Building a highly skilled workforce is imperative to aid the transformation of Indian manufacturing | To stay competitive in the global market place and create employment opportunities for the country’s young workforce, it is imperative for India to transform its manufacturing sector and thereby the economy. It is observed that developed countries like US, UK, Germany, Japan, South Korea, Israel, Finland, etc. are largely innovation driven economies characterised by high per capita income levels, high standards of living, and various industries with advanced technology and capability to manufacture new and unique products. For India to be counted among these developed countries there needs to be a very competent advanced manufacturing sector.
As per a study done by the Brookings Foundation and McKinsey & Co., the advanced manufacturing industries are those that display above-average R&D spending as a share of total sales and employ a highly skilled workforce in which the average worker is an expert in at least one discrete STEM (Science, Technology, Engineering, Mathematics) field. Primary characteristics of advanced manufacturing industries are – high R&D spend, futuristic technologies, requirement of highly skilled manpower, innovation and productivity.
It is important to note that in India we have very low domestic or indigenous manufacturing capability in all the industries i.e. largely across the bio medical devices industry, heavy machinery (mechanical and electrical) industry and the semiconductor and advanced electronics industries. It is also startling to observe that the only competence we have today in India is in industries like automotive, auto components, consumer goods, basic computer hardware, pharmaceuticals, all of which are being largely driven by private industry and not the public sector.
Developing India’s advanced manufacturing industries will not be easy. Strong challenges from other nations, inconsistent engineering and workforce training systems, absence of a good quality talent ecosystem will continue to haunt us. Moreover, while efforts to develop the advanced manufacturing sector will largely depend on private initiatives, political paralysis at the centre and across states has stalled needed national action on R&D investment, skills-building, taxes, trade and infrastructure.
As a result, at a city/cluster level, the industry and academia will have to take the lead to support innovation, invest in local industry clusters, drive trade, and build the necessary skills base to revamp and build a robust manufacturing sector. A transformational shift is the need of the hour. Also, there is an urgent need for India to build a coherent manufacturing ecosystem comprising value creators in the form of – industry and academia and an effective drive agent/catalyst in the form of government or society at large. In my view, some of the measures that these three value creators should take are:
Industry
- Look beyond “low cost”
- Focus on technology driven innovation
- Increase value addition
- Build or acquire new capabilities
- Engage with academia to develop technical skill development clusters/institutes
Government
- Focus on effective implementation of National Manufacturing Policy
- Encourage public and private sector to together build advanced technical capabilities
- Prioritise indigenisation of key sectors viz. railways, defence, power, etc.
- Accelerate the creation of National Investment and Manufacturing Zones (NIMZs) and industrial corridors
Academia
- Partner with industry to develop state-of-the-art advanced technical and research institutes
- Encourage R&D in alternate elements, material sciences and key emerging technologies
- Strong emphasis on creating intellectual property
The motto should be to, “develop, high technology advanced manufacturing and availability of skilled human resources, as key competitive advantages for India”.
Today, there is a need to focus on advanced manufacturing. These are high-value added sectors which use futuristic technologies, require high R&D spend and drive innovation and productivity in other sectors. This will need a transformational shift. The industry has to move beyond low cost and build or acquire new technologies.
The government has to focus on implementing the National manufacturing policy and prioritise the indeginisation of key sectors like defence, power and railways. It needs to remove bottlenecks and speed up decisions. If we do not latch on to this next revolution now, we will never be able to catch up. This would need a unified approach from the government. We are all looking for change.