‘Make in India’ vision is grand: Prime Minister Narendra Modi hopes to create 100 million jobs by 2021 and spur the development of middle class that will power the Indian economy in the near future. This ambitious program is designed to turn the subcontinent into a “global manufacturing hub” and increase jobs by providing a fresh impetus to the economy. Running high on this momentum, the government geared the union budget to aid several policies such as ‘Skill India’ and ‘Digital India’ that complement ‘Make in India’.

        Attempting to tap this aggressive fiscal push, key manufacturing industries are in the process of incorporating artificial intelligence (AI) to reap productivity gains from automation in areas such as labor flexibility, better finish, more reliable demand forecasting, agile supply chain and inventory optimization. Make in India is a laudable initiative; however, pro-rata quantum increase of 100 million manufacturing and service jobs, a goal of the initiative is yet to be seen.

        The Make in India initiative may have come a little too late, and then too without proper support critical for its success. India is required to generate 12 million jobs each year to employ new entrants to the labour market. This figure does not include about 20% of the jobs today that face existential crisis. With the increased sophistication of AI and automation, there are concerns that will lead to further significant unemployment as capital is substituted for labour and reduce the size of the middle class. So, even if India becomes a global production hub, the declining labour-intensity of manufacturing suggests the fruits of this accomplishment will be highly concentrated among very few. In short – the economic tide may rise, but it will not lift everyone’s boat.

        Manufacturing was indeed the main driver for employment creation and economic growth over the last two decades for the Asian tigers and China. However, this is yesterday’s playing field. Now, even Apple is relocating iPhone manufacturing away from China to completely automated factories in the US. Similarly, as AI evolves, many BPO and outsourcing jobs will be replaced by AI. After all, anything that can be described as a series of logical steps and sent down a wire to a BPO can equally be done by AI. Tomorrow’s playing field would involve technology creation, IP (Intellectual Property) creation, licensing and brand ownership. The jobs of the future will be “what computers & AI cannot do better than humans”.


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