HUMAN RESOURCE DEVELOPMENT FOR AUTOMOBILE SECTOR GROWTH

SYED ALAMDAR ALI, Hailey College of Banking & Finance Lahore
May 19 - 25, 2008

Automobile is an economically strategic sector in many countries, contributing strongly through upstream and downstream activities to national production, employment and technological capacity. Increasingly efficient mass-production techniques have made car ownership affordable to a growing segment of the world's population, beginning in Europe and North America in the first decades of 20th century and extending rapidly throughout the all continents. In the 21st century, world automobile industry is in a state of ebullient confidence induced by the prospects of millions of new consumers in emerging economies, most of them eager to join the 'automobile civilization'. Most manufacturers are expanding capacity in order to reap the expected market opportunities where they are most promising. The industry is also in the process of a global re-engineering of the entire production chain, spurred by technological innovation, which makes possible the development of new models within ever shorter cycles and at lower cost.

Major manufacturers are pursuing a strategy referred to as a 'multi-domestic approach' in which they aim to reach a balance between local production and global sourcing. It involves a shift from large-volume operations to projects tailored to local conditions. In this perspective, a high degree of self-sufficiency in production and consumption is likely to occur in major producing regions. Trade will tend to become increasingly focused on specialized models or brands which are produced in one location and exported to countries where local demand is insufficient to justify national production of the model in question. The global re-engineering of the industry is having a major impact on manufacturing and organizational processes. The traditional pattern, where manufacturers were strongly vertically integrated producing in-house the majority of parts has shifted to 'lean production', with more parts manufactured by independent suppliers (by 'outsourcing', for example) and with fewer larger suppliers ('first-tier suppliers') who are assuming more responsibilities at the design and conception stages and are supplying complete sub-systems (for example, complete automobile front-ends as opposed to independently supplied bumpers, lights and fixtures). First-tier suppliers are also required to deliver on a 'just-in-time' basis wherever final assembly is taking place. Keeping in view the requirements of changing business technology at a greater velocity, the need of time is very high caliber human resources who could adapt to the situation accordingly.

It may be argued that Pakistan's vision for HRD is necessarily both backward and forward looking given the particular history of the country. The systematic denial of access and equity necessitates concerted efforts at redress. At the same time, the desire to build a new Pakistan on sound economic and social foundations requires a focus on an inclusive higher skill future that equips our country for improved international competitiveness.

The key intended elements of the overall Pakistan's HRD Strategy should be as follows:

An expansion of early childhood development, both in terms of numbers covered and in terms of what the notion itself means;

A further strengthening of general education, ensuring that quality and quantity of provision are improved;

A building of a system of adult basic education and training that is responsive to both social and economic demand;

An increase in participation in both school and college variants of further education and training, and an improvement in quality and relevance of provision;

A transformation of workplace skills development that is both inclusive and high quality;

A progressive increase in participation in higher education and a shifting of enrolments towards areas of scarce skill;

An emphasis on improving expenditure and outcomes from research and development.

There has been progress across these areas but it is evident that the transformation is still in its early stages. The challenge of balancing inclusivity and quality / high skills is particularly challenging.

The industry has its origins in decisions by international automotive manufacturers to assemble vehicles in Pakistan for Pakistani market in the context of import substitution policies. As a result, the skills requirements were relatively modest. What were of more relevance were the growing size of the Pakistani consumer market and the well-developed infrastructure of the country. Nonetheless, the presence of artisanal skills related to engineering was clearly a necessary condition for the establishment of the first assembly plants. Such skills had begun to be developed in Pakistan with the establishment of many vocational centres throughout the country. By the end of the 20th century, these waves of economic development had resulted in the creation of significant engineering capacity, which spanned to establish many Engineering Universities and Engineering departments in many other universities. These include, UET Lahore, UET Taxila, SZABIST, GIK, NUST, Mehran UET, NED University of E&T and many others universities that have established their engineering departments.

Although the automotive industry had been relatively sheltered by import substitution policies, it continued to be partly owned by major multinationals. In ways that were specific to country of ownership, the automotive industry began to look closely at skills issues and technological upgrading as part of an attempt to catch up with trends elsewhere in these corporations, particularly in the Japanese-owned firms, with their high proportion of foreign-owned equity. The leading trade union for the sector should see the importance of these issues themselves and develop a strong case for a highly skilled workforce where they be provided training to cop with the changing scenarios on real time basis.