Bridging the Skills Gap

Developing an integrated jobs and skills ecosystem is critical for infrastructure development, says Amrita Chowdhury, Director, Gaia Smart Cities.

Political leaders the world over are considering infrastructure spending as a means for reviving economic potential. Economists have long established a direct link between infrastructure spending and overall economic growth. Oxford Economics and PwC have forecasted that global spending on infrastructure development will be around $78 trillion till 2025.

India is working towards a massive development agenda, encompassing every element within the urban and rural ecosystems ù from road and rail connectivity to ports and airports to Smart City projects and provision of basic services such as water, energy, waste management and sanitation. Finance Minister Arun Jaitley has reiterated that India needs to spend $1.5 trillion over the next 10 years to overcome its infrastructure gap.

The impetus to the economy comes through direct impact to its GDP and indirectly through creating a more competitive and cost-effective ecosystem, which in turn attracts more investment, thereby creating a positive economic cycle. Connectivity and convergence, as envisioned by the government, are key to ensuring that project vision, project financing and project management are aligned across sectors and government department through mechanisms such linked regulatory frameworks, single-window clearances and integrated governance frameworks.

But looking deeper, the economic impetus needs to closely connect and converge with another factor of the economy – labour. Directly, it will impact the creation of more and different forms of livelihoods and, indirectly, it will impact the skills needed to support the new economic agenda.

The jobs ecosystem
The integrated development vision will certainly lead to the creation of new jobs. But it is important to understand what type of jobs will be created and where they will be located.

Direct jobs: The very building of infrastructure will create jobs related to construction and logistics. As an obvious first, these will include all levels of managerial, engineering, operations, labour and support level jobs across all the core industries where infrastructure development is taking place. Next, there will be higher demand for building materials, metals, minerals, construction components ù both low tech and high tech, transportation, and logistics industries, leading to jobs potential in these industries. At the same time, the inclusion of æsmartnessÆ will create jobs requiring specialised IT, security, telecom, data management and smart new technology skills. Indirect Jobs: There is typically a spiralling effect of jobs creation. As infrastructure development happens, more people will be needed to manage, supervise, operate and maintain these services. This service sector jobs growth can in turn spur jobs growth in overall city services.

Location of Jobs: The core government development initiatives such as Smart Cities Mission, Sagarmala project, and HRIDAY focus on physical and network layer infrastructure development across cities and towns. But the other related development programmes ù Swachh Bharat, AMRUT, and Digital India ù can help the surrounding regions to also develop, leading to dispersed jobs creation. This is essential for inclusive growth and for reducing further congestion pressure on over-crowded cities. Shape of Jobs: It is tough to predict the exact rate of jobs growth. But global case studies suggest that large firms contribute a fraction of new jobs created, while the governance of such projects creates an even smaller fraction of jobs within the government and public sectors. However, majority of jobs in an economy will need to be created in small- to medium-size businesses or start-ups. The challenge in India is to move many such businesses from the informal to the formal sector. Further, it is crucial to ensure that the regulatory climate and incentive scheme enable such businesses to scale up.

Infrastructure development and skills training
As the nature, location and shape of jobs in the economy change, triggered by investment in infrastructure development, different skills will be needed.

While India has launched a massive skilling program, it faces many challenges on multiple counts. The current providers have greater focus on social and language training and soft services such as beauty services. But gaps remain. The nature and focus of skills programmes will need to change.

Technical skills: There is a gap in practical training in technical skills such as construction, engineering support, electrical repair, welding, machine tooling and so on. ITIs are offering some programmes but they need to be amplified further. Some start-ups are creating tool stations embedded with virtual reality and online modules that mimic real-life scenarios. This not just makes learning more accessible, but also brings down the cost of training. Consumables used in training can be quite expensive. Only when learners reach a certain skill level would they need to practice with live equipment and materials, bringing down costs. There is need for more high tech start-ups for imparting such skills training. In turn, it creates high-tech jobs for the engineers building such platforms.

Location: Training is often not linked to real jobs, nor is it located close to where people needing the training are. India has traditionally relied on unskilled migrant workers in building and construction. But if the pace of infrastructure development changes, it will be infeasible to rely on massive migration of workers across geographies. Skills development will need geographic dispersion across all states, towns, ports and surrounding regions.

Re-skilling: Workers for the infrastructure sector may come from new entrants to the sector or older building and manufacturing workers who have been re-skilled. As technologies change manufacturing, engineering and construction, there is a need to re-skill or upgrade workers capabilities ù while allowing them to maintain current livelihoods. Skilling programmes will need to include both new and old workers.

In the end, building the infrastructure that India needs requires not just ensuring financial feasibility. We need to ensure operational feasibility, by getting trained workers and managers into the sector, and social feasibility, by ensuring livelihoods for people while giving them the flexibility to either migrate or remain within their native milieus.

About The Author
Amrita Chowdhury is Director, Gaia Smart Cities. She is a business strategist, innovator and author. Chowdhury has led early growth stage businesses in branding, publishing and education and provided strategy consulting and board advisory for major listed clients in USA and Australia. Chowdhury holds seven US patents for semiconductor manufacturing and has authored two books. She holds engineering degrees from IIT Kanpur and UC Berkeley, and an MBA from Carnegie Mellon.