Lessons for Make in India from World Bank report

Cautions export-led manufacturing model to keep in mind automation, artificial intelligence

The government’s Make In India initiative and its plans to set up coastal economic zones can both take a leaf out of the World Bank report, which says that advances in technology and altering trade patterns are affecting opportunities for export-led manufacturing. 

The report, Trouble in the Making? The Future of Manufacturing-Led Development, says smart automation, advanced robotics, and 3-D printing are the new factors influencing locations conducive to production. 

While these shifts threaten significant disruptions in future employment, particularly for low-skilled workers, they also offer opportunities, says the report released on Wednesday by the World Bank Group.

It underscores the resulting changes in the manufacturing sector’s ability to create jobs and lift people out of poverty in developing countries. It encourages policymakers to adjust their approach to spurring job creation in manufacturing and readying workers for jobs of the future.

“Technology and globalisation are changing how manufacturing contributes to development. We will need to embrace this change rather than fear it,” says Anabel Gonzalez, the World Bank Group’s senior director for trade and competitiveness.

Gonzalez says in the past, the manufacturing sector created jobs for unskilled workers and increased productivity. In the future, developing countries will need to update their policies along with their infrastructure, firm up capabilities and job creation strategies to meet the demands of a more technologically advanced world. 

Changing technologies and shifting globalisation patterns are destined to reshape manufacturing-led development strategies, says the report. 

The report says trade is slowing and global value chains remain concentrated among a relatively small number of countries. 

Smart automation, advanced robotics, 3-D printing and other advances being incorporated by global manufacturers of cars, electronics, apparel, consumer and other goods are shifting how countries and firms compete for production, it says.

The report comes at a time when India is struggling to generate jobs. Political battle lines have been drawn to score points over lack of jobs. 

At Princeton University’s Woodrow Wilson School, Congress Vice-President Rahul Gandhi admitted that the United Progressive Alliance government had been unable to deliver on the 30,000 jobs it promised to create every day, but was quick to point out that it is a goal the Bharatiya Janata Party-led National Democratic Alliance will also fail to meet at the current rate.

“Those same people who got angry with us because we couldn’t deliver on those 30,000 jobs (a day) are going to get angry with Narendra Modi,” said the Congress leader during an interaction with students and faculty.

The government’s proposal on coastal economic zones is based on tapping export market of labour-intensive sectors such as electronics, apparel, utensils, and leather products. 

Its Make In India programme is also primarily a manufacturing initiative, for both domestic and export markets.