There is a large youth population across the globe, which is unemployed or underemployed. There are also companies that have jobs they cannot fill. Both these scenarios present a challenge – a growing gap between youths’ skills and employer needs. ‘Half the population is under the age of 25 and two-thirds are less than 35. According to Accenture’s ‘Fueling India’s Skill Revolution’ – by 2027, the country will have the world’s largest workforce, with 1 billion people aged between 15 and 64 years. While these numbers are promising, they also come with their own set of challenges. Let’s discuss more in the context of “Workforce Challenges in Adopting Industry 4.0”.
Further, the report predicts a drop of 2.3 percentage points, or USD1.97 trillion in potential cumulative GDP growth over the next decade, if skill-building is not at the same pace as technological progress.
While the increased adoption of Industry 4.0 is welcome news for its benefit, this could pose an issue, with the growing skill gap.
So what is the nature of the challenge and why is this fear looming large? Let’s find out.
What is Industry 4.0?
The term was first coined by Klaus Schwab, founder and executive chairman of the World Economic Forum. He said “a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres”; a progress defined by “velocity, scope, and systems impact” unlike ever seen before.
Industry 4.0 encompasses Big Data, Internet of Things (IoT), Artificial Intelligence (AI), connected device and analytics. These enable higher productivity in manufacturing and also ensures greater response to consumer needs.
“The elements of Industry 4.0 offer unique opportunities to Indian manufacturers to be more efficient and competitive while offering superior customer experience,” said Pankaj Bhardwaj, CEO of Fortune 500 Avery Dennison, in an exclusive chat with The Blue Circle. “There are enough specific areas that can unlock value through IOT and data analytics. Warehouse management, connected planning, energy efficiency and Robotic Process Automation have well established use cases and are lower hanging fruits,” he added.
While the positives are reassuring, the fear is palpable when it comes to the readiness of the workforce. Deloitte’s report ‘Preparing tomorrow’s workforce ready for the Fourth Industrial Revolution’ says – “4IR is described as an incoming thunderstorm, a sweeping pattern of change visible in the distance, arriving at a pace that affords little time to prepare. While some people are ready to face the challenge, equipped with the tools to brave the change and take advantage of its effects, others do not even know a storm is brewing.”
So what are the biggest challenges and how do we tackle those?
On the hunt for a future-skilled employee
According to the Education Commission, it is predicted that by 2030, more than 50% of the nearly 2 billion youth worldwide will not have the necessary skills to participate in the emerging global workforce. In simple terms, this means this large population is unprepared for tomorrow’s fast-paced technological growth.
Speaking of India, every year, more than 3 million graduates and postgraduates make an entry into the Indian workforce, according to NASSCOM. However, only 25 percent of technical graduates and 10-15 percent of other graduates are skilled to land jobs in the IT and ITes industry.
With the increased use of technology and 4IR, it is important to inculcate in students soft skills such as creativity, problem-solving, communication, emotional intelligence and critical thinking. These skills are important, as confirmed by education research. ‘The idea is to help students enhance their intra-personal, interpersonal and cognitive abilities’.
Thirdly, focus on technical skills and targeted training is lacking at the moment. The aim should be to understand industry-specific needs and then seek input from industries themselves. This can open up more opportunities, based on industry-driven demand analysis.
Anil Bhasin, President, Havells India in a chat with The Blue Circle(TBC) explains, “While we have been talking about Industry 4.0, what about Education 4.0? I go to the universities for recruitment where I see professors have a mindset. They want to run with the old kind of system that they have been running for the last 20-30 years. It will take another decade for us to change it.”
Challenges like lack of motivation, time, and inadequate resources, or even resistance to change can be a hurdle to the right skill development. That’s why it is important that education, workforce programs, as well as employers come together to support the development of youth.
Key to Success
Identifying the skill
In a 2018 Accenture survey, Indian business leaders agreed that difficulty in identifying learning opportunities prevents students and workers from developing new skills. The survey also highlighted that one of the reasons for this skills gap was the lack of clarity on what they need to learn. To begin with, technological tools can help tackle these challenges.
Speaking to TBC , Rajeev Dubey, Group President- (HR & Corporate Services) & Chief Executive Officer (After-Market & Corporate Services) Mahindra & Mahindra Limited said, “I feel that India will be at a real risk, if requisite action is not taken.There will not be enough jobs to go around, the inequality, which has been increasing by the way, the genie coefficient, which is a measure of inequality, is becoming higher everywhere. Real wages per capita have been falling. If you do not proactively look at what are the skills and competencies to be created, how do people who don’t have money get the skills and competencies, which will be required to get the new jobs? Technology will pervade everything, whether we like it or not, what will happen to social security, who will be there for dispute resolution?”
Employers need to redefine the roles that people hold in their organisation, and how to build a talented pool of future workers who are ready for this transformation. In addition, they need to find ways to ‘upskill’ existing workers who can successfully make this transition.
TalentBoost Academy, a Dutch talent development company, uses artificial intelligence (AI) to offer personalised learning to individuals and track their progress. The program focuses on motivation, personality and learning data to check if a person is suitable for the job. Another example is Skillsoft. The company has introduced an intelligent online learning platform, Percipio, that offers curated content and provides users with an immersive learning experience.
The use of adaptive learning
New digital learning platforms that offer adaptive learning can launch to enhance skill development opportunities. The Government of India has initiated the development of a national platform called SWAYAM (Study Webs of Active-Learning for Young Aspiring Minds). This platform hosts 2,000 courses and 80,000 hours of learning, covering school, undergraduate, post-graduate, engineering, law and other professional courses.
That’s not all – even NASSCOM has launched Future Skills, an online platform that offers courses in emerging technologies like AI, virtual reality, cloud computing, 3D printing, among others. Their goal is to train 2 million seasoned IT professionals and 2 million young workers.
Addressing mismatch between university curriculum and industry demand
One of the biggest reasons for the skill gap is the mismatch between university curriculum and industry requirements. With increasing adoption of technology, the skills learnt in the past aren’t of much use in the present. Through the use of digital learning platforms, simulators and augmented reality/virtual reality (AR/ VR), work environments can be recreated to help the workforce be better-prepared.
For example, ThyssenKrupp, a German conglomerate, has overcome this through AI. The company equips its elevator technicians to consult subject matter experts through Microsoft HoloLens, an AR headset.
An Indian startup, Skillveri offers low-income youth advanced manufacturing skill training through high quality simulators. These simulators offer students an interactive learning environment and testing tools that enable the understanding of their performance, at a granular level, for continuous improvement.
Making use of the gig economy
According to the UN Labour Report, the unemployment rate in India increases every year – from 17.7 million in 2016, 17.8 million in 2017, and 18 million in 2018. Over eight million jobs are required every year, so that there is stability in the employment rate. In this scenario, gig economy is a promising proposition for different segments of the workforce – fresh graduates, experienced professionals, retired, and those women who were on a sabbatical due to family reasons.
An article in the Business Standard mentions that the gig economy is generating 56 percent employment in India, and going to grow 25-30 percent per annum. HR professionals are gradually trying to modify manpower planning to accommodate professionals of different hierarchies.
Indian manufacturing can follow the German apprenticeship model and create opportunities around that. These apprenticeship gigs can induct youngsters the moment they get out of high school. This solution is reliable – it will build skills early on and ‘reduce misalignment with industry’. That’s not all – it also brings about a sense of certainty, since unemployment is a cause of worry for most professionals.
Action for a better future
Making the workforce ready for tomorrow’s technological change is important, and requires participation of all stakeholders. Companies need to collaborate with the government to propagate increased use of technological tools, to ensure those entering the workforce have the relevant skills to succeed. With newer technologies such as AI and blockchain, newer opportunities open up, especially in the skilling space. For India to keep pace with this, it is imperative for the government to support research and collaborative efforts.