View from India: Workplaces will never be the same again
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The economic consequences of the pandemic have dampened the growth of India's financial system. A nationwide phased lockdown and a contraction of the gross domestic product (GDP) of the country are among its effects.
V Shaped Recovery
The National Statistical Office (NSO) has released estimates suggesting that India’s GDP contracted 7.5 per cent in the second quarter of 2020-21, following the record 23.9 per cent decline recorded in the first quarter. As a result of two successive quarters of negative growth, the country has slipped into a technical recession.
Commenting on these figures, Dharmakirti Joshi, chief economist at ratings agency CRISIL, said: “The second-quarter (Q2) GDP data has lent a positive bias to our full-year call of 9 per cent contraction. However, there are some signs of flattening of economic activity in the third quarter. Hence, that and the further spread of Covid-19 will remain the key monitorables.”
CRISIL has gauged that the services sector will be more vulnerable in the second half, particularly contract-based services. “Despite this, we see this fiscal as a story of two halves with better growth performance and higher government revenue in the second part, both of which can support spending,” Joshi continued.
As for the better-than-expected growth in Q2, there were four drivers: pent-up demand; support from agriculture and select export sectors; cost savings for corporates; and a ‘learning to live’ attitude.
Despite the uncertainty of the pandemic, in all likelihood the economy may slowly be heading towards a V-shaped recovery next year onwards. This can be understood as a sharp decline (indicated at the bottom of it) and rapid rise as diverse factors facilitate an upward trend. The pattern of recovery is like the alphabet V, and hence the name.
A slew of factors are expected to boost the V-shaped revival of the country. A growing appetite for consumption from tier cities as well as urban India, along with a demand for tractors and fertilisers in the agricultural sector are among boosters. Toll fee earnings anticipated from highways and revenue coming from Goods and Services Tax (GST) are other attributes. Digital usage which was a staggered activity till Covid happened, has now become ‘a must have’ for everyone. Products such as laptops, smartphones and tablets have become commonplace, regardless of the economic strata of the individual. These, along with e-services, will add to the growth.
Investment opportunities are being thrown open to global companies. The rollout of production-linked incentive (PLI) schemes will help foster verticals like pharmaceuticals and manufacturing. The government needs to chalk out a long term roadmap to give better visibility to India’s footprint in electronic development. Design and manufacturing can be incentivised.
Smart manufacturing hubs, backed by artificial intelligence (AI) and Internet of Things (IoT) can be set up in many parts of the country. Smart manufacturing is also about the convergence of various parts of the supply chain. Automated robots, simulation, Industrial Internet of Things (IIoT) and additive production are among its hallmarks. There will be a surge in automation and robots on shop floors. This will raise the bar for domestic manufacturing, besides improving the employment quotient. India can improve its contribution to the global manufacturing supply chain.
Though it is not possible to fully remove the economic gloom, the next financial year is expected to slowly pick up. There are signs of it.
Diwali or the Festival of Lights has lit up many lives. Several companies have restored full salaries and bonus, along with Diwali gifts. Another reason to cheer is that the GST collection in October 2020 was Rs 1.05 lakh crore (trillion). This is the first time that the monthly revenue has crossed the trillion-rupee mark in FY21, as revealed by the Union Finance Minister Nirmala Sitharaman to the media.
Work Spaces Disrupted
Now that the IT industry’s work from home (WFH) model has got a sense of permanence, a hybrid working system is expected to emerge. It will be flexible and will be based on the co-working model. The co-working spaces that are considered a second option for work will come to centre-stage. These spaces will help reduce capital investment. It’s important as companies need to work on their productivity and improve the staggering margins. At the same time, safety and hygiene are of paramount importance. Office spaces will have to be redesigned to comply with social distancing norms. As well, those organisations whose employees work in shifts will have to be spaced out.
Post Covid, a hub-and-spoke office model is also likely, wherein the main office will be the hub and a few scattered smaller workspaces will be the spokes.
WFH has opened up many unexplored avenues. Post pandemic, when the dust settles down, offices may ask their employees to gradually return to work in batches or rotation.
The back-to-office plan will be different from what it was during pre-Covid. In-person meetings, a norm till Covid happened, may be reduced to one or two meetings, with follow-ups through video or Skype calls. However remote working would call for a higher degree of security as Personal Identifiable Information (PII) requires protection.
Pre-Covid, it was mostly enterprise infrastructure that was being moved to the cloud. Post-Covid, many companies are moving important applications to the cloud. Key takeaway is that new cloud models are expected to emerge.
Contactless will be a norm in the upcoming offices and it’s not just IT but all working spaces. So there will be contactless biometrics for entry-exit of professionals along with contactless dashboards for internal communication.
5G wave rides high into Industry 4.0
We are in the midst of the fourth industrial revolution or Industry 4.0. Its core lies in cyber-physical systems which we know as smart machines. Embedded software systems and the Internet of Things are its other highlights. Central to Industry 4.0 is big data; given its ability to collect, process and analyse data using intelligent algorithms.
Industry 4.0 brings together physical as well as digital capabilities. This has opened up multi-device connectivity and machine-to-machine (M2M) communication among many businesses. The operations happen in several layers. The data generated from machines and devices need to be validated, tested, trained and fine-tuned for corrective solutions. Patterns including multidimensional behaviour are being identified and whetted for taking decisions. The various stages of the process are prone to vulnerabilities like data leakage, human omissions, malware and phishing. Artificial intelligence (AI) systems are being built for such attacks. They will help prevent, detect, analyse and respond to cyber attacks.
Just as AI solutions will help strengthen the cyber-security wall, digital processes will make the edge more intelligent. It will happen in this decade. Sensors will become more intelligent. From drones to cell phones to cars, everything is becoming digitised. As a result, the physical and digital world will blend much more than before.
The point of intersection between the physical and digital world will create a pattern whereby the digital is superimposed on the physical world. Technically it is known as mixed reality. With this, one can see objects at scale. Just as data can be validated, objects at scale enable decision-making as well as problem-solving. Surgery, remote assistance and collaborative product design are examples of the digital and physical world coming together. We will see more of this in times to come.
As the digital and physical worlds merge, industries are becoming more and more dynamic, and design is more autonomous. Autonomous systems will have a range of applications like machine calibration, smart solutions and industrial robotics.
There will be a wider usage of digital simulations. They will help in taking real time decisions. R&D is expected to boost digital simulations opportunities.
Already the Government of India has adopted technologies like AI, machine learning, deep learning and cognitive computing. A sharp rise in investments from the government and organisations is expected this decade. Money and infrastructure is expected to go into strengthening technologies such as internet of Things and machine-to-machine.
As we continue to harness the potential of Industry 4.0, in the coming years, 5G or the fifth generation spectrum wave will reinforce the growth of Industry 4.0. 5G’s low latency as well as electrifying speeds will be leveraged for IoT applications, manufacturing industry, robotics and data driven services. Flag-bearers of 5G technology will comprise professionals with software and technical expertise, along with working knowledge of IoT, algorithms and big data.
All that it required was a virus to bring the world together and share their collective concern.
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