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What Can Stimulate India's Post-Pandemic Economic Recovery?

Hrishikesh Panditrao (TYBIM)

workers can become the technician, sales executives, customer service agents that will be needed as the middle
class expands, but might not meet the aspirations of a college-
educated person. According to the World Bank, the 'Asian miracle'
that led South Korea, Japan, and Taiwan, among others, had more to
do with investments in primary and secondary education than with
investments in higher education. However, if these workers need to
find jobs in their respective sectors, we need to strengthen our SMEs
(Small and Medium Enterprises), as explained in a survey conducted
by Tata Sons. This is something that is an efficient alternative to the
definition of 'M'SMEs used by the government of India. According
to TataSons, the Indian business landscape is characterized by a large
number of micro-businesses, who optimistically call themselves
'entrepreneurs'. These micro-businesses are just survival ventures, employing less than 10 people. If they had a
chance, many of these 'entrepreneurs' would opt for staid, unglamorous jobs. A survey conducted by Columbia
University concluded that the average size of an Indian firm in 2014 was just 2.24, an indication of the number of
educated workers, who would remain unemployed. These firms employ over 70% of India's workforce working in
informal private companies. The extent to which formalized firms are productive for an economy is also explained
in another survey conducted by Columbia University which stated that an Indian Manufacturing firm employing
50-200 employees is approximately four times as productive than the one that employees between five and fifty,
because of their levels of formalization. These firms i.e. five to fifty may relatively remain dormant to firms that are
adept in technology, i.e 50-200 employees. A combination of three surveys conducted by Tata Sons, US Bureau of
Labour Statistics (2014 data), OECD(2014 data), and the updated Economic Census of India concluded that the
Micro firms(1 to 9 employees) employ 11% of the private sector employees in the US, 20% in Germany, 27% in
Israel(70% for India), compared to SMEs(10 to 249 employees)that employed 36% of the private sector employees
in the US,43% in Germany and Israel respectively. If India needs to create better and bigger companies, then our
workers need to be updated in the latest technological processes, something that needs to be altered every couple of
years according to the preferences of the market and the industry.

India needs to believe that the COVID-19 pandemic is a phase where humans will start to believe that they are gods
and creators of modern society due to the increasing use of fourth industrial revolution technologies like Artificial
Intelligence (AI), Robotics and Block Chain technology in business processes. The AI driven automation
revolution could not just cause inequality between classes, but also between countries. Looking back at history, in
the first Industrial Revolution, few countries like Britain and Japan industrialized first and went on to conquer most
of the world. According to renowned historian Mr.Yuval Novah Harrari, “In the first three industrial revolutions,
exploitation caused a world crisis. But in the fourth industrial revolution, it is irrelevance that will cause a global
crisis.” Thus, Indian workers will have to learn to adopt newer technologies faster. Otherwise, enormous levels of
unemployment in the foreseeable future won't be distant. Not surprisingly, countries will have to change and adapt
faster than the previous revolutions, something that was also seen in the second and third industrial revolutions
respectively.

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