FUTURE OF JOBLESS GROWTH AND FALSE VANITY

 

 

Jobless growth in a country like India, blessed with a window of opportunity because of her demographic dividend, is an illusion of wellbeing which will not last very long. It will soon come to bite us back. Workplace automation and AI are creating havoc in the job market. In the last three decades the service sector has lifted millions of aspiring graduates from oblivion into India's newly increasing middle class. Every time the service sector output jumped new hiring ensured a steady stream of newer employments. Things are however different now; service sector output is up, but net job creation is minimal. According to staffing firm HAN Digital, the number of fresh graduates recruited by India's IT BPM sector fell from an estimated 4 lakhs in FY22 to 1.75 lakhs in FY26, a 56% decline. Nasscom's industry wide data shows that the net jobs added by India's tech industry fell from 4.45 lakhs in FY22 to 1.35 lakhs in FY26, a 70% decline. 

 

With the Introduction of AI the job market is rapidly changing, but do the job aspiring Indians fully appreciate this changing scenario? According to Edcom Research, using official AICTE dashboard data, new UG technology and engineering enrollment climbed from 9.2 lakhs in FY22 to 13.5 lakhs in FY26! Is it very difficult to understand how many unemployed and underemployed and disappointed engineers we are going to have this year with grossly compromised buying power?

 

The AI challenge has scarred even those who succeeded in landing with a tech job. In FY26 they have received an average package of Rs. 3 to 4 lakhs per annum only. The jobs for which they were recruited like coding, data processing, financial reconciliation and customer support are now being done by AI, and so the lower rungs of the employment ladder are simply not there for the freshers to climb! The middle level executives are now managing these jobs with AI assistance, adding to the profit margins of their corporate employers. Then again, the beginners of today would have become experts of tomorrow, but with no beginners today, what will these firms do, when this generation of experts fade out is a question I hope the industry is asking itself. 

 

If government does not actively intervene at this juncture the macroeconomic consequences of this trend of jobless growth can be severely detrimental. Only corporate efficiency alone can not support high growth and our nation's economy. How will young graduates without a monthly salary buy motorbikes, rent urban apartments, spend money on consumer goods, travel and tourism, and eat out in restaurants or patronize Zomato, Swiggy, Ola and Uber? By substituting fresh real people hiring with smart software driven productivity what is corporate India aiming to do if not undermine their own domestic consumer demand? Who are going to buy their products tomorrow? Can they sell their produce to algorithms?

 

If corporates don't understand this simple logic the government has to make them understand by tweaking the rules. Instead of encouraging industry with production linked incentives solely, recruitment based incentives too should factor in. Capital investment and output targets are important, but so is employment generation. Public subsidy must generate fresh employment and certainly not do the reverse. The economy looks good today, but if the growth remains jobless, it won't remain good tomorrow. 

 

The jobs will keep on changing and Universities should prepare students for changing job markets. If that involves newer skill development in AI and machine learning the university curriculum has to be changed to meet the newer challenges. If companies are unwilling to spend money and time on teaching basic office skills, the teaching institutions should take up this job and make graduates market ready.

Swimming with the tide and learning AI and how it can make one more productive and valuable for the industry is always an option. Those who were driving horse driven carriages learned to drive motor vehicles when the industrial revolution challenged them with automation. Such watershed moments have repeatedly come in our history and those who have learned newer skills have championed all odds and succeeded. However, those who were too scared to change were left in the wilderness of history. No industry remains static and change is the only thing that is constant. In the eighties we were trained to do open cholecystectomies, two decades later we learned laparoscopic cholecystectomy and two decades further down the line we learned robotic cholecystectomy. Every new challenge is an opportunity for improvement and those who hesitate to change first stagnate and then disappear into oblivion.

 

A change in our attitude towards work is long overdue. We, the literate section of the society in India, feel that working with hands is far inferior to working on the computer. Is it really so? Do you have any idea how much the neighborhood plumber, the electrician, and the automobile repair person earns? Do you know how much the vendor selling golgappas on a push cart, or samosa, bun makkhan and tea from a street corner shop earn every day? Can you even fathom the profit margins of a green grosser or a butcher or a fish seller? It is time you did. You may not have bestowed upon them your social status and your stamp of approval, but Goddess Lakshmi has been very generous with them. She has a habit of rewarding hard work more than societal approval. It is time we realized that the difference between blue collared jobs and white collared jobs that clouds our mind needs to disappear. Two years back a German plastic surgeon in Berlin invited me to her home and introduced me to her daughter and son in law, who were both mechanics in Volkswagen's Wolfsburg plant and she was very proud of them. Can Indians even imagine such social synergy!