India's growth model is quietly severing the link between investment and employment, said K Yatish Rajawat, Co-founder of Hundred Million Jobs, a non-profit initiative to create 100 million net jobs in India over the next decade.
Capital is no longer creating jobs at scale, he said, at TechSparks, YourStory's flagship tech-startup summit.
The employment problem is different across cities, be it Delhi, Mumbai or Bengaluru, he observed. In Bengaluru, for instance, the debate is often around AI and its impact on jobs.
The damage began roughly a decade ago on the factory floors, driven by automation, he opined. Even a firm with a turnover of Rs 10 crore or Rs 50 crore now has robots, he said, and the machines are constantly evolving and getting better. They no longer simply move a widget from one point to another. They respond to their surroundings, and handle a range of materials, including cloth and paper, not just sheet metal, said Rajawat.
Even labour-intensive work such as welding and forging has been impacted due to automation, he said. He expects services to follow suit.
Referring to a book by Nobel Prize winners and MIT professors, Daron Acemoglu and Simon Johnson, Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity, Rajawat said while technology eventually adds jobs, it does so with a lag.
The people who lose work, he argued, are rarely the ones who gain from the new roles being created. While someone in their twenties may adapt to the shift, an employee in their forties or fifties is unlikely to do so, he added.
Trends reshaping the economy
Rajawat identified three trends reshaping the economy.
The old formula, wherein Rs 100 crore of investment generates around 10,000 jobs, no longer holds. Plants manufacturing mobile phone and electric vehicles are heavily automated, he said, and incentive schemes such as the production-linked incentive (PLI) are tied to capital rather than employment.
The second trend is the impact of AI and automation. AI is already affecting white-collar work across sectors, while MSMEs, which he called the country's largest job engine, are also losing jobs to automation.
The third, which, he said, gets too little attention, is platform consolidation.
Rajawat argued that dominant ecommerce and social media platforms hold consumer data, which new entrepreneurs need, and this kind of monopoly prevents new businesses from succeeding. If entrepreneurship stalls, so does job creation, he said.
What Hundred Million Jobs is doing
Hundred Million Jobs works on ground projects, research, and advocacy across the country.
A consortium of six companies is helping the Rajasthan government turn its skilling mission into a jobs mission, on the premise that skilling is an input and jobs are the output that matters. In Kolhapur, the non-profit body is working with foundry and die-casting units to cut energy costs by shifting to renewables so that firms can compete, export and hire.
On the legal front, Hundred Million Jobs has formed a working group with sitting and former high court and Supreme Court judges. It is also planning a pilot with a high court to clear case backlog in a particular district using technology. Rajawat said slow enforcement of contracts and patents leaves solo entrepreneurs defenceless against large clients who do not pay.
The initiative is also lobbying for changes to data-ownership laws and for MSMEs to receive the same recognition as tech startups in entrepreneurship awards.
Rajawat also said Hundred Million Jobs has urged the skilling ministry to recognise displaced workers as a category needing support. And he wants the market, not the state, to provide support.
"Some of you should set up a company which does reskilling of displaced workers," he told the audience, calling it both a business opportunity and a way to create jobs.