Disappearing Jobs in the Public Sector

Impact of Artificial Intelligence

Public sector in India is by far the biggest employer in India. If one looks up the top 10 employers in India, it becomes rather glaring that the Indian government (Central and few of the state governments along with Indian Armed forces and Indian Railways) are the biggest employers. While, the list is a long tail which can well be classified as 15 Key Sectors (Chart-6), 23 Specialised Sectors (Chart-7) and 20 Emerging sectors (Chart-8). Key sectors are the traditional sectors or the sectors as approached traditionally from the past. Specialised sectors represents the next generation of (Employers) sectors, while in some manners, they could be identified as a subset of the Key sectors. Lastly, the Emerging sectors might even ensure some eybrows raised the readers ;) as they constitute some new labels for some key sectors or specialised sectors and some of them are even projects or schemes from the government and perhaps run with independent vigour arguably necessary.

Chanakya, in his ‘Chanakya Niti’ wrote that Government jobs are the most secured job for citizens nearly 2300 years ago. This held good all through the centuries and even millenniums. Things told in Religious books have been re-interpreted to present circumstances but it appears that what Chanakya thought and wrote way back then, seem to be as relevant as ever. What is interesting is, Most of the Urban and educated Indians think that it is important for the growth of a Nation to move away from dependencies on the Public sectors and significant jobs dependent on Public sectors / Governments. That was pretty much the argument World Bank and Indian Monetary Fund made for India to open the economy. Thereby allowing outside and foreign investments in the space dominated by Public sectors. This has consistently reduced the jobs in the Public enterprises. The below chart gives you a better idea on how the numbers have changed over the decades.

Before I continue with the state of Public sector jobs and their future, Let us bring the top Economies in the same decades to understand how they have shaped up and what is the status of Public sector jobs in these leading Economies of the World in Chart-1.

Globally Public sector jobs have been crucial in providing job security to the major portion of the population. Though it is in the decline as you can see in the above chart and across all the Countries, there are few very interesting aspects. The traditional argument about sustaining Public sector jobs was regarded as a model preferred by Communist and Authoritarian form of governments while the countries opting to go towards a faster Economic growth / Capitalist model were the Democratic form of of Governments expected to be reducing the Public sector jobs. Clearly the data forces us to un-box such thinking. While China, Communist to authoritarian form of government is observantly reducing the public sector jobs. Germany a hall mark of Capitalism with Democratic form of government in the liberal Western economy is almost comparable to China in the public sector jobs.

If we consider an overview on factors Influencing Public Sector Employment

1. Welfare State Models: Countries with comprehensive welfare models tend to have higher public sector employment. This is particularly evident in Nordic countries where extensive public services are provided.
2. Economic Structure: In countries where the private sector is less developed or where there is significant state control over the economy, public sector employment tends to be higher. This is often seen in some Middle Eastern and African nations.
3. Government Policies: Policies aimed at reducing unemployment can lead to increased public sector employment. Additionally, countries with a focus on education and healthcare often have larger public sectors.

Some more Statistical Insights:

• Nordic Countries: Public sector employment can be as high as 35-40%.
• Western Europe: Generally ranges between 20-30%.
• Middle East: Can exceed 40% in some oil-rich countries.
• Sub-Saharan Africa: Varies widely, but can be significant in countries with weaker private sectors.

Given this scenario, India has not done badly at all. The chart-3, gives a good idea to that effect and also helps one understand India’s position in the top 10 GDP countries shared in chart-1. Then, Why is it that India is at the top of the leader board for Public sector jobs?

1. Does India have a welfare state model? Though partially, far from the Countries I am referring to above.
2. Is India’s Private sector less developed? Far from it. The chart-3 is a good indicator in support of that argument.
3. Does India have increased focus on Education and Healthcare? Clearly Chart-2 suggests otherwise as Education is in 3rd and Healthcare is in 5th position. Policies clearly are the aspects impacting this.

While I welcome your thoughts on this, I will not indulge in this direction any further in this article.

As India leads the chart as a leading Public sector jobs creator among the top 10 economies globally, it is clearly not ‘the’ leading public sector jobs creating country in the world. Here is the chart-4 gives an idea on the unemployment rate across the top 10 Economies globally. Many may not agree with the suppositions in the chart and I am just going by the data available in the Public domain and not trying to peddle any one side argument or narrative. I request the readers to keep aside their personal opinions on the narratives on a Country’s claim or a ruling dispensations claim and purely look at this from a broader argument I am trying to present the case with.

Now let's look at the largest employers in the Indian Public sector space. With the advancements in the technology and AI that is evident and also as captured in my Book “What on Earth is AI: Exploring AI in the 80/20 Future”. significant amount of jobs across sectors and including the Public sectors will be displaced within the next 10 years. I have presented jobs getting displaced from 20 Industries contributing to nearly 80% of the jobs in the book. Its not about proving Chanakya’s statement but being relevant globally. If, India intends to keep up the economic growth and move up the leader board of the leading economies globally, they can not be ignoring technology developments and keep ballooning the public sector jobs for the sake of creating jobs and at the cost of the over all development of the Country and the welfare of its citizens.

One of the ways to Globally recognise the Powerful Nations are the strength of its Armed Forces. As such Technology prowess is replacing the might of Man Power and it is best reflected in the ongoing conflict between Ukraine and Russia. Chart-5 gives a comprehensive view to each country’s man power and other informations including their ammunitions and infrastructure necessary to fight. While, Ukraine have been significantly outnumbered by the manpower, and other infrastructure they have sustained the fight for 886 days (As on July 30th, 2024). While this can be attributed to the support of NATO, it is also evident that the support has significantly been in terms of smarter ammunitions and equipments apart from intelligence and external pressure from the global (Western) community lead by USA enforcing Economic embargo on Russia. I don't want to discuss any further on what is keeping the Ukraine interests alive in this situation.

I want to primarily highlight the fact that presently Indian Armed forces have nearly 85% of the work force constituting Soldiers. It is of great importance if India is to face a War like situation on any side of its borders, today. With the evolution of Technology and particularly in AI happening to such an extent, how the Nations will go to war will also change. A Nation need not send Armed Soldiers to the borders in extreme and threatening conditions. Neither do they have to hire citizens of other countries as mercenaries to fight their battles. Future wars will be fought with Bio Warfare, Cyber War, and Robots with unmanned drones and directed energy weapons. All these are possible as Technology makes it so effective for a Nation to develop a small number of technically qualified BioTech engineers or Computer sciences engineers with hacking skills or build factory operated by robots to manufacture robots or such in the near future. By the turn of this decade, That is within the next ten years, all these skills will very much be with AI powered systems and they can produce viruses personalised to a particular ethnic community or certain bio markers and be equipped to deliver them as effectively that no human resource will be required. It is as crazy as it sounds, I am referring to Technologies that can displace Humans to kill or destroy Human assets far more effectively than Human beings in greater numbers could ever achieve.

While, globally, the job displacements will be a reality Public sector jobs will also find it challenging to keep up and at least the traditional jobs will get displaced. Governments may delay the process of letting go depending on the ruling governments political challenges or limitations but it is an eventuality. Jobs are one of the most important aspects that can contribute to the future of any Nation, it is a factor of significant concern for the Politicians or Political parties and Bureaucrats for their own relevance in the power equations. This is why, Politicians and Bureaucrats have to start thinking a little beyond the next elections and next postings to next ten years at least. Their actions and stands today can secure a better position for them in the next ten years. Governments and Administrators can no longer delay adopting to new Technologies to suits their personal agendas. Doing so will set their States and Nations behind significantly and everybody have to keep up with the race. Having said that, it becomes paramount to start thinking as how the Nations will keep and engage its population healthily and meaningfully.

Future is exciting, unpredictable and uncertain as it ever was and perhaps more. India as a Country progressed and advanced as many say attributed to its citizens ability to adapt or “Jugaad” despite the shortcomings of the Governments or Administrators. The same may be too much to expect in the future that we are getting into as, this future is demanding far more energy, far superior infrastructure, far more accountability in administrators, and all these with better policies, systems and Institutions. We have to envision a world with far lesser Public sector jobs and start working towards it. Starting today. We do not have another five decades to go in this direction. We perhaps have a decade at best to make this happen. It puts the ball back in our court, Only us, you and me as citizens can make it happen by getting our policy makers to start thinking in this directions and as Leaders and Entrepreneurs building or navigating our businesses to be more sustainable and profitable.