​This is an audio transcript of The Morning Brief podcast episode: Industry 4.0: Enterprise vs Employee?​

BG 0:02
Welcome to the Morning Brief from the economic times.

Kiran Somwanshi 0:10
Last week on the podcast, my colleague Keltner and I explored what this new automation revolution is all about, and how AI and machine learning are truly changing the face of the industrial economy.

Kalpana Pathak 0:23
But an important part of this revolution or industry 4.0 is its impact on the workforce, either in the form of need for rescaling or redundance.

Kiran Somwanshi 0:33
Also the whole aspect of increasing participation of women in the workforce,

Kalpana Pathak 0:38
and that smarter manufacturing mean cheaper goods for you and me as consumers.

Kiran Somwanshi 0:43
All this and more is what we probe in today's episode with Dr. Ranjit Datte founder and CO CEO of Wipro party, provider of automation solutions, and Sunil C, CEO of TeamLease. Digital, one of the largest employment platforms.

Kalpana Pathak 1:00
It's Thursday, November 10. From the economic times I'm Kalpana Pathak

Kiran Somwanshi 1:04
and I'm Kiran Somwanshi and today on the morning brief, we decode the impact of industry 4.0 on employment and consumers.

Kalpana Pathak 1:15
According to NASSCOM report, more than two thirds of Indian manufacturers are estimated to embrace digital transformation by 2025. Indian manufacturing was expected to spend close to $6.5 billion on industry 4.0 In FY 21.

Kiran Somwanshi 1:31
So what does this rapid pace of digital adoption mean for a country like India, which has nearly 440 million workforce,

Kalpana Pathak 1:40
I asked this to Dr Datte of Wipro PARI and he tells me that more automation in fact, means more jobs,

Dr Ranjit Datte 1:47
that particular job is gone, it is no longer exists, it gets replaced by other value chain that is either about managing the manufacturing operations, using automated production lines, or maintenance on the equipment side the design and engineering the equipment itself and automating the manufacturing process. So it gets more into the higher skill levels of employment. And more importantly, when you become efficient. And when you become competitive, your business grows. And that actually is a huge employment driver. Because now your business itself is growing. There was a seminal MIT study MIT from the US, which correlated the data between the use of automation and the jobs in the region. And there was always a positive correlation. That means more automation meant more jobs. So it is not intuitive, but absolutely a proven fact that in the long term, the use of automation and technologies that improve efficiency actually are improving the employment scenario.

Kiran Somwanshi 2:51
So in the long term, the employment prospects look great with industry 4.0. But what about the pain in the short term, as Sunil of TeamLease Digital tells me the nature of jobs is set to change.

Sunil C 3:03
The industry 4.0 Revolution definitely will lead to some job losses at the lower end, but they will be replaced by some higher order jobs, which are mostly technology kind of a job as per our estimate. In the next few years. Let's say five to 10 years there are close to 1 million new jobs which will be created in the tech space in the non tech industry.

Kalpana Pathak 3:28
But given what happens to the blue collar workforce due to automation and digitalization,

Kiran Somwanshi 3:34
Kalpana Sunil has an answer for that as well

Sunil C 3:37
see the blue collar workforce have got a standard training program which the industry themselves are imparting, to make them ready to do different kinds of roles, you know, some of the roles definitely will get eliminated with the industry 4.0 revolution but that does not eliminate the job of a person. It just moves the person from the mundane job to productivity enhanced roles. So there is a training program happening across the industries to upskill them.

Kalpana Pathak 4:08
So upskilling and rescaling is the key here. After all, Kiran, we print journalists have also rescaled ourselves to be podcasters

Kiran Somwanshi 4:15
yes, indeed, it has been a steep learning curve, but rewarding one. So Dr Datte How do you view rescaling?

Dr Ranjit Datte 4:21
You use the word rescaling? And that is actually one of the extremely important parts of this game right that essentially when we are talking about the employment actually improving but somewhere else, right? That basically means that the people need to get skilled of what that other opportunity is, and therefore in the areas of automation and industry. 4.0 Wipro PARI has been instrumental in working through the university system and the colleges to actually train the upcoming engineers in these new technologies. So that is a key part of course requirement in the marketplace is going to be order of magnitude more than this. And indeed, this is an area where it will A lot of rescaling will be required starting from the operators being able to use the advanced technologies and computer controls and automation and robots and so on to the people who are engineering and designing these automated manufacturing processes and programming the systems that make them work and actually a much higher value job then presently doing the physical manufacturing operation themselves. Right,

Kalpana Pathak 5:23
we spoke to V Venketanarayan whose digital transformation leader of manufacturing at Dr. Reddys laboratories to find out how easy or difficult it was actually to rescale the workforce.

V Venkatanarayan 5:35
So we first of all chose and picked up very, very carefully people from existing employees from various departments and worked on them on a wide variety of what we considered as essential skills, we imported them selective training depending on their backgrounds. So we taught them a lot of basics of digitalization and many more aspects because what we wanted was that the business translators should be multifaceted multi skilled personality who can bring together various insights and put them all onto a digital platform. So we gave them interpersonal skills and project management skills too we have them exposure to various technologies that fall under the fourth industrial revolution. So they have become experts at identifying what is needing improvement in the physical world, taking it to the digital world, solving it in the digital world. And bringing those recommendations back into the physical world for implementation. Our efforts have been very fruitful, I should say we already have three batches of DNA business translators already and more are in the making,

Kiran Somwanshi 6:32
while rescaling is important, it is not quite easy. Sunil elaborates on the challenges in addressing the skill gap,

Sunil C 6:38
the technologies are changing very fast. And most of the organizations require people as of yesterday, because you realize that there is a technology change or there is a digitalization, which you have embarked on, and you need immediate talent. But unfortunately, the available talent in the market are not readily usable or readily employable, there is a skill gap. So that's one of the biggest problem which we face today. And to address this, we also try to train them and deploy them. But that means that you will have to get the requirements in advance so that you can prepare a pipeline, hire them train and deploy. But that's not a practical solution on an ongoing basis, because as I explained, you always need that talent as of now. So that's one challenge what we face

Kiran Somwanshi 7:27
when you talk about we train and we kind of rescale them, basically, who bears this cost of training and rescaling. So if today a job seeker is wanting to kind of get a job, and he's not skilled, is the company really concerned about getting it or our players like you are doing that that role or is the person basically has to fend around and spend money and get the talent How is it

Sunil C 7:50
there are multiple models available in the high trend deploy in one of the models TeamLease digital, which is the substrate of timless, we pay the required funds or money to upskill them, because when they are getting upskill, there are two kinds of investments which are required. One is we need to pay the salary to the person. At the same time, we also need to foot the bill for upskilling. So both these charges are borne by Teamlease. And once we place the person after getting trained, obviously, we make better returns at the same time, the employee also gets a higher salary because he is moved to the next higher level skill. So that's one model. The second model is that you know, where companies collaborate with TeamLease. And they share a curriculum and they also share the expenses together. So in either case, we don't pass on any of these expenses to the candidate or the employee,

Kiran Somwanshi 8:47
how much is typically the cost of rescaling training. So if we could kind of know capture that

Sunil C 8:53
it's difficult to give a number because different programs or different skill upgradation programs have got different cost, you know, some of the skills are very 15 Day skill, you know, you need to just upskill them for 15 days because they have a basic skill and you just need to fine tune and upskill them It's a 15 day program and after that they can be placed some of them are one month some are 45 days and we also have done two months and three months upskilling So, for each of these the costs are different, I will not be able to put a number to it because the costs are spread from 20,000 to one lakh.

Kalpana Pathak 9:30
The aspect of increased salary for the skilled worker is a point we also heard from someone on the ground, listen into Amit Kamath, head of operations at Allcargo logistics,

Amit Kamath 9:40
the introduction of the E commerce into the logistics industry. So we need to upskill our workforce to handle that kind of volume using the handheld terminals. So these handheld terminals are something similar to the mobiles and then they have to do the transaction through using this HT terminals only. This requires the complete training of the various Is processes which needs to be followed strictly and then we have to train these people and within say one week's time actually, because due to the during that big billion day or the great Indian sale, so, our manpower in count increasing from say 100 to 300 kind of thing in this one week's time actually, so, we need to develop a training shedule for them, so, that they can get trained within the seven days time and then start delivering the result from the eight day onwards kind of thing. So, that is one thing, which is quite important for us to train the all the people in our organization. And then we have the dedicated trainers available at the various warehouses to train the team who are really join and then we train them on all these kinds of software. So, we need to upgrade the skills of the labour as well as our staff also. And then with increase in skill set, their salary levels are also going up actually earlier, any metal handling operator used to get around 15,000 or 18,000 rupees per month with this kind of skill set increases with them that salary increase up to 25,000 as high. So it is a win win for both of us actually,

Kiran Somwanshi 11:02
we typically hear of rescaling especially in the case of tech jobs. But Sunil busted this myth.

Sunil C 11:08
IT sector is a misnomer in the future with the industry for revolution coming in, every company will out tech employment. So I'm replacing it sector with you know, tech jobs, tech jobs are going to be across, there are 6 million new tech jobs which are going to be created between it and rest of the industries. So people earlier who were comfortable doing their jobs without any technology usesage are actually upskilling themselves and trying to come into this sector so that they can get better wages. And the best example of this is that, you know, the EdTech registrations if you see from the tech companies, it's just not the techies who are picking up the technology courses. It is a large portion of non tech people who are picking up courses earlier, only engineering graduates were expected to come into technology, but that is not going to give me enough supply chain to fulfill the 6 million jobs which are going to get created in the near future. So even graduates from commerce, science and other sectors are also upskilling themselves through various ad tech courses and online universities and then coming into higher wage jobs. So that's the change in the overall talent landscape, which we are witnessing and it's a good sign because this will mean that you know, the next generation are ready to embrace the technological changes and be ready to fill the demand supply gap.

Kalpana Pathak 12:38
Dr. Dotte I hope women will also be bridging this demand supply gap.

Dr Ranjit Datte 12:43
Absolutely. You know, as a matter of fact, if you see even the industry today in India, right, because India also went through this transformation about higher level of automation and automated manufacturing processes. Right. Therefore, all of a sudden so many of the industries could commit to saying that, you know, at least 50% or some in some industries that I know 100% of their workforce is women, right? And that is actually possible because now it requires more cerebral skills as opposed to physical skills to actually be able to do the job. And now of course that takes away any kind of a disadvantage that women might have in terms of being able to do that job.

Kiran Somwanshi 13:22
women's participation in the Indian labour force declined during the pandemic, but industry 4.0 hopefully can be a good opportunity to bring these women back in the workforce. Today, several manufacturers are hiring women. For example, for every 10 new hires in the EV industry, six tend to be women FMCG companies like Britannia, plan to have 50% of women in the factory workforce in the next two years. So the change is already happening.

Kalpana Pathak 13:51
So full marks to industry 4.0 for making manufacturing smart, pushing the workforce to rescale and bringing more women into the workforce. But Kiran, an important question is Will all this result in cheaper and safer products for us the consumers

Kiran Somwanshi 14:06
Kalpana I asked the same question to Sanjay Sharma who heads manufacturing at Dr. Reddys laboratories. He was one of the guests in our last episode and this is what he had to say,

Sanjay Sharma 14:15
you will create a product which will be far more robust. So for sure, you will have better quality of medicines, the cost is going to come down and good to come most very, very productive and at the end of the day in a competitive environment that will pass on to the consumer. So it will definitely drive better access and better affordability on the medicines.

Kalpana Pathak 14:34
So as businesses get more competitive, it seems consumers indeed will benefit. Dr. Dotte shares Sanjay's views.

Dr Ranjit Datte 14:42
First and foremost, you know when you are able to produce efficiently, right? It basically makes you competitive and competitiveness by itself has a huge set of business benefits. First of which is making the products more affordable and therefore be able to gain the market share whether these benefits get passed on to the customers or get used in a different way strategically by different industries is really a business decisions that the industry will take. But without this, they will be left behind the industries that do succeed and are able to lower their costs than they actually are risking being out of the industry. And this is why we call it a critical success factor for manufacturing going ahead as a consumer, of course, any efficiency play, I mean, industry 3.0 was about automation, right. So as automation became more and more prevalent, the cost of the product came down the waste and losses came down, further reducing the costs. So for every efficiency measure that we take, whether it's industry 3.0, there is automation or industry 4.0, which is database analytics, the benefit to the consumers should be immediate elements.

Kiran Somwanshi 15:50
And the looming recession, the world over, will only further push the industry towards adopting industry 4.0 As Dr. Datte points out here,

Dr Ranjit Datte 15:59
paradoxical as it may sound, but generally the efficiency improvement initiatives, right, actually take the front row seats when it comes to tough times. Right? When going is good, right? The costs and efficiencies are not that much a focus of the industry it is grow and capture the marketplace, right. But now with the marketplace either stagnated or shrinking, to be able to make money from that marketplace. Now you need to be efficient, right. And that's when actually all these efficiency plays actually start getting looked at administrative

Kalpana Pathak 16:34
True. When the going gets tough, the tough gets going. It's no longer a debate of man versus machine. The whole premise of industry 4.0 is to improve human efficiency and capabilities. With the help of smart machines, data analytics, and artificial intelligence. Automation doesn't mean loss of jobs. It just means the need for skill upgradation of the workforce. But a critical aspect is while the industry needs skilled manpower today, our education institutions are unable to train them even by tomorrow. Ironically, Academia and industry have been struggling to be on the same page for decades. So how can we take full advantage of the Fourth Industrial Revolution, the new education policy does provide hope. But the change has to happen on ground and fast. Of course, several existing jobs may soon disappear. But the companies have to be cognizant of this aspect and be proactive in rescaling their employees, the employees themselves have to be receptive to the idea of getting rescaled. Sunil has an interesting piece of advice for the current workforce.

Sunil C 17:39
older generation, are they willing to upskill I would say that not 100% Is there are a lot of older generation who want to be at the comfort zone. But my message is that you know, you have to be a lifelong learner if you want to be relevant in the changing world. So you have opportunities available you have courses at a click of a mouse you know, we are in an era where we don't need to hunt for colleges or hunt for places where you will get upskill you can sit at the comfort of your home and get yourself upskilled. So my advice is that you know, if you are passionate and if you want to increase your earnings, if you want to pick up a higher challenge, better job, then I think upskilling is essential.

Kiran Somwanshi 18:26
So basically all those who are in their 30s and 40s and are looking and staring at some future ready manufacturing and environment. I think the message for them is you know recently or perish, right?

Sunil C 18:38
Yes.

Kiran Somwanshi 18:40
You have been listening to the impact of industry 4.0 on employment and consumers only on the Morning Brief.

Kalpana Pathak 18:47
I'm your host Kiran. Somwanshi and I'm Kalpana Pathak signing off.

Kiran Somwanshi 18:50
Thank you Dr Datte and Sunil for your insights. And thank you for tuning into this podcast brought to you by the team economic times. show producers Sumit Pande sound editor Rajas Naik, Executive Producers Anupriya Bahadur, Anirban Chowdhury and Arijit Barman. We hope you like this episode, do share it on your social media networks. The morning brief drops every Tuesday Thursday and Friday, and is available on Spotify, Apple podcast, Amazon and Google podcasts as well as Jio Savvn. Do tune into ET play our latest platform for all audio content, including the morning brief. Thank you for listening and have a nice day ahead.

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