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How digitalization is changing the workforce

By Eileen Singh February 12, 2020

Digitalization and the fourth industrial revolution are changing production industries with unparalleled speed and scale. Influenced by a series of micro and macro-level advancements and disruptions, global value chains are being reconfigured. On a micro level, electronics and automation are changing the face of nearly every industry. According to one report, more than 25 percent of jobs in the U.S. are experiencing high levels of disruption due to automation.

On a macro level, this is significantly affecting workers and the types of skills required in industries ranging from textiles to chemicals and automotive. This is leading to unprecedented workforce interruptions — and opportunities. Those in the digital world can step in and benefit at jobs previously only given to skilled labor workers, for example.

However, according to experts and their research, there’s a notable “mismatch” in several production jobs. The problem lies in the speed of technology development, with the most sought-after skills seemingly the most challenging to come by. For example, a production laborer or factory worker must now often have an engineering degree in computer sciences to truly succeed.

As we move further into the fourth industrial revolution, the demand for highly skilled professionals is quickly surpassing that of low-skill workers. And although the demand for highly skilled professionals exceeds supply, wage growth slow based on several recent studies.

This is creating a distinctive kind of employment challenge for companies that want to stimulate growth and elevate their production workforce.

Jobs in consumer electronics
To help build a constructive public-private conversation about how to meet the challenges inherent in these shifts, a few researchers in India have attempted to quantify the impact on business, government, and industry. One aim is to set the stage for multi-stakeholder discussions and engagement around the societal issues that arise from technology and the reshaping of production value chains.

It’s believed that the importance of the situation requires an institutionalized dialogue and new ways of obtaining solutions and education that put people first.

One promising finding: Employment in the consumer electronics industry (ACE) can jump 62 percent over the next five-six years if India can achieve higher levels of localization in production. In other words, if India can domestically produce more components used in electronic appliances, it could operate far more effectively than it currently does. A more effective industry means more effective and productive jobs.

Much of the critical elements that go into electronic devices are currently imported from Korea, China, Malaysia, Taiwan, Thailand, Vietnam, and Japan. The ACE industry presently employs about 2.5 lakh people (this is across five products, including air conditioners, washing machines, refrigerators, television, and audio).

A Frost & Sullivan-CEAMA analysis states that employees can grow to 3.6 lakh by 2024/25 with the contemporary state of localization and to over four lakh if the Make in India initiative gets successfully accomplishment. This initiative encourages companies to manufacture their products in India, particularly in the electronics sector.  This includes components such as main door panel for refrigerators, compressors for air conditioners, motor and printed circuit board (PCB), or controllers that are utilized in a variety of devices.

This evaluation of employment in the ACE industry, however, cuts across manufacturing, marketing, sales, operations, and strategy as well as installation and support purposes. Often, far more jobs are created in maintenance and after-sales service than in manufacturing directly. In air conditioners, for example, manufacturing just employs 18,000 today while placing and after-sales service employ double the number at 38,460.

Elevated levels of localization by 2024/25 will take the manufacturing employment to 41,110 and will provide jobs for more in after-sales support — at about 66,540. Furthermore, in television, the manufacturing employment now is about 14,400 and can potentially grow to 40,380 with more powerful localization in 2024/25. This product category now employs 40,000 in installation and after-sales service today and it could grow to 56,080 in six years.

“Majority of compressors are introduced, and it accounts for 23 percent of EBOM (engineering bill of materials) in room air conditioners,” the Frost & Sullivan-CEAMA study asserts. “Local generation from Highly Electrical Appliances India Private Limited meets less than 5 percent of the market as most of its production is exported.

GMCC is setting up its first manufacturing equipment for compressors outside China in India, found at Supa, Pune district. If these local manufacturers can match the quality parameters, it is likely that OEMs will begin sourcing domestically,” it adds.

Similarly, in the case of PCB, current interest is mostly met by Chinese imports. “Many companies favor to source PCBA (printed circuit board assembly) from their global position, majorly from China. However, if laminate production and design activities are moved to India, the whole PCBA value chain can be improved,” the report says.

The key, however, is ensuring those with enough talent and knowledge in technology are trained and available.


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