An HSBC report released last week notes that 41 per cent of the Indian businesses it had surveyed accorded top priority to investment in technology and innovation. “This was the highest across all markets covered under the survey and significantly higher than the overall average of 28 per cent,” the report adds. The bank had reached out to more than 2,600 companies across 14 global markets in the world, including 200 from India to note their priorities in the next five years. And that has a cost, as a Mckinsey report of 2019 on the digital transformation in India notes. It had estimated that “all or parts of 40 million to 45 million existing jobs (in India) could be affected by 2025. These include data-entry operators, bank tellers, clerks, and insurance claims- and policy-processing staff. Millions of people who currently hold these positions will need to be retrained and redeployed.”
Most of these jobs are in big cities, which means India’s enhanced love for tech will make it difficult for low-skilled workers to find jobs again in the metros. Some of the most affected are sunrise sectors like insurance and education.
A Boston Consulting Group report on the global insurance sector throws up some interesting data. The Asia Pacific sector (India included) has fared much better despite the turmoil. Regionally, the Americas have been the hardest hit (–26 per cent change in share price) and Asia-Pacific the least (–16 per cent), it says. But the gainers has been those that have gone digital with a vengeance, opening massive gaps between them and those who have lagged. “This is all about digital. Driven by the pandemic, there's a huge opportunity to leapfrog and become what we call a bionic insurer. It just means fully digitising the value chain and harnessing the power of artificial intelligence,” the report adds.
Pranay Mehrotra, Senior Partner and Leader of the Insurance Practice for the consultancy writes, “Insurers in the region can (not) be complacent – there is still much work to do to make sure that they are prepared for future challenges and leading the way when it comes to digital-first insurance organisations.”
A non-metro shift:
To beat competition, the insurance companies have slashed their army of insurance advisors who make those calls to clients and make the daily rounds collecting premiums. Again, data is not easily available. But even in predominantly rural states like Jharkhand or in the metros, non-life companies like Bajaj Allianz are collecting premium online. "In tier 2-3 cities especially in states like Bihar and Jharkhand employee transition to digital platforms are at 100 per cent levels. Almost the entire action at the branch level can now be done through Chatbot and WhatsApp", a company spokesperson said.
Still the gainers seem to be the smaller towns. LetsTransport is a logistic-tech aggregator for trucks. Pushkar Singh, CEO of the company has an app that connects small time truck owners with companies like Coca Cola, Amazon or HUL. "My business is obviously larger in metros, but it is the next rung of towns where more trucks are registering each month now". He says these trucks where the owners double up as drivers do not have the bandwidth to create invoices or deal with other paper work that the large consumer goods companies insist upon. His company acts as the interface for about 75,000 trucks in mostly North India. The tech adoption has been sharper in the non-metros once the lockdown was announced, he said.
The same trend is visible in the education sector. The pandemic became a game-changer for Edtech, even before the noises were made for the New Education Policy. Enrolment for online classes has hardly flagged as per data. The HSBC report says getting access to advanced technology was chosen as their top priority by 38 per cent of Indian firms, again the highest across all markets it measured. Another BCG report says "our research indicates more than 80 per cent of company leaders expect to accelerate digital transformation as a result of the crisis. It’s no longer an interesting concept; it’s a business necessity.”
The necessity is visible in Shakarpur in East Delhi, possibly the largest hub for coaching classes for chartered and cost accountancy, where the one-room tutorial places are desolate. The students have moved online, at least those who could. Offline classes had also spawned a huge tiffin services and, of course, book shops. While some of those book shops have limped back, the tiffin services have got wiped out. None respond to the mobile numbers plastered all over the area. The classrooms aren't expected to open any time soon. The workers who used to scurry across the classes ferrying tiffins across the roads, have also not returned.
Some of the change is also because of delays in restoration of train services. The Indian Railways has again pushed back plans to resume operations. This has made it difficult for those who want to return.
Based in Shahdara, Delhi, one of the hotspots of Covid-19 pandemic in the city, Sushil Kumar runs an air-conditioner repair workshop, depending mostly on calls from apartments for his business. “I had four workers, but none of them have returned after May,” he says. After the disease numbers eased up, he has begun moving to his clients’ residences but has shut out the role of the workers. Instead, he carries a larger portmanteau of equipment to offer repairs to air conditioners on the spot. Paisabazaar (dot)com which claims to be India's largest digital marketplace for lending products, has just announced that it has introduced its credit report initiative in three more languages besides Hindi and English. The company claims 36 per cent of its customers come from the states of Maharashtra, Karnataka, Telangana and Andhra Pradesh, who need the information in local languages. One impact of low demand for space in metros from low-skilled workers could be weak demand for concessional rental housing. The government has just cleared a plan under the PPP model for converting vacant government-funded housing in cities into rented spaces for migrants at concessional rates of Rs 1,000 to Rs 3,000 a month. There may not be too many takers for them.