The service sector definitely is the flavor of the season while the manufacturing sector has become the villain. Jobs in the manufacturing sector has come down drastically and in most economies, the rise of the service sector employment is a validation of the disappearance of the manufacturing jobs. Those of us who run companies that have straddled both the industrial era and the information era view this trend with a certain amount of anxiety.
The IMF’s world economic outlook survey report says ” the negative consequences of disappearing manufacturing jobs can be sizeable for individual workers and their communities, especially in regions that developed as manufacturing hubs”. While the IMF goes out of the way to say that the slow growth of manufacturing jobs and the movement from agriculture to the service sector bypassing manufacturing is not a trend that needs to cause too much worry, yet we in India may have different thoughts.
India has always been at the forefront of claiming to be a soft power. We saw the growth of China and other Asian economies, like South Korea, Taiwan etc, just by investing in the manufacturing sector. It is also a known fact that without manufacturing there cannot be income generation and growth and hence the service sector cannot make any movement forward. To ensure that the service sector grows, it is imperative to make sure that the manufacturing sector has a robust growth path too. The government must take all necessary steps to ensure that the manufacturing sector is given the right kind of encouragement and at the same time is protected from forces that weaken the sector by evoking issues related to the environment.
The ‘Make in India’program would require that the share of Manufacturing in India’s GDP is pushed up. If the government wants to accelerate the growth of economy from the 7% to the 8% levels, then the only solution is to create more jobs, particularly in the manufacturing sector.
Last but not the least, it’s a known fact that India is endowed with rich natural resources. If these resources are not utilized by the manufacturing sector within our country there are two things which are likely to happen. The most unfortunate outcome would be the value of these resources will not be understood by the society and misinformation would lead to flitting away these resources. The second unfortunate outcome would be that India will not be in a position to add value to the resources that we possess and instead would be merely exporting them to other countries who will add value and end up making the most out of it.
In the mineral mining industry, we have resources in the form of titanium dioxide which is an important input for the paint industry. Unfortunately, we do not have the manufacturing capability to convert these resources into gains. As a consequence, the paint manufacturers are importing the material at high cost when an abundance of it is lying in our coastline unharvested.
The government has to take steps to use the manufacturing sector at least for providing employment opportunities for its people.
Photo courtesy : rafeejewel