I've written about the idea of unintended consequences before. Unintended consequences are the bad outcomes that come from perfectly good intentions. They usually occur because people don't think through all of the interrelated consequences of their actions.
I've just attended a conference in India where I can foresee the government pursuing a very logical concept that will likely reap a consequence they don't want. The numbers in India are unbelievable. There are roughly (nobody has an exact count) a half a billion people in India under the age of 25 ... and a huge number are coming into the workforce every year. To find jobs for all these young people, the government wants to set up training programs modeled on the U.S. Some of these training programs make a lot of sense. They're looking at the hospitality industry as a new source of jobs. Hospitality is growing rapidly around the world and, as a service industry it creates a lot of jobs for each dollar of revenue. So that's good.
Another industry they're looking at is retail. This one is much harder to understand. The good intention is to streamline the retail industry and increase its productivity. Now, this was my first trip to India, but what is striking about the country is the scale of the retail sector. There are literally millions of little shops run by individuals or families. They look incredibly inefficient, but, on the other hand, they employ a lot of people. If you could somehow transform this chaotic system and make it more like the US, it would certainly become more efficient - but it would eliminate a lot of jobs. In this case, the inefficiency of the existing system is supporting a large workforce (albeit at extremely poor wages). A new, more productive system would increase wages, but eliminate lots of jobs. So, if the government of India is seeking to increase employment, it might be well advised to look at training workers for other industries.
I've just attended a conference in India where I can foresee the government pursuing a very logical concept that will likely reap a consequence they don't want. The numbers in India are unbelievable. There are roughly (nobody has an exact count) a half a billion people in India under the age of 25 ... and a huge number are coming into the workforce every year. To find jobs for all these young people, the government wants to set up training programs modeled on the U.S. Some of these training programs make a lot of sense. They're looking at the hospitality industry as a new source of jobs. Hospitality is growing rapidly around the world and, as a service industry it creates a lot of jobs for each dollar of revenue. So that's good.
Another industry they're looking at is retail. This one is much harder to understand. The good intention is to streamline the retail industry and increase its productivity. Now, this was my first trip to India, but what is striking about the country is the scale of the retail sector. There are literally millions of little shops run by individuals or families. They look incredibly inefficient, but, on the other hand, they employ a lot of people. If you could somehow transform this chaotic system and make it more like the US, it would certainly become more efficient - but it would eliminate a lot of jobs. In this case, the inefficiency of the existing system is supporting a large workforce (albeit at extremely poor wages). A new, more productive system would increase wages, but eliminate lots of jobs. So, if the government of India is seeking to increase employment, it might be well advised to look at training workers for other industries.
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