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Business News/ Technology / Tech-news/  Preparing millennials for the age of automation

Preparing millennials for the age of automation

India can create enough new jobs to offset automation and employ new entrants into the workforce, if it makes the required investments

Even as technology substitutes some forms of work, new types of work will be created. Photo: Aalok Soni/HTPremium
Even as technology substitutes some forms of work, new types of work will be created. Photo: Aalok Soni/HT

A lip-reading system more proficient than a professional human lip-reader. An artificial intelligence (AI) system that can diagnose pneumonia from chest X-rays better than expert radiologists. These are just two real examples of how machine intelligence seems primed to substitute work activities that currently only humans can do. Looking ahead as technology progresses faster and faster, will human intelligence still be a useful resource? Will there really be enough work for humans to perform?

Some predict these technological trends to be catastrophic, culminating in mass unemployment. But our analysis suggest that the future of work can hold opportunity and the promise of more and better work—provided investment steps up, enabling growth in productivity, and the nation simultaneously gears up for workforce skill transitions.

First, it should be understood that not all human activities are easily automatable based on currently proven technologies. McKinsey Global Institute’s (MGI’s) analysis of more than 2,000 work activities across more than 800 occupations shows that automatable tasks include those done in predictable and structured environments, or involving routine data collection and data processing. But other activities will be much less susceptible to automation, such as managing teams, solving non-routine problems, and interfacing with stakeholders in unpredictable situations. Overall, about 30% of the time spent in most occupations could be technically automated—but in only about 5% of occupations are nearly all activities automatable. The pace at which automation will be adopted depends on several factors besides technical feasibility. Among these are the cost of technology deployment, workforce quality and wages, and the benefits of technology beyond reducing cost—for example, as a spur to innovation or quality.

Moreover, even as technology substitutes some forms of work, new types of work will be created—and this is not a new phenomenon. The introduction of the automobile created almost 7 million net new jobs in the US between 1910 and 1950, based on our estimates. It displaced workers who manufactured wagons, carriages, harnesses and saddles, as well as horse breeders and metal workers. But it created ten times as many jobs, in a host of new occupations: for workers in automotive supply chain, warehouses and logistics, auto dealerships, auto repair, gas stations, and convenience stores, amongst others.

Jobs of the future

Given the interplay of all these factors, it is difficult to make predictions, but possible to develop scenarios. Our analysis suggests that in India the growth in demand for work, barring extreme scenarios, could more than offset the number of jobs lost to automation. On jobs lost, we find that some 9% of India’s current work activity hours could be automated by 2030 in a “midpoint" automation adoption scenario, and up to 19% in the “rapid" adoption scenario. But, India can, in fact, create enough new jobs to offset automation and employ new entrants, if it undertakes the investments required. Most occupational categories have the potential to grow as India’s economy expands. As many as 100 million new jobs could be created for Indians—net of automation—if the country’s rising prosperity creates demand for construction, retail, and healthcare and education services, and therefore, jobs.

So, which job categories have most potential to grow? Our estimates suggest potential for substantial net job growth in all sectors barring agriculture. The blockbuster occupations of the future for India, based on our estimates, include:

Builders: India could see demand for an incremental 60 million workers in building and construction activities by 2030, assuming higher rates of investment in infrastructure, and residential and commercial construction. This means more jobs for architects, surveyors, engineers, electricians, carpenters, plumbers and construction labourers.

Customer interaction and creatives: Demand for retail salespeople, food preparers and handlers, artists, designers, entertainers, and similar categories of workers engaged in consumer interactions and activities, could rise by 23 million by 2030, as higher incomes create more consumption, with people shopping, travelling, eating out, and engaging in recreational activities.

Care providers: The future could see an explosion of demand for workers in healthcare services, to the tune of 13 million workers by 2030 in India. This is driven partly by global aging: spending on hospital care for an 85-year-old American is more than five times higher than for those 19 to 44 years old. Shifting demographics could create incremental demand for 51 million to 83 million workers globally such as home health aides, personal care aides, and nursing assistants. Much of the new demand will come from aging economies, such as Japan, China, or Germany, but India could export a trained healthcare workforce and will also face rising demand for their own healthcare needs.

Educators: Overall this category could see a rise in incremental jobs of 8 million to 9 million by 2030 in India. Teachers and trainers will see a significant increase in demand, especially if countries with young populations and the knowledge economy grow. Demand for early childhood educators will grow as women enter the workforce in greater numbers and more childcare is shifted to paid providers.

Tech professionals: India could create up to 1.2 million incremental jobs for tech professionals by 2030. We estimate higher global spending on technology products and services by consumers and businesses to the tune of $1.7 trillion to $2 trillion by 2030. This could create demand for 20 million to 46 million incremental tech workers globally—from software engineers and electrical engineers to web developers and non-technology support staff. The largest share of global tech jobs will land in China and India.

Action needed

The jobs of the future will not materialize without actions to sustain high growth. India will need a vibrant private sector to start and scale up businesses, if it is to create gainful jobs with the income-earning potential that its people desperately need. Policymakers will have to work with the private sector to stimulate investment, through strategies tailored for various sectors of the economy. The greatest focus will have to be on sectors that enable India’s labour force to transition out of agriculture, to jobs in construction, transport, trade, hospitality, healthcare, education and even manufacturing.

To attract investment, India needs to double down on creating public goods that support investments in key sectors, for example, industrial clusters with tailored infrastructure for clusters of businesses in manufacturing, financial services, education, medical services, or technology. One way is to accelerate Sagarmala, the port-based industrialization project, that envisages 14 coastal economic zones, or production clusters, with affordable housing, connected to ports and the hinterland through an efficient multimodal logistics networks, and with an enabling regulatory framework. A similar approach can work for tourism: creating circuits of tourist attractions, supplemented by hotels, restaurants, and recreational activities, connected by road, rail, and air links with reliable power, water and sanitation, and local workers trained to meet tourists’ demand for goods and services. Bold approaches would be required to implement such clusters and circuits—for example through special-purpose vehicles empowered to cut through government silos and accountable for specific outcomes.

Skills that matter

But even assuming the jobs are there, will India’s workforce be equipped to perform them? The jobs of the future will be more skill-intensive. The need for functional digital literacy will increase across the board. For example, delivery persons need to use apps to navigate their way around the city, and shop-floor workers will need to manage precision control systems. Automation will also spur growth in demand for higher cognitive skills, particularly critical thinking, creativity, and complex information processing. Demand for social and emotional skills, such as communication and empathy, will grow almost as fast as cognitive skills, and workplaces will become more diverse as different profiles of talent come on-board. Demand for physical and manual skills will decline, although these will remain the single largest category of workforce skills in 2030. Individuals will need to constantly learn and relearn marketable new skills throughout their life time—a critical and central challenge.

Already, work is fissuring. The trend towards outsourcing has already gained momentum over the past decades affecting support functions like accounting and human resources, and manual activities like facilities management and security. As businesses become more and more focused on core competencies, they will shed activities closer and closer to the core. The rapid rise of digital “on-demand" or “sharing economy" work platforms in the US, such as TaskRabbit, Upwork,, is testament to what we will see in India.

In a significant uptick, independent work will become more organized, more decent. The future of work may not hold full-time contractual jobs for all Indians, but it holds the promise of more gainful and decent work for many independent workers—delivery persons, cab drivers, self-employed snack food makers, contractual cleaners, to name just a few. These workers typically have a high degree of autonomy—they decide how much they work, and are paid for the tasks they perform or the output they produce rather than receiving fixed salaries against secure job contracts. As they become part of more organized, digitized value chains, independent workers will adopt systems that keep track of the work they do, use productivity tools, get training opportunities, and sometimes even benefits like subsidized healthcare or life insurance. A bathroom cleaner now has the chance to be a facilities manager of a franchise business (public toilets, in this case), with the discipline and formalization that comes from being part of an organized business.

Besides, a very positive outcome of such transformations would be that workplaces will become more diverse. Women hold just 25% of entry-level jobs in Indian firms compared to 45-50% in the Asia-Pacific region, by our survey, and shockingly only 4% of senior management jobs, compared to 11-13% in Indonesia and China, and up to 25 to 33% in Singapore and the Philippines. This could change, and quickly. More Indian women want to stay in work through life stages like marriage and maternity. Multinational companies and global value chains are influencing local firms to promote diversity. The demand for skills, like collaboration and teamwork, will make it imperative to recruit from diverse talent pools and normalize “flex" at work. The future of work in India may look decidedly female.

Finally, as India’s labour force grows by 138 million people by 2030, it will be challenging to prepare new entrants for quality jobs of the future that require higher skills. Many of India’s schools, higher educational institutions, and skilling ecosystems are not geared up to this challenge. Much greater collaboration between the public and private sectors will be critical to bridge the gulf between what is taught in classrooms and what employers expect. Students will need early exposure to problem-solving, STEM (science, technology, engineering, and mathematics), and data sciences to adjust to a data-driven and experimentation-oriented world. Countries like Estonia and the UK have introduced coding classes as early as age five or seven, in response to this. And alongside this, we will also need to focus on building soft skills, like communication and teamwork, important for the “new collar" jobs of the future.

In India, as around the world, there is no time to lose. We need creative visions to prepare for a world where the meaning of work is shifting rapidly—and the skills in demand rising exponentially. The risk we must prepare for is not just the dearth of jobs, but more likely the scarcity of skills that the future of work will demand.

Anu Madgavkar is a partner with the McKinsey Global Institute.

This is the first in a six-part year-end series to rethink work and life around us.

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Published: 17 Dec 2018, 10:55 AM IST
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