Facing Up India's Unemployment Problem
I didn't write for almost three weeks as I was in India. The essence of my work there is to deal with employment creation. Part of my work is pro-bono - a city initiative focused on Industry 4.0 - and the other part is commercial, advising a large Indian corporation on the development of next-generation Skills training programmes. But the sense of crisis regarding unemployment cuts across scale and scope of my work and is a recurrent theme that pops up everywhere.
Indeed, these strategies are not parallel tracks but are being pursued simultaneously. However, more is not necessarily better, and the lack of thought and reflection in launching and implementing these policies has really made the problem worse. My comments above are meant to highlight some of the challenges but perhaps it is plain to see that the underlying problems stem from just a few things: India's bureaucratic culture, its broken education system, its inadequate physical and human infrastructure and its complex rules. Tellingly, all the solutions discussed here are designed from the above and nothing worthwhile has emerged from the public.
This is indeed a hard thing to change, but if it's not changed, India will soon be in the thrall of a Donald Trump solution: Breaking the Free Trade consensus that has been driving policy-making since the 1990s and reversing some of the Trade Liberalisation initiatives. This seems most unlikely at this moment - India has been a big beneficiary of global trade - but this would be easily achieved in the event of a global trade war and if the magical benefits of IT Services industry are to vanish overnight. However, the rewards of going down this route will be quite limited - most of India's industries are already protected - but that makes India even more vulnerable to catch the current global cold of trade restrictions quickly.
Taking that route would be unfortunate, as it would really give an illusion of a solution instead of a real one. But, if the unemployment persists and grows, a reversal of liberalisation would be very likely. Hence, one must start exploring alternatives, and my feeling is that the real strategies will need decisive breaking of the mould. It has to start with a break with the bureaucratic culture and empowering the people in general; letting go of omnibus schemes which the Indian government is so fond of, and encouraging more local strategy making. This would need a comprehensive liberalisation of India's Higher and Skills Education that will introduce variety and imagination in the sector, alongside decisive public investment in primary and secondary education, and, most importantly, in Healthcare. And, finally, this will need a complete rebooting of India's trade policies - it is incomprehensible why India trades so little in its immediate neighbourhood while wanting to build a world-class manufacturing Industry - which will need policy foresight and political courage in equal measure.