Technology Intensity and Employment in the Indian Economy

Abstract

The article investigates the impact of technology on employment in key sectors of the Indian economy. The analysis encompasses services and manufacturing sectors. The services sectors include firms engaged in financial and non-financial segments, while manufacturing sector consists of firms engaged in production of consumer goods. The findings suggest that indicators that have affected employment in manufacturing sector are size of operations, import of capital goods and better human resource (HR) practices, while in financial services sector, the factors affecting employment are better HR policies, profitability and expenditure on Information and Communications Technology (ICT). Whereas in non-financial sector firms, import of capital goods and expenditure on training and welfare of workforce significantly influenced employment. The distinguishing finding is that association between employment creation and age of firms is negative in financial services sector, while age of firm is immaterial in manufacturing and non-financial sectors. The study uses Prowess database for the period between 2011–2012 and 2015–2016. JEL: O14, O15, O33