Share of organised sector will grow to 10 percent of overall economy, says report by FICCI and EY
In the organized manufacturing and service sector, employment is expected to increase from the current 38 million to 46-48 million by 2022, a new study has found.
All the new forms of employment are expected to add a further 20% - 25% to the workforce of the current deﬁned “organized” sector in 2022, according to the report, ‘Future of Jobs in India’, brought out by industry body FICCI and Ernst & Young (EY).
This would increase the share of the organised sector in the overall economy to 10% from current level of 8%, i.e. approximately 60 million in a workforce of 600 million, the report said.
The report highlights the impact that various primary forces such as globalisation, demographics, and Industry 4.0 and exponential technologies, are expected to have on the key sectors of the economy. It also provides an overview of the job creation rates across various sectors and the new jobs that will emerge in the next few years.
The future of jobs in 2022 would be determined by the country’s response to 12 megatrends captured by the EY framework, which includes, under globalisation – i) the level of exports of India based companies, ii) rapid adoption of exponential technologies in the advanced markets and its impact on offshoring, iii) increasing/shrinking overseas job market for Indian workforce and iv) level of FDI flows.
Under adoption of exponential technologies by Indian companies – i) business innovation, ii) creation of highly optimized supply chains, iii) launch of smart connected products/services, iv) new work arrangements, and v) the demand for resourceful planet and sustainability.
Lastly, under demographic changes – i) increasing urbanization, ii) rising middle-class and iii) high proportion of young population including millennials. In India, creation of highly optimized supply chains under exponential technologies and rising middle-class under demographic changes at 68% and 64%, respectively shall be the key influencers.
Sanjaya Baru, secretary general, FICCI, said, “Since there is no India based empirical study which highlights the impact of advanced technologies on key manufacturing and services sectors that create the bulk of jobs and contributes majorly towards GDP, FICCI and NASSCOM initiated the study on ‘Future of Jobs’ with EY. The report examines the global megatrends, its impact on Indian economy and recommends the way forward.”
R Chandrasekhar, president, NASSCOM, said, “The report attempts to present a 2022 picture – a time when no one can afford to ‘rest on one’s laurels’ but needs a continuous learning culture. Another important fact being seen is that non-tech firms are increasingly emerging as the source of information technology roles; for eg. automotive, aerospace, BFSI, telecom, retail, healthcare, etc.”
Shobha Mishra Ghosh, assistant secretary general, FICCI, said, “New technologies and new industries are changing the dimensions of enterprises. In the evolved scenario, the “Future of Jobs” in India will be determined by the stakeholder response to the inevitable impact created by the interplay of three primary forces i.e. Adoption of exponential technologies, Global geo-political environment and Demographic changes”
Anurag Malik, partner - people & organization, advisory services, Ernst & Young (EY), said, “The adoption of exponential technologies is disrupting industries by creating new markets and India is at the cusp of this change. The rapid embracing of these exponential technologies by Indian companies has the potential to transform highly unorganized sectors, such as transportation, maintenance, food catering, and software development services, into organized ones. Government of India’s ‘Skill India' mission aptly supports the adoption of exponential technologies and helping the workforce for the future job roles in India.”
Arunkumar Pillai, partner - skill development, government and public services, EY, said, “Today, the adoption of exponential technologies by companies in advanced markets is affecting the future of jobs in India. By 2022, new business process offshoring opportunities in North America/European markets are expected to become insigniﬁcant. Hence, the need of hour is to collaborate with and incentivize industry for skilling in exponential technologies to create an Industry 4.0 ready workforce.”
The new forms of employment would include:
Contract employees in infrastructure sector
Micro entrepreneurs supported by MUDRA schemes
Employer–entrepreneurs in technology enabled employment models
Freelance workers on online platform models
SME and artisan entrepreneurs on ecommerce platforms
Delivery workers and service providers in the ecommerce ecosystem
Employees in tech start-ups