How the global crisis may affect job seekers at home
The COVID-19 crisis continues to rip through the world. It has affected 210 countries,infected around 3 million, and killed around 200,000 – and the numbers are rising every passing moment. We live in a strangely interlocked world with countries interconnected in myriad ways. Any calamity of this magnitude in a connected world will certainly have ripple effects that none can escape.
An unstable world
What started as a healthcare problem has now snowballed into an economic nightmare. Scores of countries are staring at bankruptcy. According to the Asian Development Bank (ADB), the pandemic could cost the world anything between $2 trillion and $4.1 trillion – about 2.3% to 4.8% of the global gross domestic product (GDP). Financial markets reel as capital worth $83 billion has left emerging markets with investors seeking safe havens. Nearly 174 million people are jobless worldwide. One of the worst affected is the US, the world’s largest economy. India has reported over 26,000 cases with nearly 780 deaths till 26 April.
A survey by the Centre for Monitoring Indian Economy (CMIE) reveals that India’s unemployment rate has perhaps reached over 20% following the nationwide lockdown imposed on the last week of March. India was already facing a demand recession anyway – people were reluctant to spend.They feared reckless political decisions could have adverse impact on their savings and investments, as had happened in the past. For a $3 trillion economy – a lockdown means a loss of $8 billion per day.
Complicating the calamity, the US, parts of Europe and Japan are engaged in a political war with China to curb its clout after the pandemic subsides. As supplier of critical raw material to most countries, China is sure to hit back. European business establishments now see China as a threat, not just as a reserve of cheap labour. Discomfort keeps mounting at the European Union (EU) as China prefers to deal directly with individual European countries, rather than via the EU consortium. Japan has a critical role to play in the post-coronavirus world. It has already allocated $2 billion for firms shifting production back to Japan and another significant package to move to other countries.
An uncertain home
As the world shuts its doors in the wake of the pandemic and new power equations are formed, career opportunities with MNCs could be shrinking for Indian students.
As US President Donald Trump is reconsidering Green Card regulations to safeguard national interests, the lockdown in India has prompted multinationals to think of shifting outsourced operations back to their home countries. NASSCOM figures reveal that in 2017 alone, India had over 40 lakh workers employed in outsourcing while earnings from that sector amounted to over 15,000 crore US dollars for that year.
However, a major portion of outsourced work requires handling of sensitive and confidential data.For this, organizations want a secure zone with all stipulated data security measures implemented. They are not open to the idea of such employees working from home at all – a necessity forced by the lockdown. In addition, home broadband speeds in India cannot match up to organizational bandwidth. And many small-to-medium outsourcing agents in India are incapable of providing laptops to all employees.
Overall, the entire outsourcing scenario in India is sure to be impacted by the pandemic. Australian companies Telstra and Optus as well as Virgin Media of UK has already declared creating thousands of jobs in their home countries for operations which had been traditionally outsourced.
Leveraging the benefits of Artificial Intelligence (AI) to reduce human dependency is another option that enterprises are eager to try out. This can create a low-human-interaction workplace – a condition that would be hygienic as well as economical in the long run. Compared to humans AI could work 24X7, never goes on strikes and reduces a lot of associated complications. However, this could mean a surge in AI and automation-related studies and innovations in India – an emerging discipline taking firmer roots.
So, where do we stand?
The post-COVID-19 world will clearly see a realignment of geopolitical forces. China will try to buy support from weaker countries. Europe and Japan will build up stronger economic and manufacturing relationships. The US, with an election imminent,may consider reducing dependencies on Chinese products. India should try to fit into this new global order. It has the benefits of a large domestic market, a huge pool of youthful human talent, and a reasonable manufacturing infrastructure. Focus on the right domains in the education sector, and awareness of the latest developments in cutting-edge technology could stand to India’s advantage.