A new wave of digital innovation is reshaping India, raising the region’s growth potential and creating numerous job opportunities
It goes without saying that employment generation is India’s biggest politico-economic challenge. India’s problem is not that people do not have jobs; it is rather the lack of well-paying jobs. While much of India’s low-paying job issues can be attributed to the lack of enough growth in the industry and markets, we are also hindered by a situation where lack of qualified workers for well-paying jobs is emerging as a constraint.
According to a study, the employment will further decline by the end of 2019 and India will be home to around 18.9 million unemployed people. Even though Bengaluru, Gurugram, and Mumbai are hubs of business offering jobs to millions of youths who migrate to the metros from various cities across the country, the scope for future employment looks bleak. A National Association of Software and Services Companies (NASSCOM) report on India, however, estimates the industry to grow by 1.7 times by the end of 2020 in view of 400-odd companies having been established in the FinTech industry at the cost of 420 million dollars.
India: Spreading the wings
Although described as a booming economy with tremendous growth potential, the Center for Monitoring Indian Economy (CMIE) also reports that the country’s employment rate has dropped from 5.64% in April 2018 to 5.29% in May 2018. This highlights the job crisis that exists despite the growth in the Indian economy.
A well-known financial markets veteran remarked, “With the onset of the digital era in the country, the financial technology sector is gradually realising its capabilities and with the ability to discover more opportunities, ideate unique solutions, forge-in uncharted territories and innovate irreplaceable technology solutions. Financial technology sector can be the forerunner in generating huge employment opportunities and contribute to the growth of Digital India.”
Given the rapid advancement of India’s technology sector, it comes as a surprise that global investors are keen to get a foothold in the market. Recently, Warren Buffett’s Berkshire Hathaway snapped up a stake in the Indian digital wallet company, Paytm. Indian companies will need to significantly enhance the skill-set of their workforce to be able to maintain the current pace of job-creation in the days to come.
Unfortunately, the FinTech knowledge and skills are not so advanced in India according to Yes Bank’s India FinTech Opportunities Review. It states, “There is a significant gap in the deep-tech expertise required by them compared to the skills of the current graduates.”
A Yes Bank survey revealed that 71% of the respondents lack the knowledge in B2C FinTech ventures and 81% in the B2B FinTech ventures. Also, 80% of the FinTech start-ups promote for internship and talent sharing programmes instead of hiring credible employees. Considering the growth of countries like Singapore, China, South Korea and Japan, the NITI Aayog suggests the Indian government to emphasise on domestic manufacturing under the “Make in India” campaign to generate well-paid jobs.
Incidentally, there have been Indian companies like Jignesh Shah-led Financial Technologies India Limited (FTIL) that have focused on large scale job creation through technological innovation.
Known as 63 moons technologies limited, the company, under the mentorship of Jignesh Shah, FTIL, focused on overall institutional development, and encouraged public financial institutions to become their stakeholders. All of Jignesh Shah’s ecosystem ventures — as examples of Make in India, Digital India and Skill India – strengthened India’s skilled workforce. In fact, a nationwide survey by the Tata Institute of Social Sciences (TISS) revealed that the Multi Commodity Exchange (MCX) under FTIL had created 10 lakh jobs in India!
A senior management team member in 63 moons noted, “The ecosystem made significant contribution in empowering local communities through better opportunities. The bourse had about 3.5 lakh trading terminals spread across 1500 cities and town with more than 2170 plus brokers, several thousand sub-brokers, franchisees and thousands of participants.”
Technologically also, FTIL had surged ahead by way of its innovations. It was way back in 1998 that FTIL launched the path-breaking brokerage software, ODIN, a multi-exchange, multi-segment front office trading and risk management system that enables seamless trading on multiple markets. ODIN soon emerged as the single largest player with a market share of over 80% pan India, supporting over 5 lakh terminals and creating employment opportunities for over 25 lakh people and impacting the lives of over 1 crore Indians.
Other exchanges launched by Jignesh Shah’s FTIL like Singapore Mercantile Exchange (SMX), and Dubai Gold and Commodities Exchange (DGCX) have opened India’s routes for international trades and therefore, massive job opportunities. This goes on to establish that India has a great growth potential, but what we lack are visionaries who can seize the opportunities and lead with an entrepreneurial zeal.
Another example is Kamal K. Singh’s Rolta India Limited. Kamal K. Singh has spent the last four decades creating the Rolta group of companies as a multi-faceted organisation with a strong base of fundamentals and a wealth of Intellectual Property. Its activities include software exports to various countries that have opened many international trading routes for India. It has also established offices in 23 different locations that is offering many job opportunities across the country. Launching a local vendor development programme to work with the local suppliers helped improving quality, productivity, tooling methods and product flexibility.
There is no dearth of such exemplary growth stories especially in the Indian IT sector but these need to be replicated in other sectors as well including the manufacturing, agriculture and agro-based industries, small scale and cottage industries, etc. in order to gainfully employ our skilled workforce.
Striking the right balance to be ‘Most Powerful’
The Indian FinTech sector, at present, is estimated to have a market value of around US$50 billion and, despite its size, it is experiencing a CAGR (Compound Annual Growth Rate) of 22% – or roughly about 3 times the GDP growth rate of India. Still, as the proclivity of using digital technologies amongst Indians is increasing with fast-paced digitisation, this can be termed as just the tip of this rising behemoth. Like Jignesh Shah, there could certainly be many more entrepreneurs who have the potential to be the flag-bearers of innovation and build world-class “Made in India” MNCs.
With a view to achieve the dominant position and to match the pace with other emerging as well as developed markets, apart from government reforms, we need technology titans like Jignesh Shah and Kamal K Singh who could provide jobs to a million people by way of their entrepreneurial ventures in tech-innovation.