Development of human capital

Skilled and cost-effective manpower is

an essential component of success in the
manufacturing industry. Shortage of the
same can prevent India from gaining a
competitive edge in global markets.
Measures to build a strong pool of workers equipped to meet the diverse needs of the upcoming
sectors and new technologies in manufacturing must be taken. Development of human capital is
a dynamic process and can have a gestation period of up to a generation.
Forecasting employment needs:
The first step must be to forecast the road that manufacturing will take. Which sectors would it
expand into and which technologies would be important in the future. The question to ask would
be how India can leverage its strengths and resources to achieve a competitive edge in these
areas. Moreover, what weaknesses need to be dealt with and what kind of skills will be required.
An estimate of the number of jobs to be created and the skill requirement for each job profile can
help direct the course of a human development strategy.
Some indicators of the future of manufacturing needs are available. The manufacturing sector is
estimated to have a US$ 180-billion investment opportunity over the next five years, according
to the Investment Commission of India.1 Meanwhile, the Indian manufacturing sector is
estimated to command a market capitalization of $520 billion by 2014-15, as against $272 billion
as of Sept. 30, 2007, said a study on the sector by the Confederation of Indian Industry and the
Boston Consulting Group.3 Outsourcing of manufacturing jobs to India would result in the
creation of 30 million jobs by 2015.4 Sectors that will experience tremendous growth include
machine tools, automobile components, pharmaceuticals and the textile sector, which alone is
expected to create between nine and 10 million new jobs over the next four years.5
National Skill Development Mission:
The Planning Commission set up a National Skill
Development Mission (NSDM) in 2007 headed by the
Prime Minister Dr. Manmohan Singh. The NSDM
proposes to consist of four sub-missions industrial
training, polytechnics, vocationalisation of secondary
education, and another for the unorganized sector each
catering to different streams of workforce entrants to train
more than 10 million people every year.3 The government has projected that 70 million jobs will
be created during the 11th Plan (2007-12) and proposes to spend Rs31,000 crore during that
period.6

To effectively channelize resources, the future of the manufacturing industry must be looked
into. The right kind of training must be imparted to match employment needs of the industry and
the availability of skilled workforce. This would require extensive market research, study of
trends in the manufacturing sector and consultation with industry experts.
Development of Labor Intensive industries:
Manufacturing industry in India currently employs only 11% of the workforce.7 The world over,
manufacturing forms a major employer in most economies. In India however, it has lagged
behind. In fact the share of manufacturing in India has been more or less stagnant or has even
decreased in the last few decades.
India being a labor rich economy must look to the manufacturing sector for its employment
needs especially in light of the jobless growth in the growth driver services sector. Moreover,
as the displaced workers from agriculture and related activities move to urban areas, the need for
creating employment would only increase.
Creating Skill base:

Industrial training programs, introduction of vocational training and other courses at

Polytechnics and development of a large number of educational and training institutions should
be prioritized. Moreover, to further develop a competitive edge in manufacture of cheap
consumer goods such as alarm clocks, decorative items, etc currently the niche of Chinese
manufacturing would require the availability of a large amount of cheap labor with basic
school education and some level of skills. A push towards expanding literacy at all levels along
with basic vocational training would be of immense help. Public-private initiatives in this
direction would help speed up the process.
References:
1. http://www.ibef.org/economy/manufacturing.aspx
2. http://www.automationworld.com/webonly-3807
3. http://www.allbusiness.com/labor-employment/labor-sector-performance/6257213-1.html

4. http://www.allbusiness.com/manufacturing/computer-electronic-productmanufacturing/1182849-1.html
5. http://www.indianexpress.com/news/pm-unveils-manpower-training-mission/210653/
6. http://www.livemint.com/2008/02/04000156/Budget-821709-Rs31000-cr.html
7. http://money.cnn.com/2007/10/18/news/international/India_manufacturing.fortune/index.
htm