India's services sector needs to revamp its digital skill and job profile

18 February 2019 Consultancy.in

A new report from global professional services firm PwC has reinforced what a number of experts have been predicting for the Indian economy – that the advent of Industry 4.0 will bring about a shift in the nature of jobs in the Indian market and consequently the skills required for the same.

India’s economy is growing at a rapid rate, so much so that the country currently has the highest growth rate among large economies across the globe. By PwC’s own analysis, India is set to become the second largest economy in the world by 2050, provided that it can maintain its current rate of growth.

Central to the maintenance of this growth, however, is the ability to keep pace with trends in the global economy. Countries across the globe are currently contending with the rapid digitalisation of their economies, which refers to the increasing integration of digital tools in the development and provision of goods and services.

Sector-wise contribution to India's GVA

India has been quick to realise this global trend, and a historically strong IT sector allowed for an advanced level of preparedness for such a trend. Nevertheless, the economy is far from realising its real potential in terms of digital integration, which is a prolonged process due to the substantial volume of population and business in the country. 

The advent of low-cost data services ensured that digital access spread to rural areas, although the costs associated with digital integration have led to initial reluctance among Indian businesses to embrace Industry 4.0 enhancements in their operations.

Nevertheless, PwC reports that this initial reluctance is fading away, particularly in light of the fact that the country’s revenue generation is heavily reliant on the services sector. Services currently constitute nearly 54% of the Gross Value Added in India, a figure that has increased from 50% in 2013.

Prioritisation of digital categories

Among the services sector, IT services firms themselves have been investing heavily in accumulating expertise in the Industry 4.0 domain, with the objective of facilitating this national transition to the digital sphere. Other sectors such as digital advertising and marketing that are directly affected by digitalisation have also been investing in developing capabilities.

However, the integration of digital applications into business operations is not sufficient to ensure the realisation of digital potential, nor to prevent major disruption in the future. As per the report, digitalisation is also expected to hit the labour market in India, leading to a new paradigm of skills and jobs.

While most analysis around automation and artificial intelligence has been centred on the threat to simple jobs, analysts now predict a new breed of jobs that are likely to emerge, resulting from a future scenario where individuals will have to work in tandem with machines.

Industrial investment in technology (Artificial Intelligence, Internet of Things)

Consequently, the skills required in the workplace are also likely to evolve to facilitate this collaboration. “The ‘Skills for the Future’ framework indicates that cognitive skills such as critical thinking, emotional intelligence and empathy, management and leadership, relationship building and collaboration, cognitive flexibility and creativity will be central across all industries,” says the report. 

Investment in such skill-development represents one of many areas where firms must now invest to become digital ready. Other areas include artificial intelligence, Internet of Things, and augmented reality, all of which are gaining popularity across all sectors of the Indian economy.


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