October 23, 2019

Importance of service revolution in India

Context

India is facing the fourth industrial revolution which will affect entrepreneurs, consumers , youth and aged people equally. The first industrial revolution was due to the power of water and steam,  which transformed human labor into mechanical formation, while the second industrial revolution was due to electrical power, which was possible on a large scale basis and the third industrial revolution made electronic and information technology Paved the way for automatic construction by experiment. The fourth industrial revolution is currently in progress and it is being used to exchange data in the field of automation and manufacturing technology. With the increased capabilities of five decades in digital communication and falling costs, the global service revolution has been done by the existing industries,Labor markets are changing again and in this way we are related to each other and are getting affected by this. The service sector now dominates the manufacturing sector and contributes more than 70% of the GDP in developed economies .



Extension of service area

  • Services also contribute heavily to developing countries’ gross domestic product.
  • Young workers who leave their villages and farms for cities are increasingly engaging in jobs in the service sector of the city rather than manufacturing.
  • Unlike China, India has been leading the growth of this sector due to rapid growth in services compared to manufacturing. The business of services is growing faster than the goods business.
  • It is notable that labor productivity growth in services is higher than industries and productivity increase in services in India corresponds to labor productivity growth in China’s manufacturing sectors.
  • As a result of the fourth industrial revolution, globalization has emerged as a new form, which is benefiting countries which are delayed during development period.

Challenges and management generated

  • However, the technical changes have further worried the concerns. It has raised many questions before us – such as skill-based technology changes will reduce jobs and will there be a reduction in the quality of workers and jobs? As a result, there will be a lack of technical supplementation.
  • These challenges management to invest more in human capital stock and create a buffer for the demographic dividend in India, inequality, and educated in gender discrimination and machine learning etc. topics , can be better.
  • In addition to understanding the benefits of the fourth revolution and managing the risks, everyone will need to work together.

As evolution escalator

  • According to analysis of firm-level data, the global development between technology, developed and developing economies promotes convergence.
  • Increasing productivity in developing countries has been relatively good for the companies present in the technical borders.
  • Digital technologies open new paths of continuous, inclusive and smart development.
  • Fear of de-industrialization has been well managed by India, but no one should ignore this new development escalator that emerges.
  • Actually, services are now an active component of most development and strategy of jobs. Local industry associations also now provide services in the policy table.
  • Being late on the threshold of development, India has a golden opportunity to shape its future and it can take more advantage in the period of new industrial revolution, provided the focus of policy formation is to create opportunities for demographic dividend and opportunities created by technical changes. Target.
  • Even though investment in the physical infrastructure matters more to the manufacturing sector, but the importance of investment in human infrastructure / human resources with services as a new infrastructure has also increased.
  • It is worth mentioning that the U.K. And in the US, human capital investment has already surpassed the investment in physical infrastructure and on the other hand, due to the rapid pace of technological change, in various sectors of the world, such as in Africa and South Asia where growth has been delayed, human capital stocks It’s left behind.
  • In addition to this, many more jobs will be redefined in the context of jobs and large number of new jobs will be created which will require various skills, technical know-how , problem solving and important knowledge skills , as well as cooperation and sympathy.
  • Due to delays in the scope of development, India will benefit from all such facilities as India is the youngest population in the world where learning ability and curiosity are high. It is notable that compared to China and America ( 37 ) , Western Europe ( 45 ) and Japan ( 49 ), the average age in India is only 28% by the year 2020 .
  • India’s young population will increase economic growth through many mediums. The first is the human capital stock channel. If investment in human capital stocks is increased, India’s demographic will become a new development driver.
  • It is notable that as the young population reaches the working age, they can be easily trained and skills can be provided to join new industries.
  • Demographic dividend will also change in the direction of spending financial resources and which will inspire them to invest in children’s higher education and skills.
  • The second channel is related to the increase in women’s workforce which is naturally associated with the decline in fertility. Third channel is the increase in savings rate, because working age is the key period for saving and the fourth channel encourages long term retirement with longevity for savings.
  • In addition, the fifth channel is related to a comprehensive change in the mindset of a middle class society, which has already been made. Significantly, technology is already the largest sector of the world economy, even it has covered the area of ​​financial services.

Forward path

  • We need to keep in mind that the use of new digital platforms should be used to connect people to markets, micro-small and medium enterprises (SMEs) to global business, and to promote gender revolution. So that the expected thought changes can be made.
  • New jobs will require technical know-how, problem solving and important knowledge skills , as well as other skills such as perseverance , collaboration and sympathetic skills.
  • India’s biggest asset is its young population, investing in human capital will prove to be a big success for India and it will also prevent India from facing the demographic curse.
  • Policy makers need to emphasize both physical and human resources while planning the distribution infrastructure, but also emphasize the importance of investing in human capital stocks.
  • We still need to develop our understanding of how infrastructure can be favorable to increasing urbanization, public private partnership or reduce the proper use of digital technology, and currently the cost of education and social needs?
  • Significantly, the decisions that have taken place today will affect India’s demographic dividend, so there is a need to make a conscious decision in future.

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