Thoughts on economics and liberty

The huge problem of poor labour quality in India #2. My brother speaks.

As I indicated in the previous blog post, I'm now posting my brother's views on this issue – of labour quality and vocational training in India. Please see an earlier discussion re: his thoughts on moving to robots.

Rajeev operates a small manufacturing facility in India and exports to niche markets in Germany.

Why it may be better to get a robot than to hire Indian labour

===RAJEEV SABHLOK===

Beyond the reasons why an entrepreneur would want to replace a seemingly abundant manpower base with an expensive, electricity hungry device, I am providing a detailed account of what I perceive is happening around me.

My case is of a specialised small volume production that needs to be undertaken by operators who fall in the ‘craftsman’ category which is a little beyond ‘highly skilled’.

Apart from dedicated skill sets, desired manpower characteristics I am looking for are intelligence, consistency, inquisitiveness and emotional stability. I require manpower skilled enough to detect potential long-term failures from fatigue caused by stresses (created through seemingly minor variations) in the forming and fabrication process – a skill acquired by hands-on experience or by knowing where to source this information. I source my information from TWI, SME and private consultants in the UK after IIT Delhi proved to be of little help.

I also need highly skilled TIG welders to weld aluminum – again here in the NCR, there are no more than a handful created by ONE (just the ONE) jobbing house in Delhi that was a direct consequence of manpower trained by Indian Oxygen Limited (later bought out by ESAB) and jobs outsourced by L&T.

We struggle to compete with Italy which (with its twin pronged skill base – family run enterprises & state funded specialist institutes) for a European buyer is a good balance of cost and quality. Unlike Italy, we have neither pre-trained manpower nor access to locally made elementary equipment like a pulse TIG welding machine (Strange but true, no one in India has been able to design a PCB for this basic device).

So like a utopian (naïve?) small time entrepreneur, I set out to develop my own skill-gap bridging program – including a somewhat successful 6 to 8 month (depending on the spatial, numeric and abstract reasoning abilities plus limb dexterity of the trainee) pulse TIG welding apprenticeship. But eventually the inevitable happens – the guy leaves mid program to earn a higher wage as a piece rate contract worker for a Delhi NCR based automotive OEM.

Arguably there is very little incentive to become a master welder or master technician for that matter. This guy sees his one acre vegetable patch as his fall back in emergencies. Converting his thatched hut to a ‘pucca’ house remains his priority. His upbringing has been so insecure that he cannot see a stable vocation based future 30 years down the line.Unlike a Swiss ITI (equivalent) student, he was never given a plausible outcome to dream of.

Coming to calculations on the changeover from the highly skilled manpower (gestation of 1 sometimes 2 years) to the machine (plus variable manpower) combo.

For an initial one time investment less than that of a basic tool room, the robot works up to 2.4 times as fast as the fastest known human welder, is consistent to microns, can be additionally programmed with a YAG laser head to cut and trim and even with a rotary tool to mill or grind.

The weld/cut path can be programmed by a part time programmer on his laptop based on email data. An existing CAD designer needs a 15 day retraining to program all four variables (the robot, the work holder, the welding machine and the wire feeder).

The extra running cost of the robot and peripherals is no more than the cost of hiring scarce high skill daily wage welders and output losses when existing manpower leave abruptly.

I also know that by virtue of reliability, flexibility and consistency, a robot offers potential to exponentially increase output with few foreseeable disruptions arising from manpower issues. In events of financial stress, I can take on low end contract jobbing – something I can’t do with a skilled welder from fear that the guy will leave with the customer.

Continuing on the subject: the larger perspective.

For one, there are hidden connections with the ability of someone to be trained for skills with the foundations laid in early childhood – healthcare, nutrition, hygiene, mind games and toys for toddlers, sport and music at school, elimination of heavy metals from water sources and other little things no one has given much thought to. (For instance, many Indians drive in a particular fashion not from intentional belligerence but from innate lack of spatial reasoning skills that require special schooling to correct.)

We have rightly chosen the path of high volume low skill production (automobiles, garments, BPOs, white goods – anything that does not entail precision) to wean people from agrarian activities. This direction is excellent as long as there is a skills growth path that sustains us to a 10,000$ GDP (beyond that you need brilliance or petroleum under your bed).

Unfortunately in our context, this is currently restricted to skill enhancement through TWI (Training Within Industry was the fall back of the US for emergency production up-scaling in WW2 and pretty much everyone who acquired skills this way went back to their original vocations). The visible industry in India today is the one that runs on imported low-end knowhow as no one in their right mind will outsource the cutting edge to a country mired in uncertainty.

IT and a handful of other sectors may have rather different outcomes though but these remain minority employers.

The problem remains that the (reasonably well paid) guy who spot welds the floor of a car for 18 years with an OEM neither has anything tangible to contribute when he leaves nor are there any real re-training facilities outside of industry where he can build on what he already had. Chances are that this guy has lost touch with agriculture and will choose to retire to a life in retail (own grocery store) or somewhere else in the service sector. In the end by this process, 20 years down the line the effective national skill base is the same as when it started. The expected rise in quality standards of a people does not happen.

Until the day India tweaks its existential context to ‘become rich’ instead of ‘not being poor’ and discovers what gets people there, we will probably not give much thought to developing technical skills.

The last commonwealth games was an example of this – everything from fireworks to timekeeping to treadmills (quoting things that made the news for the wrong reasons) had to be outsourced. We couldn’t even get elementary civil works right. Imagine us building a carbon fiber bicycle! Totally embarrassing for any self respecting people. Perfectly acceptable for a ‘not being poor’ nation.

Strangely, even when they didn’t want their people to become rich; the communists did well on this front. Their skills surplus (the erstwhile USSR for example) today not only helps push their respective national GDPs and their people to a better standard of living but also helps bring expat monies from service intensive economies like the UK.

Then again, as much as I crave a greater respect for the ‘made in India’ label, my types are ultimately here for ourselves (the exact outcome desired by the gold standard Swiss tradesman schools) and we will find our own ways to compete with the Dragon and others.

As we mature psychologically and financially, in the evident of absence of easily obtainable skill sets locally, we will gradually shift design development to eastern Europe, tool development to (where else, but) China, replace that elusive welder with a machine and continue assembly through semi-skilled people in India until ground realities change.

Sanjeev Sabhlok

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7 thoughts on “The huge problem of poor labour quality in India #2. My brother speaks.
  1. Prakash

    This might be the most important post that people who are invested in India should be reading. Unfortunately, the content requires a wee bit of system 2 thinking, which is totally lacking here.

     
  2. Sanjeev Sabhlok

    Prakash, time. Time is the biggest constraint. Why don’t you provide the further analysis necessary for this? Happy to publish it as Part 4.

     
  3. Prakash

    Sanjeev, I’m very sorry for the misunderstanding. By here, I had meant in India. Definitely not on this blog. You are a proper system 2 thinker.

    I have thought about the issue of India lacking talent and it is a huge problem because of the “sunk costs”. There are already 10s of crores of people already out there who need jobs. I have very little to add to this debate except to probably point out the ideas of Sauvik Chakraverti. He’s a little dogmatic, but he does have a point that existing skills like that of a live musician, a dancing girl or a toddy tapper are banned by the state. These don’t require any additions of skills. They are literally plug and play with the present skill level of the country.

    A bigger issue might be the sheer lack of electricity. Regular power means one just needs a fridge to open an icecream shop or a fountain soda outlet.

    An associated issue is micro-infrastructure. Providing some kind of infrastructure to the street food vendors can boost the

    We don’t need too much capital to give a good life to someone with low level skills, if we can get smart about some of these.

    In addition, I agree with the listed solutions in Part 3. Full FDI in vocational training is a no brainer.

     
  4. Sanjeev Sabhlok

    Agreed. I’ve already been demanding liberty for 15 years. Had any of these solutions been implemented, we’d not be where we are today.

    I’m now pointing out that labour quality is a major issue. And the solution is the same: more liberty.

    s

     
  5. Anil

    I would agree with Prakash that something as simple as ensuring 24 hour electricity could change things drastically. At Shine Academy we are suffering from erratic power supply. On a good day during the working hours in day time you could not expect more than 3-4 hours of consistent power supply. We have backup inverters but these too cannot cope if there isn’t enough supply to charge these in the first place. For over 8 months in a year, between March and October, the hot weather in North India in the absence of proper power supply is not conducive to any kind of productive work.

    On the wider issue of labour quality, I agree too. I hope to make some change through the efforts of Shine Academy.

    Jai Hind.

     

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