Automation Hits the Textile Sector in India, No New Jobs Created

July 11, 20168:23 am2831 views

The textile and apparel industry will only be able to create 29 lakh jobs, as compared to government’s target of one crore new jobs, despite the sector’s market size projected to grow by 40 percent to  $142 billion in the next five years, according to a report.

The textile sector has been worst impacted by the automation boom with the spinning, autoconers and auto-splicers division replacing 20 workers by 2 on an average, The Hindu reports.

A joint study conducted by industry body Texprocil and EY said: As textile and apparel industry is moving towards automation, the industry is unlikely to create more jobs along with the growth in the industry. The expected job creation in the domestic textile and apparel sector would be 29 lakh in the next 5 years.”

As recently the Union Cabinet, under the chairmanship of Prime Ministe Narendra Modi approved a special package for job creation and export promotion in the textile and apparel sector in India. This would create 1 crore jobs in the next three years, mostly women, US$30 billion in exports and investments worth Rs.74,000 crores.

The special package would include a slew of labour-friendly measures to promote employment creation, economies of scale and boost exports. However, this strategic decision to empower the nation’s textile and apparel sector by improving its cost-competitiveness in the global market seems to be have been greatly impacted due to technological advancements and the automation.

Since 70% of the workforce in the garment industry is women, majority of the new jobs created are likely to go to women and this automation taking over the game has affected the social transformation agenda as decided by the Modi government for women empowerment in the country.

E&Y report said the technological advancement leading to increased efficiency may reduce job opportunities. From a high of 40 workers being employed by the industry, it has now declined to 25 workers per Rs.1 crore. The inter-fiber shift moving from relatively labour intensive spun yarn to synthetic filament segment has also led to lower job creation.

See: Apparel Manufacturing has Potential to Create 1.2 Million New Jobs in India

Recent findings by the World Economic Forum said, more than 5million jobs will be lost globally by 2020 as a result of advances in artificial intelligence, robotics, and other automation technologies. Currently lower-income countries have competitive cost advantage over higher wage ones in tradable sectors such as agriculture and manufacturing. As more and more sectors are replace workers by robots and automation technologies, this will level the cost playing field.

“While many jobs are automatable in the developing world, automating them is not yet economically feasible due to the abundance of cheap labour,” the report says. Building on 2013 research by Carl Benedikt Frey and Michael Osborne, the first Technology at Work report, was published in 2015,  a substantial share of jobs are at high risk of automation in major emerging economies including China and India (77% and 69% respectively).

According to Oxford Martin research report in association with Citi: “The impact of automation may be more disruptive for developing countries, due to lower levels of consumer demand and limited social safety nets. With automation and developments in 3D printing likely to drive companies to move manufacturing closer to home, developing countries risk ‘premature de-industrialisation’.”

It further stated, “While a number of cities may have been affected by, for example, offshoring of manufacturing in the past, the expanding scope of automation now means that even low-end service jobs are at risk, making a different set of cities vulnerable.”

Acknowledging the fact that the mindsets need to change in the 21st century, Kathleen Boyle, Citi GPS Managing Editor said, “A key challenge of the 21st century will be recognizing that accelerating technological change is going to affect both employment and society. The magnitude of the challenge ahead needs to be recognized and an agenda set for policy to address issues such as educational needs, to minimize the negative effect of automation on workers. And it is crucial that this conversation starts now.”

Also read: How are Companies Coping with New Employment Models in Today’s Economy?

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