How will the Upskilling of the Labor Force and Mechanization of the Process affect the Indian Infrastructure Sector?
Technology and innovation are not the sides of the same coin, perhaps an apt comparison would be that they go hand-in-hand. As most imagine technology or innovation is not static, it’s the opposite, it’s dynamic and ever-changing and non-stop. Now more than ever, technology is changing at a rapid rate and rightly so, it is important that we adapt to it or get left behind. This is industry agnostic and is applicable to rapid mechanization in the infrastructure industry, especially in the construction industry.
The Greek philosopher Heraclitus realized this centuries ago as he quoted, “Change is the only constant”.
In a very general sense, good education and proper training would result in a skilled labor market that will
1. Help people develop to their full capacity and seize employment opportunities
2. Raises the productivity of both the workers and the enterprise
3. Contributes to boosting future innovation and development
4. Encourages foreign and domestic investment and hence increases job growth
5. Leads to higher wages
6. Expands labor market opportunities and reduces social inequalities
It is important to note that the working-age (25-59) for developing countries will slowly increase with the increasing population. According to a G20 report,
“… about 90% of India’s workers are employed at low levels of productivity and income. Half of the country’s population over the age of 25 has had no education and an additional third have at best primary schooling. Four out of five new entrants to the workforce have never had any opportunity for skills training.”
Although education standards are increasing every year, the gap between academics and the industry is widening, which causes a reduction in efficiency of the labor workforce hence vastly reducing the profits of the enterprise. If the repercussions of this are considered on a large scale, it could hinder a country’s development and technological advancement.
Streamlining on how this is important to the Infrastructure industry, it is necessary to take a look at the scale of this industry. According to IBEF’s August 2019 report, India is set to become the third-largest construction market globally by 2022 and it will receive an influx of investment approximately worth Rs. 50 trillion ($773 billion). Moreover, the Union Budget of 2019-20 allocated a whopping Rs. 24,000 Lakh Crore to the infrastructure industry.
Additionally, the VC and private sector’s involvement in the industry has also increased, according to the same report; to be precise the equity of the private sector is worth Rs. 46 trillion ($6.3 billion). With a massive influx of money, it is almost certain that innovation also plays a key role, hence it is extremely important for the people working the industry to take their skills up a notch and adapt to the growing industry. For the same purpose, India adopted an ambitious National Skills Development Policy in 2009.
Unlike other industries, it is of utmost importance that labors are skilled in infrastructure and/or production industry due to rapid technological innovation and the involvement of advanced machinery.
1. Skilled labors would be more in-tune with the nature of the job and will be acquainted with the use of machines for particular jobs. Take, for example, a motor grader, one of the most commonly used equipment in road construction, an operator would be required to undergo proper training for an approximate of 3 to 4 years to able to work on it. Training a labor on-work would lead to a reduction in the efficiency of the job as it would take time to teach, it would take a longer time to complete the job, increase overhead costs, reduce productivity, etc.
2. As another example, Backhoe loaders, another popular machinery in the Indian construction scene. Unlike motor graders, this machine requires far less training to be able to operate. Moreover, backhoe loaders are multidimensional and hence used widely in India, learning to operate it would help the worker do more with the machine.
With skilled labors, the construction process becomes
a. More efficient as skilled labors would take full advantage of the machine
b. The efficient use of machines would result in work being completed in less time
c. This would further reduce overhead costs and hence increase profits of the enterprise
d. Overall, it would increase the productivity of the job and result in satisfied consumers and producers.
As mentioned earlier, due to this growing disparity between what is academically taught and what is actually required in the field, the government of India offers training courses to bridge this gap. Programs like National Skill Development Corporation (NSDC) or with the help of the Industrial Training Institute (ITI).