ISBInsight: India is an interesting case study from the perspective of the Fourth Industrial Revolution. How do you see Industry 4.0 panning out in India from a manufacturing perspective? We have a stated government goal of 25% target growth by 2025. Are we making headway towards that objective?
Chandan Chowdhury: The manufacturing sector is strategic for India. The government is integrating the Fourth Industrial Revolution or Industry 4.0 within its industrial policy. That is a big step, because for the manufacturing sector to grow, it has to produce goods not just for India but also for the global market. The Fourth Industrial Revolution makes factories smarter, helps factories deliver high quality products—and all this from a lean organisation.
When we deploy features of Industry 4.0, the industry is going to be more automated, deploy robots and intelligent sensors. Factories will become smart, but humans will experience job loss. We will experience a jobless growth. We cannot protect jobs but what the country can do is protect people. We need to develop new skills- for example, teaching people how to learn. Learning to learn will be important— and learning about collaboration with people and with robots, emotional intelligence, and ability to solve complex problems. Skills such as Artificial Intelligence (AI), Augmented Reality (AR), Virtual Reality (VR), cognitive flexibility will be critical. We will see many new skills coming up and the policymakers have to enable the workforce to learn these skills. From our Institutes, we are trying to create awareness around what is needed to be successful in launching Industry 4.0.
Within Industry 4.0, is there equal opportunity for both genders? How can we sustain and increase the female labour force participation in both manufacturing and infrastructure?
If you look at the last ten years, there has been little dialogue from policymakers about ways to increase the female labour force participation. India has a huge problem in this area. How do we increase participation of women in the workforce? In terms of population, women account for 50%, but their labour force participation has been declining: in 2005, it was already low at 38.5% and in 2018, this number is even lower at 26.9%. Compared to global statistics, this is dismal. Globally, women account for 48% of the workforce. In China, female labour force participation is more than 67%. From ISB, we are raising awareness about this critical issue and doing research on how we can increase this number significantly.
Both Centres that you head at ISB have been deeply engaged with policymakers– for example, your Smart Cities Index is well recognised. Has it achieved the kind of impact you had envisioned?
If you look at the study on Smart Cities, we studied 53 one-million plus population cities in India, looking at many dimensions- mobility, economy, standard of living, governance, environment. We created a Smart Cities Index ranking all 53 cities and conducted training for government officials. The report was released by the CEO of NITI Aayog, the erstwhile Planning Commission. This has now evolved into the ‘One Hundred Smart Cities Initiative.’ The Government of India realises that India is going to be a mainly urban country. Urbanisation is becoming a big problem as hundreds of millions of people migrate into cities. So, urban spaces will play a big role in the life of citizens.
We are now looking at these 100 cities and will recompute their rankings using the Smart Cities Index. At the end of February 2018, the government has uploaded this data. In addition, every city now has a Special Purpose Vehicle (SPV) with a CEO of the city. We have written to policymakers and CEOs of these SPVs—for example, to the Ahmedabad CEO– to get access to the data so we can support them and provide analysis on achievements, areas of improvement and recommendations.
You have worked closely with the automotive sector and feel strongly about how India should be moving up the value chain. How can we make that shift from Make in India to creating other types of value?
The Indian auto industry employs 32 million people. It is significant in terms of employment and also in terms of contribution to GDP, which is 7.1%. But I believe this 7.1% can be increased to a double-digit figure. How can this happen? The government must ensure that we are not just remembered as a country that can produce passenger cars, but also as a country which can produce high quality premium cars. Making high quality premium cars means incorporating the latest technology and high-quality safety. Our passenger cars need to face competition in terms of technology, safety and emissions.
We need to remove the layer of protection which exists for passenger cars and give equal treatment in terms of policies, support, taxation to both passenger and premium cars. India stands a good chance because we have high skill in software development. Premium cars today are more software than hardware. By taking these measures, India will become a hub not just for passenger cars but also for premium cars.
Technology is also the new infrastructure, of course. It is interesting how the Centres you lead connect manufacturing, infrastructure and technology in terms of research, industry and government outreach.
About the Interviewer:
Yogini Joglekar is Managing Editor of Management Briefs at ISBInsight.