With technology displacing existing and future jobs, survival self-employment will only get tougher writes, Rekha Sethi
The scale of job creation required in India now is unprecedented. The country needs to create 15-20 million jobs every year given its demography. Large companies cannot create so many jobs because of their inherent bias towards mechanisation. The smaller businesses will absorb most of the workforce but as they grow and move up the value chain, they, too, will automate.
The government cannot help much either because of its fiscal constraints. That leaves entrepreneurship as the only option to create jobs in the huge numbers that the country needs. Simultaneously, advancements in technology are making the challenge of job creation only tougher. Robotics and artificial intelligence are going to eat up many of the existing jobs, including white-collar jobs.
The resulting displacement of the existing workers will increase the number of those searching for work and income. Historically, every technological disruption of jobs has been followed by a boom in newer kind of jobs, but this time could be different. The pace of change is too fast for people to keep up with. The creation of substitute jobs is likely to delay the destruction of jobs. Once again, entrepreneurship will have to come to the rescue.
Unlike in the past, survival self-employment will not provide a way out. Traditionally, nearly 80 per cent of working Indians have been self-employed – not because they are supremely entrepreneurial, but because they cannot find jobs. Now, India needs genuine entrepreneurs who can create jobs for themselves and many others. In any case, survival self-employment will get tougher in a highly regulated, high-tech economy. The government’s efforts to develop both skills and entrepreneurship are very welcome in this scenario.
The creation of many sector skill councils is going to help upgrade workers’ skills across all sectors and enable them to exercise the option of turning entrepreneurs. At least, that is the plan. India could learn from the entrepreneurship development experience of the developed countries. In Europe, for example, entrepreneurship is integrated in the vocational education curriculum. Almost all students enrolling for vocational courses opt for entrepreneurship study.
In Germany’s dual system that combines education and skill development, there is strong emphasis on independent planning and execution of tasks, and taking responsibility of the business outcomes. It includes optional programmes that focus on selfemployment and founding a company. There is a particularly high emphasis on craft skills. About a quarter of the curriculum in the craft courses focuses on setting up and running a crafts company.
India needs to address its short-term and long- term needs for entrepreneurs by including entrepreneurship learning in school education and skill development. Children need to be given grounding in entrepreneurial attitude and skills in schools by including financial and occupational learning in the curriculum. However, for the immediate term, India must add a clear and effective layer of entrepreneurship training to its vocational education and skill development programmes.
All skill development programmes must include an entrepreneurship module. This module must give trainees the appreciation of skills as a business. They must be taught how to choose a business model and make a business plan to get funding and enter the market. They also need to be schooled in marketing, leadership and regulatory compliance. Digital competence is critical to most skills, particularly to entrepreneurship. The skill trainees must be schooled in using online platforms for sourcing, collaborating, selling, fundraising, paying taxes, regulatory compliance, etc.
A lot of the credit for China’s entrepreneurial boom goes to platforms such as Alibaba and Tencent that have enabled ordinary Chinese to set up and link micro businesses to the markets within the country and overseas. However, it would be wishful to expect skill trainees to go out and set up businesses after few weeks of classroom learning. It is critical to involve the industry in entrepreneurship training. Trainees must work with enterprises or handle projects for them. In addition to imparting business skills, working with companies would give the trainee first-hand knowledge of the latent business opportunities. In any case, it would make trainees more employable.
Employers play an important role in turning employees into entrepreneurs. Most first-generation entrepreneurs start either by turning vendors to the employers or by competing with them.
Familiarity and trust allow employers to let their aspiring employees become vendors or partners. Workers with formal training in entrepreneurship are more likely to show ambition and initiative, and employers are more likely to take a chance with them. While skills are the stepping stones, the teachings of entrepreneurship must flow from the attitude.
Ultimately, it is not the most skilled who make successful entrepreneurs, but those with the desire and ability to venture. Also, it is not those with money to spare, but the ones who attract money to money-making ideas who become entrepreneurs. Achieving the national objective of producing entrepreneurs in large numbers would require the government, the industry and the society to work in tandem. Most importantly, the economic narrative in the country must treat entrepreneurship as an activity for everyone and not as an odd gift.
The writer is Director General, All India Management Association