Talent Pool in need of Transformation as Countries Look to India as an Anti-China sentiments increase
The reverse migration of migrant labour has left industries scrambling for a reliable workforce but there is another issue that is equally pressing and has severed another limb for manufacturers – lack of adequate skills demanded by the jobs.
As is pretty evident from the above infographic, Talent and Digitization are 2 areas of concern that will be impactful to the manufacturing industry and will start showing their impact in the near future.
The global sentiment with regards to China post the COVID-onslaught is increasingly negative and piling on. USA’s relationship with India and China is at the cusp of change and undergoing rapid transformation as the days go by. So the question emerges – if China is losing its coveted spot as the global manufacturing hub, who is the next front runner for the spot?
In FY 20, USA imported a behemoth $ 452 billion worth of goods from China! Only 5 countries within the low-cost bracket have a GDP larger than that – India, Mexico, Indonesia, Brazil and Thailand. The largest of the 5 is India and has the largest volume of unutilized & skilled talent. The exodus from China has created a supply chain vacuum among all other countries banking upon it which India is currently in a position to fill.
The answer is India. In one of our previous posts we talked about how ‘hyperlocal’ is driving the market today and about the two major deals that led two giants to pump money into India. One of them was Facebook’s mega investment to the tune of USD 5.7 billion in the Indian telecom mammoth Reliance Jio. Deals of that scale are well placed to trigger job creation, infrastructure development and capacity enhancements in a vast number of Indian manufacturing facilities.
If you’re looking for a good reason to believe why India will bridge this gap, here are some glamorous examples from across industries:
- Fabrication of the cabin for Marine One, the US presidential helicopter, has been carried out by Lockheed Martin in the Sikorsky Unit in India.
- The Ford EcoSport catering to the USA market is entirely manufactured in Chennai, India.
- NASA’s most capital intensive imaging satellite to ever be launched, the NISAR, is being made in collaboration with India’s ISRO. It will be built as well as launched in India.
- 3.2 million Apple iPhones were built in India for exports.
- ~40% of the generic pharmaceuticals sold in USA are produced in India with USFDA approval.
Harvard business experts who covered this research called this phenomenon “India Inside” – meaning Indian products although away from the limelight, are load bearing pillars of the US economy.
Moreover, in the COVID pandemic period, the global demand for drugs & disposables to battle the virus is enormous. India has the potential to scale up volume production on war footing basis to gain the advantage from the severe deficit. The honourable PM’s Make In India Mission is in the right place at the right time to capitalize on this opportunity.
The above listed factoids indicate that India has the potential to be the gunner for the top spot of global supplier in the Aviation, Automotive, Electronics, Technology & Engineering, Pharma & Healthcare and several other ancillary industries. It is only a matter a time before the competition gives in.
But are we ready yet?
The following observation noted by Deloitte analysis is quite the eye opener. A stark indication that our readiness levels are rusty and in dire need of up-skilling of the workforce at our disposal.
What exactly is the need of the hour then?
Disruption in Manufacturing – Technology Driven, Intelligent & Agile Enterprises:
Once driven by operational excellence and cost reduction strategies as key differentiators, this sector is witnessing dramatic changes propelled by technology. Some of the prominent fuels of change visible clearly in the mist of COVID-19 are big data, mobility, IoT (Internet of Things), AI & Machine Learning. With the advent of digitizing mechanisms such as these, analysis of a mega pile of data is leading to the creation of even new business models.
Secondly, innovation has hastened its pace and lengthened its stride. Competition from firms adopting these emerging technologies to their processes, products and services are making fearsome contenders for existing players. To survive the race, this healthy competition is pushing all runners to sock up and race harder.
Thirdly, as manufacturers battle with new-age advancements, there is a rising need to restructure their traditionally linear value chains. Businesses are gradually metamorphosing from a B-B model (Business to Business) to B-B-C model (Business to Business to Consumer) thus sparking the need to build a value chain that is a symbiotic & integrated ecosystem.
What does it mean for jobs in the future?
As business navigate these ever-changing waters there are far reaching repercussions expected across several associated industries and segments. Let’s take an example: The finished product of any automobile industry is a vehicle that converges four other industries viz. insurance, infotainment & smart city services & navigation. (many more but these are easy to spot prima facie) Another similar example is the unison of aircraft manufacturers, airlines, airports and the business that enable them to function in synergy – all combined into one marketplace.
Integration and intelligence will continue to drive business models, finely tweaking them each time as consumers alter their behaviour respectively. Design changes to products and processes are set to mirror & service consumer needs and, each will need a brain behind the brainchild. Here’s where skilling up is key in preparation for what the future will offer soon.
At the behest of all the cognizable changes listed above 3 skills can be vividly spotted over the horizon – CNC Programming, Machine Learning & Computer Aided Design (CAD). All three are essential for creating & implementing automation as products and processes evolve.
Data suggests that manufacturers are facing a major flak with reduced labour while the labour that is available hyperlocally lacks the requisite skills to push the manufacturing through.
As much as we scream boycott China, and have the sentiments, we have to tread carefully & smartly investing in the right places for a long term impact and not a short term emotional outburst!
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Voracious reading regimes coupled with a penchant for writing led me away from a glamorous yet mundane corporate career. When nobody's calling, the mountains always are - you'll invariably find me atop one.