ICT R&D Grants Programme for Asia Pacific

This project seeks to examine how different modes of use of information and communications technologies (ICTs) impact labour market outcomes in developing countries. Policy makers in developing countries face a fundamental dilemma as they try and take advantage of the ICT-led third industrial revolution. On one hand, since ICTs are a new and rapidly growing economic sector, creating an ICT industry can generate vast employment opportunities. Further, since ICTs are also enabling technologies, the growing share of knowledge-based production globally warrants that, from a macro-economic perspective, economies develop a degree of technological capability in this sector if they are to compete in international markets. From a micro-economic perspective, promoting ICT based industrialisation and deploying ICTs in pre-existing industrial sectors can impart greater flexibility and efficiency to production systems in user industries.

On the other hand, even as the development of the ICT sector promises to generate new employment by creating a demand for fresh skills and new occupational categories that may not be readily available even in developed countries, the deployment of ICTs in existing industries creates challenges by transforming the organization of production. At one level, automating production can displace labour. But even if labour redundancy in numerical terms in not an issue, rationalizing production by deploying ICTs is likely to render existing skills redundant, profoundly altering patterns of labour demand. These seemingly contradictory tendencies highlight the importance of a clear understanding of how the production and use of ICTs will affect labour markets. In contrast to the extent of interest in these issues in developed countries, the labour market impacts of ICTs have received little research attention in the context of developing economies even as they strive to simultaneously provide quality employment and to improve overall economic productivity and efficiency.

Research in developed countries, by organisational theorists and labour economists, clearly shows that there is no linear causal relationship between technological change and labour market outcomes because of the diversity of mediating factors. The impact therefore varies across sectors and organisational types within sectors, critically influenced by institutional factors that mediate between technical improvements and their use in organisations. Policy makers then are faced with pressing questions about how ICTs are likely to affect the quality of work and careers, skill enhancement, and autonomy at work. Questions are also raised as to whether ICTs foster equality or reinforce existing labour market segmentation, such as those based on gender, observed in traditional sectors. The proposed study will help answer such policy questions by examining the impact of ICTs on the Indian labour market in two different industries. One is the IT enabled service industry, a new (at least in India) ICT based sector that has emerged in the last five years. The other is the older automobile and automobile components manufacturing industry, which is deploying ICTs extensively to reap productivity benefits. The study seeks answers to the following research questions.

II Research Questions and Hypotheses

1.Does evidence from the ICT service industry and the automobile and component industry in India suggest that the promotion of ICT based industrialization in developing countries leads to:

skill polarisationi.e. skilled workers with better knowledge of use of ICTs have better career and work opportunities, leaving the rest of workforce in dead-end, low-paying jobs.
deskilling i.e. ICTs render traditional skills redundant and therefore tend to deskill the workforce.
disintermediation i.e. ICTs reduce transactions costs involved in information flows within an organization and therefore undermine the need for middle management.
gender neutrality i.e. ICTs reduce the need for physical labour and create white-collar jobs. Women, therefore, would find better employment prospects due to diffusion of ICTs.
flexibility i.e. ICTs reduce coordination costs, allowing firms to rely on external labour markets and, therefore, promote greater labour market flexibility.
autonomy at work i.e. ICTs ensure greater access to information among employees, therefore helping decentralized decision-making and giving employees greater autonomy at work.

2. How does the impact of ICT based industrialization on labour markets in India compare with changes observed elsewhere (developing and developed countries)?
3. What are the implications of the results of hypothesis testing and the comparison with other countries for:
Policy intervention in labour markets in developing countries
The relationship between technological change and labour market outcomes
In the following sections, we discuss the methodology used in the study, the results of our empirical examination and the implications in relation to the issues that the study seeks to address.

III Progress and Organisation of the Study

The study commenced from April 2002, with a detailed review of literature to locate the issue to be explored in larger theoretical debates on the impact of information and communication technologies (ICTs hereafter) on labour markets (next section). The exercise also was meant to draw insights from empirical studies undertaken elsewhere in relation to some of the themes indicated in the proposal. Most studies deal with experiences in developed capitalist economies, further emphasising the need for similar exercises in the context of developing economies mired in large-scale chronic unemployment and underemployment on the one hand, and insecure employment in the informal economy on the other.

Subsequent to this exercise, secondary data pertaining to the automobile sector and ITES industry in India were collected, which is used to stress the relevance of the choice of the two sectors as well as to delineate the key characteristics of the two sectors. Gaps identified are filled by recourse to primary data collection. Draft questionnaires were developed; one each for Human Resources Heads in the two sectors and one each for employees in the two sectors taken up for study. Pilot testing was done in one firm each in the two sectors. In the automobile industry, it was found that the impact was highly differentiated across jobs in the occupational hierarchy. Hence, a random sample survey proved to be a highly inadequate method for collecting data, especially given the large numbers employed and small sample size decided upon. However, a purposive sample could have been used, taking employees from each level. Given the reluctance of firm management to allow us to conduct such a large-scale survey among their employees, and the need to collect information on employees employed at different levels, we discarded such a method for a case study approach after a carefully evolved typology of firms and jobs. We reduced the number of firms to be studied from 15 to four, and more employees taken up for study in each firm. A checklist is used to collect information from heads of human resource departments on firm level changes in recruitment patterns, employment levels and reasons. A checklist is used to elicit information from the employees and the interviews were in a semi-structured format (Annexes I and II).

In the ITES sector, we focussed primarily on the call centre industry that has few levels in the organisation, making it amenable to a sample survey. Structured questionnaires are used for collecting most data from the employees and Human Resource heads (Annexes III and IV). Information on stress levels, reactions to the work environment were collected subsequent to the structured interview through follow-up questions in the form of a free-wheeling interview. Information has been collected from four automobile firms, three call centers, one medical transcription firm and one back office processing firm. In the automobile industry, a total of 80 employees have been studied so far and from the ITES industry, only 60 have been surveyed. Reluctance on the part of management to provide information or permission to interview employees prevents us from accessing more respondents during the period of study. However, interviews with key informants and more detailed case studies are undertaken to capture additional dimensions of work and employment.

IV. Contextual Background to the Study

Promotion of information and communication technology (ICT hereafter) based industrialisation has been the concern of many a state initiative in the less-industrialised countries including India. The reasons are quite clear. Its adoption by user industries imparts greater flexibility and efficiency to production systems. Two, the growing share of knowledge-based production at the global level warrants economies to develop a degree of technological capability that would equip them to compete in the global market better. And finally, given a perceived ability to create decent employment opportunities, governments perceive the promotion of ICTs to be critical to employment generation. Its net effect on employment generation apart, its potential to shift patterns in skill demand, to alter existing patterns of labour market segmentation and thereby reduce or aggravate inequities across segments is even more important to labour market intervention. A critical review of literature pertaining to these aspects of ICT diffusion is therefore warranted to understand the various dimensions.

Earlier, labour market changes brought about by new technologies were very much along the pattern posited by Braverman (1974). Skilled jobs, mainly the jobs of men in manufacturing industries of developed countries, were either deskilled over time or reduced due to automation. Simultaneously, there was an expansion of low-skilled jobs particularly in the manufacture of electronic components which offered considerable employment opportunities to less skilled women in several developing countries, especially in south east Asia. Such trends tended to create visions of new technologies favouring women's employment unlike traditional technologies that denied women access to the domain of paid work.

Also, diffusion of ICTs has increased the ability of firms to link distant markets, economise on inputs and increase speed of product design, development and production. The potential created by the enormous flexibility of the microelectronic technologies opens up new avenues of employment opportunities, which is yet to be realised in several low-income economies including India. Since the same equipment can be used for a large variety of designs and production processes, producers can switch between different designs and products as well as quantities of output without deleterious loss in efficiency. They are therefore in a position to undertake mass customisation without significantly adding to their unit costs. However, for such production to be efficient, it is imperative that the labour working on those machines understands the new technologies and is also well informed about product market trends. Moreover, for a smooth transition from one product or process to another, the workers need to work in close cooperation with one another as well as with management. New technologies are therefore argued to provide an opportunity for a more creative engagement with work for labour as well as encourage teamwork (Piore and Sabel, 1984).

Trends of deskilling and feminisation of employment on the one hand, and creation of creative, artisan-type jobs on the other hand, are therefore widely noted. However, the impact of diffusion of ICTs across different sectors in the economy on the labour market remains under explored in less industrialised regions like India characterised by multitudes of production relations and labour market institutions quite different from that in advanced capitalist economies. In low-income countries like India actively striving to compete in global markets and promote ICT based sectors, such diverse outcomes of ICT use can pose anxieties. Uncertainties exist not only about the likely size of the additional employment in this field in India, but also importantly about the nature of those jobs, the kind of labour that would be required for them, and the prospects of it being available and actually drawn from among women. As several studies have pointed out, there have been marked differences in the impact on labour processes of these new technologies, even between countries at apparently similar stages of development. It has also been pointed out that the pace and form of utilisation of available technologies are crucially dependent on the institutional background of a given economy (Freeman and Perez, 1988). Given the lack of adequate understanding of the relationship between diffusion of ICTs and labour market impacts in India, a study of this kind becomes important.

V. Analytical Review

ICTs play out their impacts at the micro-economic level within certain broad macro-economic contours. The important contextual feature that needs to be privileged is the growing reliance on the world market for economic growth among the less industrialised regions. Limits to import-substitution based industrialisation (ISI) has forced governments in these countries to resort to a greater reliance on the external market for inputs and outputs. Ensuring competitiveness in the world market therefore assumes an unprecedented importance among policy makers of these countries. Production structures have to therefore cater to such markets effectively.

Accompanying this process of globalisation has been changes in the characteristics of dominant global output markets. To begin with, it is observed that there is a shift from production based on mass markets to one based on fragmented and flexible markets. The earlier era typically characterised as Fordist, emphasised mass production technologies, scale economies, detailed technical division of labour, divorce of conception from execution leading to monotonous, routinised work for a majority of the work force and a hierarchical organisational structure. Productivity and hence, the profit rate was sought to be raised through scale economies. Goods were relatively homogenous and produced for mass consumption. Wage rates were linked to productivity increases, thereby ensuring a steady market for the mass-produced goods. Mass production facilitated a greater technical division of labour and both in turn led to the creation of a dual labour market, with a managerial and designer elite at the top, leaving the numerically larger manual workers at the bottom of the hierarchy undertaking less skilled tasks. Job mobility was primarily internal and dependent on period of employment. Further, the rise of vertically integrated large firms helped the formation of class-consciousness and consequent development of worker associations to protect their interests.

The Fordist organisation, embedded as it were in a Keynesian welfare state in most advanced capitalist economies, assured employment security and social welfare to most employees. Mass production enabled a significant number of citizens to access goods never available or affordable to them earlier. Within this framework it was possible to successfully formulate and implement collective bargaining arrangements related to salaries, working conditions and leisure time for a significant share of employees in the manufacturing and services sectors (Marglin and Schor 1990). [1]

This seemingly stable arrangement began to reach its optimal productivity levels by the end of 1960s. Inflexibility of wage rates due to strong worker associations, in conjunction with the inherent limits to extent of division of labour soon forced decreases in profitability of capital. This crisis in Fordism is held to have set off two crucial processes. One, firms in the advanced capitalist economies began to move out of the confines of the domestic market to explore new markets, especially in the peripheral economies. Second, and more important in the context of this study, they began to shift the labour-intensive segments of the production process as a means to cut down costs of production (Froebel, Henricks and Kreye 1980). Simultaneously, at the level of the nation-state, the crises led to a weakening of the welfare regime and initiated the process of cutting back on social security provisions. The last mentioned factor along with the shift of manufacturing operations to the periphery is argued to have led to the demise of mass consumption due to skewedness in income distribution. [2] This collapse of mass markets, leaving in its economies towards assuring scope economies through greater product differentiation and adaptability to customer preferences. The resultant industrial organisation system best suited to the new production and distribution has come to be termed as post or neo-Fordist, or flexible specialisation systems (Amin 1994). They are characterised by the following:

· Heavy dependence on ICTs
· Customised products and services
· Greater inter-firm division of labour, but well-networked with one another and with clients
· More flexible and ability to rapidly adapt to changing market conditions
· Less hierarchical, decentralised organisational structure, empowered, creative workers, encourages team-working
· Global Operations

The increased diffusion of ICTs has therefore taken place under such sweeping organisational and market changes and in fact appears to aid this process. Impacts on labour, often attributed to purely technological change, are therefore an outcome of a complex interplay of all these factors.

1. ICTs and Employment in Developing Countries with special Reference to India

Impacts of ICTs on the organisation of production and employment in industrialised and to a limited extent in less industrialised countries have been extensively discussed (Castells 1999; Bryanjolfsson and Hitt 1998; ILO 2001). Discussions essentially relate to its enabling potential for employment and quality of work, and questions are raised as to whether such technologies foster equality or reinforce existing polarities between regions, classes and gender. Studies also point to the opportunities they present for low income countries (LICs), in terms of employment for school leavers and earning foreign exchange, and on the unsubstantiated expectation that such relocation of work offers the opportunity to 'leapfrog' into a new technology age in which LICs could have a comparative advantage (ILO 2001). Since this technology is not matured, they are at early stages of the product life cycle, which enables firms in developing economies to build capabilities much faster (Perez and Soete 1988). Second, many sectors within iCTs rely more on human capital and less on physical capital investments rendering build-up of human capital base critical to the 'catching-up' process. It is therefore believed that developing economies that have a strong human capital base like India may be successful in such efforts.The discussion on the diffusion of ICTs in such countries, has however, by and large ignore the contractual position, wages, career paths and working conditions including employee health and safety of new technology workers. Given the amount of interest in these issues within the advanced capitalist economies, this is a serious omission.

Simultaneously, with the increasing role of information processing and micro-electronic based technologies in production, even in traditional sectors, a failure to develop technological capabilities in this sector poses a serious threat to such economies. Lack of infrastructure, physical like telecommunications, or social like educational institutions, do constrain economies from taking advantage of this 'window of opportunity'. In such a context, the new technologies may result in creating or accentuating economic inequality between regions. This has led to a series of state initiatives in many of the less-industrialised regions to promote sectors that produce information and communication goods and services, but importantly sectors that are enabled by these technologies. India has been a forerunner in this regard, and has managed to build capabilities in some segments of ICTs, especially in the software services segment. However, studies also observe that there are several barriers that restrict firms from moving into more value-adding segments of the sectors (Heeks 1996).

The promotion of ICT sectors in India takes place amidst concerns of large-scale underemployment and employment generation initiatives by policy makers. Despite more than five decades of planned industrialisation, access to employment in the formal sector in India is confined to less than 10 per cent of the total workforce in the country. Given that regulated work conditions, wage levels and employment security are confined to this sector, policy initiatives to enhance employment in this segment is important. Even within this formal sector, however, disparities based on gender and caste continues to be reproduced (Rothboeck and Acharya 1999). Policies like positive discrimination in the public sector and promotion of sectors that employ women have been formulated to generate social equity through employment in this segment.

Significantly, since the 1980s, there have been strong indications of a job-less growth in the organised manufacturing sector (Nagaraj 1994; Goldar 2000). Even in the 1990s, we observe that employment in the organised sector as a whole has only grown at roughly an annual average rate of 1.5 per cent between July 1987 and December 1997. [3] The problem has been further compounded by a burgeoning supply of educated youth seeking employment in the formal sector. It is in this context that the significance given to the ICT based sectors like the software sector needs to be understood. In India, rooted in four decades of import-substitution based industrialisation, a relatively healthy base in ICT production has been created. This, coupled with trends at the global industrial level, has led to the creation of a vibrant software industry. Despite being located in a peripheral region, it is one of the fastest growing segments of the global software industry. A consistent annual growth rate of over 50 per cent throughout the 1990s is unparalleled, which is believed to continue in the years to come (Kumar 2000).

Therefore, the government has identified ICTs to be a thrust sector for future growth in national wealth and quality employment. [4] The period since the 1960s has also seen the government emphasising the need to reduce employment discrimination against women, especially in the public sector (Banerji 2000). The recently established IT taskforce to the government which addresses the future of IT industry including software production expects a net employment creation by 2.2 million employees by the year 2008 (NASSCOM 2000). Further, this sector, especially IT-enabled services like call centres, medical transcription, back office work processing, etc., are held to offer considerable employment avenues for women unlike the traditional manufacturing sector (Mitter and Rowbotham 2000). Elsewhere, especially in the South East Asian newly industrialising economies (NICs), introduction of ICT sectors like information processing and hardware assembly led to the entry of large numbers of women into the labour force, lending credibility to such initiatives to enhance women's participation in the workforce (http://sdnp.delhi.nic.in/resources/labour/news/bl-24-8-women.htmlref). Given the potential role envisaged for ICTs in both employment generation and reduction in labour market segmentation, it is worthwhile to understand the various approaches and examine empirical support to them as a prelude to our enquiry.

At another level, the reduction in internal and external barriers to entry has forced firms in traditional manufacturing sectors to explore new markets and reckon with competition from new firms, especially technologically superior transnational firms. Such pressures have forced firms to turn to deployment of ICTs to reduce costs as well as to cut lead times and make organisations respond efficiently to market changes. It also meant that firms have to improve the quality of non-production functions like marketing and after-sales service. ICTs play a major role in effecting such changes in both intra-firm processes and in transactions between firms and their suppliers and service providers. The Indian automobile industry is an exemplar in this regard. With the entry of a number of new firms, older firms have resorted to organisational innovations like Japanese management techniques along with introduction of ICTs to transform organisational structure and processes. The changes do have repercussions for employment and quality of work. Prospects for disintermediation may entail both loss of jobs as well as reduced or enhanced prospects for mobility. Organisations can take advantage of information availability to increase transparency as well as decentralise decision-making, thereby enhancing the responsibility of workers in lower levels in the organisation. Automation may lead to job losses in the shopfloor as well apart from reducing the quantum of routine tasks that are to be performed. The industry also offers secure employment in the formal sector in large numbers apart from providing employment to many others in the informal sector through its supplier base and other linkage effects. The organisational innovations sweeping the industry may have significant impacts not only on the inter-firm division of labour but also on the quality of work generated across these firms. In the next section, we review the literature on the impact of ICTs on work and employment at the global level.

2. Overview of Findings on ICTs, Work and Employment

It has been observed that the impact of technical change on quality of work and employment are crucially mediated by organisational imperatives (Holfman and Novak 2002). At the same time, organisational forms, outcomes of a multiplicity of factors including technologies deployed, are also transformed as a result of adoption of new technologies. As has been observed in the case of substitution of water mills with steam power in the textile industry and the transformation of the putting-out system to workshop based production with the advent of centralised power sources, technologies even transform the spatial structure of an industry. That firms derive productivity benefits of new technologies only when their adoption is accompanied by appropriate organisational innovations is well documented (Murphy 2002).

The new organisational shift towards a more global, flexible mode, relies heavily on deployment of advances made in the realm of information and communication technologies to co-ordinate the decentralised production and distribution segments. While the movement from Fordist to post-Fordist organisational models was facilitated by developments in ICTs, the enhanced demand for these technologies in the post-Fordist context has set the ground for rapid technical change and growth of this sector. The rise of knowledge based production systems are also argued to play its part in reconfiguring the Fordist labour market into post-Fordist or 'flexible labour markets'.

Developments in ICTs enable firms to co-ordinate spatially dispersed activities without much increase in transaction costs through effective functioning of information networks. Another area where developments in IT have facilitated the new organisation is in the realm of production flexibility. [5] To cater to a highly customised demand, dedicated machines that perform routine tasks become redundant. Instead, machines need to adapt efficiently to changes in output and this has been made possible by the use of computer numerically controlled machines (CNCs) and computer aided design and manufacturing. Changing market trends play an overarching role in enhancing the need for ICTs in firms. Higher customisation, on the one hand, makes acquiring relevant information on finer consumer differences critical to successful competition. In addition, increased competition based on innovation renders decreasing the time to market period critical to competition. The importance of ICTs to firms operating in such a context of greater relevance of information is therefore obvious. Though this dimension is evident even in traditional industries like clothing, footwear, etc., it is especially high in the growth of the knowledge-based sectors like hardware and software sectors of computers, microelectronics and telecommunications. These changes are expected to exert a strong influence on work and employment, and also contribute to productivity and output increases in related sectors. [6] Further, given its ability to automate physically demanding manual tasks, it undermines the basis of gender-based discrimination witnessed in industrial labour markets and hence, offers the potential to provide employment opportunities for women, marginally represented in such sectors earlier. Research on the micro-economic impact of ICTs, apart from productivity impacts, can be broadly classified into three strands (Laudon and Marr); impact on organisational structure, on quality of work and on labour market segmentation. We examine each of these strands in the following sub-sections.

a) Impact on Organisational Structure and Firm size

One stream of enquiry, based on a transaction based understanding of firm formation, focuses upon how ICTs transform organisational landscapes; the inter-firm and intra-firm division of labor and its co-ordination through market or authority (Blau, 1976; Laudon 1976; Kling and Iacono 1984; Gurbaxani and Whang 1991; Carley 2000). It perceives the rise of firms due to imperfect information in markets and consequent costs associated with search and coordination as a determining factor. Organisations therefore have an optimal structure that minimises the costs of information acquisition and processing as well as its use in monitoring, etc. To the extent that deployment of ICTs enhance either the availability of information or increase the ease of processing, the structures need to be transformed to ensure better utilisation of ICTs deployed. In principle, ICTs are available to all firms in an economy. However, it is found that its effective implementation towards economic gains is dependent upon organisational restructuring to ensure an optimal structure given the new technological regime (Bresnahan and Greenstein 1997). There are various propositions concerning how ICTs can change organisations. To begin with, is the proposition that ICTs may alter firm size; lead to the rise of smaller firms. The arguments for this reduction in firm size proposition are two, labour substitution and outsourcing.

(i) Labour substitution:
This hypothesis is based on the fact that increased automation leads to reduced need for labour as well as enhanced productivity. When capital investments in IT are cheaper compared to employment of labour, firms may substitute IT for labour. This process can be further divided into IT-enabled machines replacing manual labour in the shop floor and ICTs replacing those employed in data processing and communication. However, empirical evidence to support this hypothesis has not been convincing, as exemplified by the discussion on "IT productivity paradox" (Brynjolfsson 1993). Its effects are also conditioned by labour market rigidities. In labour markets with few barriers to exit, it may be expected that ICTs displace labour. On the other hand, under rigid labour market conditions, deployment of ICTs ought to take place without displacement of labour, probably altering the nature of work. Once again, while firm-level impacts are easier to discern, larger macro-economic impacts are difficult to discern due to the multiple and overlapping influences on employment like output markets, policy variables, etc. Furthermore, studies of the relationship between IT and employment, also indicate that IT may actually increase employment, and may in fact complement employment rather than substitute (Morrison and Berndt 1990). Such findings however, do not shed any light on the changes in skill or job profile, if any, that use of ICTs may require. Similarly, use of ICTs may improve labour productivities, lowering the cost per unit of output. Assuming that the price elasticity of demand for that output is high, demand for that product increases forcing firms to expand capacity, leading to increased firm size. Though empirical evidence for this possibility is not available, it definitely goes to show that industry-specific variables too condition the impact of ICTs.

(ii) Outsourcing:
Another important impact of ICTs, especially in the context of low-income economies with a significant presence of the informal economy, is its ability to reduce transaction and co-ordination costs, and consequent impact on firm size. ICTs may lead to smaller sized firms because they enable firms to outsource more of their activities. ICTs enhance firms' ability to buy rather than make more of the components and services inputs required for production and/or delivery. It implies reconfiguration of inter-firm division of labour with its attendant implications for labour mobility.

The choice depends upon relative costs of production vis a vis that of coordination. While production costs refer to the costs of the physical production process itself, the latter refer to the costs of 'managing the dependencies' between production tasks. It would include, for example, costs of ensuring availability of material and factor inputs at the right time, ensure movement of work-in-progress through the production process, etc. Co-ordination costs can be internal or external. Internal co-ordination costs include the costs of managers and others who decide when, where, and how to produce whereas, external co-ordination costs include (a) the supplier's costs for marketing, sales, and billing and (b) Costs for finding suppliers, negotiating contracts, and payments. In both cases, as can be seen, co-ordination costs include information intensive activities such as gathering information, communicating, and making decisions. Since ICT is particularly useful to such information intensive activities, several works suggest how IT might affect firm size by reducing these co-ordination costs, depending upon which kinds of costs are affected most (Gurbaxani and Whang 1991). Transaction cost theory (Coase 1988; Williamson 1985) that most deals with information processing imperative of firms suggests the following possibilities with regard to diffusion of ICTs and its impact on firm size and structure. [7]

b. Reducing internal co-ordination costs relative to external coordination

If IT reduces the costs of internal co-ordination more than external co-ordination, then we would expect firms to make more things internally. This means that firm size will increase with use of ICTs. To cite, if IT reduces costs for managers to monitor and control their subordinates' work in a large organisation, then this might lead firms to make more things internally where they could be controlled more effectively and at less cost than if they were purchased from an external supplier. One type of internal co-ordination cost simply involves provisioning of information to decision-makers and transmission of information about these decisions to different levels in the organisation. Another important internal co-ordination cost arises when the interests of individual employees are different from that of the firm as is quite often the case. Pointed out by proponents of 'agency' theory, firms incur costs to monitor and have to provide incentives and disincentives to ensure performance (Jensen 2000). Since all these activities are information-intensive, theoretically it seems plausible that ICTs may affect their costs. The last aspect, as can be seen, has obvious implications for autonomy of labour, which will be discussed later.

c. Reducing external co-ordination costs more than internal
If ICT reduces the costs of external co-ordination more than internal co-ordination, then we would expect firms to rely more on outsourcing for their inputs. The average size of firms will therefore decrease. For example, if it is easier and cheaper for a firm to find an external supplier for new parts than to make them internally, then the firm is more likely to buy the parts from external suppliers than to set up internal manufacturing capacity. This phenomenon is especially evident in the case of the automobile industry, which requires a large number of small component inputs for a single unit of output. Typically, 70 to 80 per cent of their component inputs are sourced from external suppliers.

When firms want to buy components from independent firms, they are often threatened by the possibility of "opportunistic" behaviour of firms with whom they negotiate and enter into contracts, forcing them to incur costs to reduce the scope or impact of such behaviour (such as legal and accounting expenses). Such costs would not be necessary if the same transactions were co-ordinated internally. For example, when a supplier invests in special machinery that is useful only for one customer, the supplier is vulnerable if that customer threatens to buy somewhere else. Similarly, when it is difficult for buyers to find out about alternative sources of supply, they are vulnerable to monopolistic pricing from their suppliers.

Use of ICTs make available better quality information to firms and thereby reduce the scope for opportunism (Brynjolfsson 2000; Brynjolfsson, Malone and Gurbaxani 1988). By reducing the costs of searching and accounting activities that are needed for co-ordination with external suppliers, IT can make outsourcing more attractive to firms. A related effect of IT is its role in reducing market co-ordination costs by changing the "specificity" of assets themselves. For instance, Klein, Crawford and Alchian (1978), and Grossman and Hart (1986) have emphasised that when assets are specific to one another, market co-ordination will be inefficient and this may lead to common ownership of large, related sets of assets. However, if IT facilitates techniques like flexible manufacturing, it may decrease the specificity of assets, and thus transform internal production into production organised through smaller units co-ordinated by markets.

d. Reducing co-ordination costs more than production costs:
While in the above two sections, we traced the impact of relative changes in different types of coordination costs on the inter-firm division of labour, other studies point to the changes wrought about by reduction in coordination costs in total (both internal and external) in relation to production costs. It is argued that when both kinds of co-ordination costs decline relative to production costs, it would still favour buying to producing in-house. First, as noted above, the costs of identifying suppliers and negotiating contracts make external co-ordination more expensive than co-ordinating the same activities internally (Williamson 1985). However, when external suppliers cater to a large number of customers, they can reap gains from scale economies of scale and efficiency through specialisation that internal production could not achieve. Thus, in general, buying rather than making leads to higher co-ordination costs but lower production costs.

If IT reduces both internal and external co-ordination costs, it will decrease the disadvantages of sourcing from external suppliers. If more outsourcing occurs because of this or any of the other effects, we should expect a decrease in firm size, in terms of both material assets and numbers employed. As can be seen, unlike the labour substitution proposition based on automation, here, employment does not decline, but gets divided among new independent firms. There is limited evidence to suggest that ICTs do lead to a decline in firm size in certain industries. A study of the metal-working industry found that there was a fragmentation of vertical integrated firms and that this could be partly attributed to increased use of ICTs (Carlsson, 1988).

While the above discussion pertains to impact of ICT use on firm size, another related set of questions concerned the impact of use of computers on distribution of power within an organisation, ie, its ability to increase centralised authority or to decentralise decision-making powers, with its attendant implications for labour autonomy and control over work. Empirical evidence is again divided on this. While some studies found a considerable increase on centralisation of decsion-making power subsequent to introduction of computers, another set of studies pointed to contradictory tendencies. One study (Blau et.al 1976) interestingly observed from a sample of over 100 manufacturing firms, that use of computers 'onsite' led to dencentralisation while their 'offsite' use promoted centralisation.

Admittedly, both these sets of studies were based on the assumption that technology was the prime mover that determined the distribution of power within an organisation. This premise was soon questioned by another set of scholars in the 1970s who argued for a more complex explanation for organisational structure. In fact, the causality was seen to be reversed by some scholars (Laudon 1974) who felt that the way technologies are deployed in an organisation was dependent upon the authority structures present. Technologies, in this case, only acted as a tool to reinforce structures that management deemed appropriate. This understanding implies that management, faced with many options, do not face any constraints in implementing what they perceive to be the best. This perspective, termed as the 'organisational imperative' by George and King (1991) in opposition to the 'technological imperative' that guided research earlier, has been tempered by the same authors by drawing upon a 'reinforcement politics' perspective where organisations are constrained by their history and conflicting goals. Once again, the discussion, rather than argue for a specific kind of impact, highlights the importance of institutional factors in shaping outcomes.

3.ICTs and Nature of Employment

Another strand of literature concerns changes in the spatial organisation of work due to introduction of ICTs (Zuboff, 1984; Sproull and Kiesler, 1991) and implications for nature of employment generated. Since ICTs reduce coordination and communication costs, it is not necessary to bring workers together to a single workplace. As has been pointed out by Marglin(1974), the origins of the factory form of production organisation lay essentially in the need to monitor and control the pace of work as otherwise, it would be difficult to ensure compliance from the workers. Subsequently, it enabled the development of Taylorist techniques that not only reinforced capital's control over labour, but also created a dual labour market, with the separation of intellectual labour from manual labour. Use of ICTs, especially advanced communication technologies, coupled with appropriate incentives can provide an opportunity to employees to undertake homework, or more broadly 'telework', ie, distance working facilitated by ICTs. Since the nature of work is primarily information processing and knowledge creation, employees with access to information processing and communication tools can carry out their work without considerations of location. This possibility opened up by ICTs has even been seen as an environmentally sound option as it reduces the need for urban transport.

On the flip side, it also weakens the traditional bases for organising labour and collective representation of labour. ICTs, by facilitating firms to employ homeworkers on a contractual basis, are seen to promote insecure employment opportunities. In the Indian context as well as in the context of other low-income economies, this potential of ICTs is seen to push employment from the formal sector to small firms in the informal economy where employment is not protected by any legislation. Further, if this feature of ICTs encourage the formation of small firms that are narrowly specialised, it also implies that there is less room for employee mobility within firms, transforming the career paths of employees. Vertical mobility of employees will be ensured primarily through movement from one firm to another rather than through intra-firm mobility. While the above discussion pertains to changes in the nature of employment due to adoption of ICTs, ICTs are also expected to bring about significant changes in the realm of work content, skills demanded and consequent impacts on labour market segmentation.

4. ICTs and Quality of Work Content

The difference between the set of impacts discussed above and this aspect of impact stems from two perspectives of work, one as a source of fulfillment and another, as means to other ends. One, work is an end in itself, an expression of innate human aspiration to creative and meaningful labour. Second, work is means to earn income and secure livelihoods. While the earlier discussion pertains to work as means to ensure steady access to income and decent living conditions, here, we discuss about ICTs potential to create meaningful and fulfilling work for employees. There are generally two contrasting theses about new technologies including ICTs and impact on the quality of work:
a) the 'postindustrial thesis', in which automation is seen as liberating workers from routine tasks and producing a skilled, stable, well-paid and autonomous labour force (Bell 1973);
b) the 'degradation of work thesis', in which innovation is seen as designed to reduce skill requirements and transform work activities into repetitive routines, so that labour becomes cheap and easy to substitute (Braverman 1974; Aranowitz and Difazio 1994).

The former understanding of impact on work is partly related to the earlier discussions on labour substituting ICTs. Degrading, monotonous labour which was seen as essential to societal progress, but inimical to those employed at it can now be left to ICT driven machines, leaving human beings to take care of more creative and knowledge-based work. Proponents contend that as ICTs diffuse in an organisation, they undermine the need for routine clerical work and reduce some subset of blue-collared work as well. What cannot be automated are tasks that require exception processing, spatial or visual skills or those that require non-algorithmic reasoning (Bresnahan, Brynjolfsson and Hewitt 2000, 4). At another level, Beck even argues that we are at present in a stage where human beings can escape the tyranny of work as we now come to understand it (2000). Apart from such impacts in traditional sectors, the growing knowledge and information content of the new sectors too would require a highly skilled workforce. What this argument misses out is the growing complexity in division of labour as a society/economy progresses. Thus, while it may be true that ICTs does liberate a set of workers from drudgery, accompanied as they are by growing complexities of economies, it is quite possible that new tasks are created that may require labour of a very monotonous and unskilled kind that are not readily amenable to automation. In fact, the post-industrial thesis presupposes a movement towards dominance of the service economy in terms of both employment and production (Castells 1999, 203). Again, since substitution of labour by ICTs are driven by relative costs of labour, the extent to which the substitution takes place may differ across economies, with a lot less incentive for labour surplus economies to substitute as compared to that witnessed in advanced capitalist economies.

The second thesis stems from the Marxist perspective on capitalist dynamic as one driven by capital's need to exercise control over labour to ensure adequate extraction of surplus value. When capital engages labourers to work in a firm, the capitalist essentially buys the labourpower of the labourers and not their labour. It is therefore critical to capital to ensure that it extracts adequate labour from the labourpower of employees. This need to exercise greater control over labour is seen to be a primary factor conditioning the organisation of production in a capitalist society. Deskilling or reduction of complex tasks like that of a craft worker into simple tasks is important to this end. When the broken down tasks can be undertaken by unskilled workers, it reduces the bargaining power of skilled labour while simultaneously serving to expand the supply of labour from which capital can draw from. The introduction of Taylorist principles to the shopfloor, for instance, seeks to reduce labour's control over the pace of work, and thereby improves capital's ability to extract the requisite amount of labour.

Braverman's work, taking cue from Marx's analyses of factory system in England in the wake of the Industrial revolution, is premised on the above logic of the capitalist firm. However, critics have pointed to the absence of the possible role that labour struggles can play in modifying strategies in the workplace (Edwards 1979). Workers, by resisting deskilling efforts of capital can force capital to resort to other means of extracting surplus value including use of more productive technologies. As can be seen, deskilling or degradation of work has less to do with technologies per se, but are only visible in the need for capital to control the pace and quality of work. Information and communication technologies, when used towards this purpose may downgrade the quality of work. Another criticism of the deskilling hypothesis concerns the very notion of skill that Braverman uses to explain the process of deskilling. He derives his understanding of skills from craft based skills, which may not necessarily be valid in a different historical period.

At a theoretical level, since ICTs reduce coordination costs between different work processes, it facilitates/encourages firms to fragment tasks so as to enable them to improve labour productivity. At the same time, when routine tasks can be automated, ICTs reduce unskilled work. This has led to the argument that ICTs alter the distribution of employment among occupations and skill classes of workers (Braverman 1974; Katz 2000; ILO 2001). While the familiar pessimistic Luddite view is that technology will destroy jobs and increase unemployment, the other view is that new jobs, many of which are better paid, are being created in place of ones which cease to exist.

Let us however, now examine these contrasting propositions in relation to the empirical evidence generated through follow-up studies. A few confirm the deskilling hypothesis. Braverman, himself, analysing the impact of introduction of numerically controlled machine tools, found that it reduces the craft-based machine operator to that of a machine tender where the skill requirements are much lower. Kraft's (1979) study of impact of IT on computer programming too led to a similar conclusion. Programming, a highly craft-like job, has been subject to fragmentation and routinisation of tasks, leading to deskilling among software programmers. Greenbaum's study of transformation of software programming in the 1970s too noted deskilling tendencies, wherein efforts were undertaken to subdivide programming into less skilled, routine tasks and skilled ones (1976).

Such observations are supported by Aronowitz and DiFazio (1994, p. 21), who noted that the development of computer-aided software now threatens "the most glamorous of the technical professionals associated with computer technology programming. . . ." Although there will remain a need for "superprograrnmers" to create new and innovative software, the majority of computer programmers are likely to be replaced by intelligent software that is already capable of automatically writing most of the low-level, routine programming turned out by today's programmers (Aronowitz and DiFazio, 1994, p. 21, quoted in Gurbaxani et.al). Castells too observes that just as information technologies have eliminated a number of routine jobs, it has also created a need for new unskilled tasks (206).

On the other hand, studies do indicate the elimination of routine tasks like documentation and record-keeping, a tendency that questions the proposition that ICTs in general lead to a deskilled workforce (Bresnahan, Brynjolfsson and Hitt 2000). Even within software programming, it has been argued (Brooks 1976) that programming continues to retain its craft basis despite efforts to introduce various software engineering processes into development of software. Again, on the other hand, authors have contended that software programming has taken the same route as other manufacturing operations with its splitting up into various small functions capable of being undertaken by the less skilled (Greenbaum 1976). Part of our uncertainty about the effect that information technology has had on the nature of work can be traced back to the considerable uncertainty about the conception of skill. Hence, we can only argue that the introduction of information technology does change the nature and type of skill used in the workplace, but without a shared, operational definition of skill, we have no means of judging if the net effect of computerisation is towards deskilling the workforce.

The impact of IT on employment is not therefore uniform. It can reduce work to deskilled and repetitive jobs and it can also create innovative work and new skills. It can fragment and control labour or it can enable decentralised decision-making and more autonomy. If the workplace is a 'contested terrain' as argued by Edwards, then the direction of change in the organization of work depends on the strength of and organisation of labour as well. This proposition also finds empirical support in a few studies (Clement, 1991; Ormos and Blameble 1989 cited in Ng and Yong 1995). Strong trade union demands coupled with a more open government (e.g. in the Scandinavian countries) can provide channels for participation of labour in planning and use of new technologies.

The impact of the introduction of IT cannot thus be analysed apart from its immediate context of social relations and the existing organisation of work. The extent of impact will also vary depending on the type of machines being installed, the period of installation and the existing labour processes, which are being automated. While studies tend to classify labour into too broad categories like clerical or blue-collared or managerial, differences in terms of impacts can be observed even within these categories, calling for a more nuanced treatment of the subject. Further, given other social bases of segmentation like gender and ethnicity, the impact of ICTs too may differentially affect these categories. For instance, while the new technology skills are being polarised by gender, it is also evident that women are entering computer professions in both the developed and developing countries, leading to class polarisation within the female labour force itself.

This means that deskilling and intensification of work are not inevitable consequences of technological change, but neither will technology automatically create better opportunities. Given the multiplicity of institutional variables that mediate between availability of new technologies and their deployment, impacts are complex and conditioned by relations of power. Studies in fact reveal that the nature of change depends on relative power of the workers. For example, clerks fared less well, on average, than professionals. Again, secretaries sometimes experience better work improvements than workers, primarily women, who were involved in back office processing transactions. Occupational power thus, plays an important role in shaping the way ICTs restructure work content (George and King 1991; Attewell, 1987).

Studies in advanced capitalist economies also point to the skill-biased technical change during a substantial portion of the 20th century, which runs counter to the Marxist contention that technology when deployed in a capitalist society serves to fragment tasks and deskill workers. Some of them also observe a polarisation of the labour market, with a growing bottom-end of low skilled workers as well. Also, some address the measurement of extent of skill bias and its role in the increasing income inequalities witnessed across the globe during the last two decades (Castells 1999). As stated earlier, it needs to be noted that the introduction of ICTs has taken place in conjunction with dismantling of social security nets and greater internationalisation of production to take advantage of low labour costs outside the advanced capitalist economies. Though different methodologies have been developed to net out other effects and isolate the impact of new technologies on skill requirements, there is a consensus by and large that new technologies require complementary skills to ensure their optimum utilisation.

Some of the implications of this are that employees will have many jobs in their work career. They have to move from one job to another as job requirements change, for which they need to constantly update their skill profile according to changing market requirements. Thus, they must be 'trainable' in new skills. This capability depends on possessing a particular educational background; have easier and speedier access to knowledge, which can be codified and disseminated - a major benefit to the LICs. Having said that, it also needs to be understood how traditional forms of labour market based segmentation like that based on gender are undermined or reinforced through use of ICTs.

5.Women's Employment and Diffusion of ICTs

Let us consider the various perspectives that exist concerning possibilities that are open to women in a society whose growth relies heavily on processing and sharing of information. One view perceives technologies in general to be produced by men to serve their interests and reinforcing their domination over women (Cockburn 1986). In this, technologies are seen as tools to perpetuate patriarchal control. This perception has been contested, and of late, by a set of theories that seek to envision a positive role for technologies in liberating women (Plant cited in Millar 1998, 59). They contend that women may benefit from such changes, especially the growing servitisation of economies.

Labelled as cyber feminists, to them the advances in information and communication technologies offer women opportunities to appropriate technologies to liberate themselves from domination exercised by men. Technologies are increasingly becoming self-perpetuating systems wherein production/creation of news ones are carried out more by machines than by men. Men are thus eliminated from the realm of production, confining them to the status of users, along with women. Under such a technological regime, especially one that is characterised by non-hierarchical networked systems, women as users may be more comfortable given their attributes like role-playing, etc. Women can therefore manipulate uses to their advantage. The rise of online communities and networks of women's groups and possibilities of role playing due to the ensured anonymity are all seen as evidence of this potential for new technologies to empower women. In contrast to the earlier perspective that pits technologies against women with little space that can be recovered, and as victims of patriarchal manipulation through technological dominance, this perspective ties technologies to means for women's liberation. Nevertheless, as Millar argues, the extent to which the avenues opened up through new technologies have actually empowered women is not too clear. To add, it speaks little about the vast number of women with little access to such technologies.

In terms of work, to those who envision an enskilled workforce, due to automation of routinised and standardised work tasks, sceptics point to the predominance of women in jobs that are increasingly automated by the new technologies or in low-end jobs created in the new sectors (McDowell 1999;Cockburn 1985), while men occupy the more skilled occupations. This, as Belt, Richardson and Webster (2000) points out, has led to the assertion that labour markets are being dualised or polarised in the new economy. It is in this regard that the nature of women's employment becomes important as they may be confined to the low-end segment of the labour market (Lash and Urry 1994).

Another view held by some, especially that emanating from multilateral agencies for development goes along the following lines (ILO 2001). ICTs are here to stay. Not only are ICT sectors the fastest growing, but their generic nature ensures that they are embedded and diffused across all sectors in the economy, accounting for bulk of productivity increases. In a globalising world, low income countries cannot but avoid 'catching up' on the ICT front, if they are to partake of the benefits of a growing global economy. ICTs, however, do not automatically ensure all round growth and development. Just like other technologies, they also have tendencies to exclude certain segments, while privileging others. This reconfiguration of power relations, history shows, has always tended to marginalize women. Institutions and policies ought to ensure that women are not excluded. For instance, as users, women ought to be provided special incentives to use ICTs in their work as well as in political mobilisation. Also, extra efforts have to be taken by the government to ensure that adequate numbers of women are represented in IT based sectors. This may involve provision of new technology related skills to women entering into the labour market. What this perspective assumes is that technology is an exogenous and neutral variable that can be shaped to benefit women through appropriate intervention. Such an approach fails to recognise the possibility that technology is socially constructed in so much as in production as in consumption.

In each society, as agents encounter and negotiate technology, they simultaneously shape outcomes. Institutions and practices in which agents are embedded in and perpetuate will influence the negotiation and shaping. It therefore becomes important to understand technologies as they are produced, used and how meanings are invested (McDowell 1999). Such a need to situate technological change is completely absent in government policies, both in the advanced capitalist economies and low-income countries. Challenged by declining employment in traditional sectors, governments see in the growing servitisation, especially that is IT-enabled, tremendous scope to compensate job losses. In the US, for instance, cities, where traditional manufacturing sectors have declined, strong local government initiatives are afoot to secure investments in IT-based service sectors that may generate employment (Buchanan and Koch-Schulte 2000). This strategy is also true of new sites that have not been part of the earlier phase of industrialisation, but see in ITES an opportunity to enter into the new IT driven growth phase. A number of towns in Canada, for instance, have adopted this strategy, making the Canadian call centre industry one of the biggest and dynamic ones. That similar strategies are being adopted in low-income economies, especially India should therefore not be surprising.

Given the diverse nature of jobs generated by ICTs, nature of women's employment and work too can be varied. The dynamics of diffusion and use of computer technology are also varied, reflecting the differences in institutional arrangements across different sectors and countries. To begin with, while ICTs have diffused to a great extent in advanced capitalist economies, in low-income economies diffusion of ICTs is a recent phenomenon and more importantly, given the lower relative costs of labour, it has not permeated throughout firms. Women's employment in ICT sectors range from low-skilled, low-paid data entry jobs to high-skilled, high-status professional jobs of systems analysts and computer programmers, though most are concentrated towards the low-skilled end of the spectrum (Mitter and Pearson 1992; Pearson and Mitter 1993). Interestingly, the bulk of women's employment in computer-related occupations across countries has been concerned with the entry and manipulation of data via computer keyboards or in low-skilled assembly jobs in the hardware industry. It needs to be remembered that women's employment even in traditional sectors are confined to data entry jobs like typing or jobs that require soft skills like inter-personal skills, communication skills, etc. Thus jobs like secretarial assistance and public relations promotion were and still are undertaken by largely by women. The predominance of women in similar jobs in ICT sectors therefore is indicative of only continuity in the gendering of work in the 'new economy'.

With the advances in telecommunications technology, there is an increasing trend to relocate or subcontract office services to low-wage countries, where women are employed in low-skilled data entry and other jobs at a fraction of the cost of comparable labour in high-income economies (ILO 2001; Mitter and Rowbotham 1995). Even highly-skilled software services are being undertaken by firms in low-income economies like India with a pool of skilled low cost labour (ILO 2001; Heeks 1996). Apart from such rise of new sectors, use of automation in traditional sectors also portends important changes to labour markets. Thus, the extent to which such trends would affect women's employment in these countries is worthy of examination.

The following review is primarily based in the set of papers in Mitter and Rowbotham (1995). To begin with, Acero delineates the ways in which women employees respond to organisational changes like automation, drive towards more efficiency and importantly quality of output to meet the challenges of global competitive pressures. Interestingly, she finds that women employees understand the need for skill upgradation and demand from management the need for innovations in in-house training systems. To a certain extent, her fndings support the deskilling and degradation of work hypothesis of Braverman, and a possible feminisation of work as a result of changes in technologies. Yet she also finds an opposing trend: new production processes demand a number of high-end skills including technical and managerial expertise for core occupations. The inability of women to find adequate access to these jobs are due to pre-entry barriers to entry into the labour market like social and educational institutions that deter women from upgrading their skills, enforcing segmented labour markets. Her observations that women's position in the intra-household division of labour plays an important role in determining on women's status at work stress the need to have a deeper insight into the links between private and public domains in workers' lives. 'New technology, in reducing the skill components of assembly-line jobs, makes these more accessible to women. Increased job opportunities, however, bring new tensions in workers' domestic lives. The evolving situation in the household poses special challenges to women who take time off in order to organise around their workplace demands, or who take initiatives in family planning.' Increasing entry into paid employment has nevertheless contributed to autonomy for women at work and training possibilities to a limited extent.

Gannage's paper relates the formation of identities with the use of ICTs among the female workforce. She stresses the need to go beyond a pure gender based understanding of labour segmentation and its dynamic to one that combines it with class and ethnicity to understand the changing labour processes in a 'post-industrial' society. Thus, even within women employees, segmentation based on educational qualifications which in turn are partly a reflection of their class status are found to exist and which may in fact, be enhanced in a 'knowledge economy'. Webster (1985) once again observes intra-gender differences in the effects of office automation on women's work. It has led to deskilling in some jobs and removal of routine work in others. She argues that power relations within the firm condition the differential impacts. Jobs with better status and higher in the hierarchy experienced reduction in monotony while those lower down experience deskilling. This contention finds an echo in ILO (2001) and Rothboeck, Vijayabaskar and Gayathri (200). The latter work points to the strong class differences within women employees in the Indian software industry.

Gannage analyses the modes by which use of ICTs in tandem with new corporate strategies to improve quality and time to market alter the careers of immigrant women in Canada. She observes that while there has been a displacement of labour to an extent, it has also led to a polarisation of skills and increase in insecure home-based work. Her observations call for radical reformulation of labour union strategies state policies in the wake of new organisational and labour market changes, like encouragement of skill formation and creation of institutions that undermine discrimination based on gender and ethnicity.

Banerjee relates the employment of women in electronics production in Calcutta to the predominance of the informal economy characterised by insecurity of employment and degraded work conditions. In Calcutta, a number of consumer goods are assembled in informal sector units using imported components and large number of women employees. Assembly jobs, as is well known, does not require much skills and hence poor women with little formal qualifications or training are employed at low wage rates. Interestingly, she observes that this process has enabled some of the employees to acquire skills to help them assemble entire units. Acquisition of such skills definitely opens up opportunities for vertical mobility. Nevertheless, perceptions that women are not good enough for such complex tasks, and lack of formal qualifications to back them up, prevents this skill acquisition from being translated into entrepreneurship and consequent access to higher incomes. Once again, we find that traditional sources of labour market discrimination continue to retain their hold in labour markets in ICT based sectors as well.

This finds additional support from Gaio's analyses of women's employment in the Brazilian software industry. Though this sector employs a large number of women (nearly 50 per cent of the total workforce), a major proportion of them are employed in low-end jobs like data entry and data processing, with women occupying a much lower share in software development work. At the same time, the fact that they have entered into the workforce, their low status notwithstanding implies that ICTs do have the potential to reduce discrimination. Thus, unlike other scholars of the Bravermanian kind who are pessimistic about prospects for women in the context of enhanced use of ICTs, Gaio perceives a few positive signs: "The labour process theory, she argues, gives too much attention to the 'hard' side of technical knowledge, which is amenable to deskilling through Taylorism and automation. The approach fails to note the growing importance of the 'soft' side of technical knowledge, such as communication and user-producer interaction, which enables women to achieve economic advancement and greater social power. The declining importance of mainframe computers, she argues, gives a reason also for revising a certain strand of the radical feminist vision of technology, that thinks primarily in terms of 'hard' machines, embodying male dominance and power." (http://www.unu.edu/unupress/unupbooks/uu37we/uu37we03.htm#1. beyond the politics of difference.Introduction )

Pearson, on the other hand, does not envisage better work for women in the new work environment, though she does concede that enhanced work opportunities may lead to more autonomy for women in other spheres. Analysing the work conditions of data-entry workers, she observes that such work poses a number of health hazards like Repetitive Strain Injury (RSI) to which women are more susceptible given their predominance in such jobs. More importantly, she points to the problems faced by employees and unions in making such hazards declared as injurious as they do not result in any external injuries. She calls for greater intervention to ensure that women gain some advantages in the new work environment.

To understand the interaction between gender and new information technologies, we posit that we need to not only understand the relationship within the workplace but also in the realm of cultural reproduction. In a traditional low-income society like India with vast presence of technologically backward sectors, entry or familiarity with ICT based sectors can trigger notions of cultural superiority. Backed by a rhetoric of the 'new economy' driven by ICTs as an extremely powerful and inevitable route that economies ought to assume if they are to remain competitive, those with familiarity of the sector tend to perceive themselves to be better placed and more attuned to the world of the future. Such perceptions are not without a material basis. The software sector has not only been one of the fastest growing sectors, but it has also generated a segment of elite income earners, whose intellectual prowess has also put India in the global IT map. Bangalore, for instance, is considered by many to be one of the leading IT hubs if not in the world, at least in Asia. Income from exports also implied that salary levels could be pegged to international levels. In addition to high incomes earned by them the near global mobility of software professionals has rendered the entire sector a cutting edge sector in India. Working in such a sector also means acquiring a globally recognised cultural capital not easily accessible to those outside them. As a result, acquisition of skills to build up such cultural capital becomes an important component of social mobility. Soft skills like communication with a global clientele (read American or British), can easily be deployed outside the workplace to reap the benefits of such social capital. As a result, incentives to work need not necessarily be confined to the monetary sphere. In our analyses, we therefore also seek to understand the way employees perceive work, possible reasons for such an understanding and how such perceptions influence the labour market dynamic.

VI Labour Markets and ICT Diffusion in the Automobile Sector

1. Method
Given the relative lack of interest in the impact of ICTs on labour in India, hardly any data in this regard exists. Further, existing data on the manufacturing and services sector does not provide disaggregated data on ITES segments. Data on the automobile industry do exist, but given the level of aggregation, it is not useful to understand micro-impacts of the kind the study seeks to examine. Empirical data are therefore collected almost exclusively through primary fieldwork. The choice of firms is however made based on available data on their importance to the industry and their relevance for the current study.

In the case of the automobile industry, data were collected so as to seek answers to the following questions.

1. To what extent has information technology been introduced in traditional manufacturing firms in India? (Planning, manufacturing, administration, accounting)?

2. Has the introduction of information technology had any quantitative impact on the level of employment and, if so, on what job profiles?

3. Has information technology had any qualitative effect (e.g., better working conditions, more satisfactory or creative work, and, if so, on what job profiles?

4. What are the major ways of dealing with redundant workers?

5. Has any training been provided to workers to adjust to the new technology?

6. What new skills are required, if any, when recruiting new workers, as the result of introduction of ICTs?

7. How is technology related to the changes in work content and control?

8. Are new opportunities for women's employment being created?

9. What would these require in terms of skills and training patterns?

Given the heterogenity of ICTs, we confine our enquiry largely to the impact on implementation of one type of IT solution, viz., enterprise resource planning (ERP) solutions for the overall firm operations and on introduction of computer numerically controlled (CNC) machines in the shopfloor.

2. Why ERP?
Among the fastest growing software segments in the Indian domestic market in the last few years are Enterprise Resource Planning (ERP) systems. ERP systems have revolutionized global business practices in a wide range of industries, across different scales of operation, by facilitating information flows across various functions within firms, to reduce time-to-market and to promote decentralised decision-making. This has transformed work organization and enabled firms to rationalise their use of labour. Tracking how ERP is used offers an excellent means of comprehending ICT diffusion in the wider economy and to shed light on changes in work patterns and employment as a result of ICT diffusion.

In India, since ERP implementation began around the mid-1990s the manufacturing sector has accounted for nearly 75 per cent of ERP system purchases, with the automobile and automobile component industry being one of the largest consumers. Under India's liberal policy regime since the mid-1980s, the automobile industry has been among the fastest growing manufacturing industries, accompanied by intensified competition as well as a number of product market and technological changes. To quote, "The model of mass production was first invented by Automobile industry a century ago. But now the industry is facing global competition and the needs of the industry have changed totally. The customers are no longer satisfied with few choices. They demand what they want, when they want and where they want. To cater the needs, make-to-order production is necessary instead of mass production. Here the success depends on speed; speed of accepting market requirements, speed of developing new models, speed of procuring raw materials, speed of production and speed of delivering the products to right place. Collaboration among all the industry players -- suppliers, OEMs, dealers, and customers -- is essential." (http://www.karkhanisgroup.com/indusol/autosol.htm)

ICTs consist of various technologies, and in order to obtain a homogenous technology, we confine our analyses largely to implementation of ERP solutions and use of CNCs in the shop floor. However, all the firms studied have implemented ERP only within the last two to three years. As a result, its impacts are difficult to discern. We therefore, through interviews with systems personnel, senior management and human resources personnel, attempt to delineate the possible organisational and labour market changes that may result in future. However, we also observed that all firms had relatively robust legacy systems over which ERP systems have been introduced. The legacy systems too have altered work content and job types considerably. We also examine these changes to capture the impact of ICTs.

ERP solutions are essentially designed to reduce costs and time of transactions, both intra-firm and inter-firm in the case of supplier and distribution firms. Second, it generates considerable amount of information on the various business processes, apart from increasing their availability to all levels in the organisation bringing transparency to the entire organisation. Such transaction reducing effects is supposed to have a 'power effect' as well, that is, it enables management to take more creative and accurate decisions, it helps them to control processes better, and it provides with them with a powerful tool to enforce organisational changes. As can be seen, derivation of benefits from this system requires tremendous support from the workforce not only to meet the new information requirements, but also to put the available information to effective use. It also requires a considerable degree of business process re-engineering (BPR) to ensure the optimal utilisation of human and material resources.
The study is based on primary fieldwork carried out by case studies of select leading automobile firms in India. User respondents are chosen from different levels in the organisational hierarchy and semi-structured interviews will be used to access information. Data has been collected from 80 employees. Relevant firm-level data are also obtained from annual reports, websites, and from production and human resource departments.

To get a better insight, we studied the impact across different functional areas like purchase, quality control, inventory and stores management, production and material planning, R&D, human resources and finance. The major source of information was through semi-structured interviews with employees long associated with the firm, in different departments and at various levels in the organisational hierarchy. In fact, quite a few of the managerial staff had, through vertical mobility, moved up from lower positions like supervisors, etc. Given the low turnover, most employees are employed in the same firm for over 25 to 30 years, rendering this approach quite valid.

The firms studied manufacture a diverse range of components and vehicles. Two of them are leading medium and heavy vehicle manufacturers, of which one of them also manufactures passenger cars. The third firm is one of the largest manufacturers of two-wheelers in India and the fourth one, a subsidiary of a passenger car manufacturer manufactures transmission gears of a wide range for various client firms. All these firms have implemented ERP solutions either home grown or bought packages in recent years. The names of the firms studied have been withheld as desired by the management of respective firms.

In the course of our pilot fieldwork, we observed that organisations have undergone considerable restructuring in recent years, preceding as well as following implementation of ERP solutions. As a result, we found that discerning changes solely due to ICT introduction was not only difficult but more importantly, fail methodologically as it does not help us to grasp the ways in which technologies are actually introduced and shape labour markets. Technologies are not introduced in a vacuum, but are shaped even as they are introduced by various institutions within a firm, and external conditions like product markets and policy regimes. Also, the fact that implementation of ERP solutions is very recent, its impacts tend to be noticed only in the future. Hence, we shall develop an analytical narrative of the changes taking place in the labour market as a result of organisational restructuring facilitated by use of ICTs.

3. Evidence from the Indian Auto Industry

Impacts may be quantitative or qualitative. By the former, we refer to reduction in certain types of jobs and/or an increase in certain job types. In our study, we do not capture the exact magnitudes given the long periods of IT use in all the firms studied and the various organisational restructuring undertaken by all these firms independent of IT use. In fact, we would argue that institutions play an equally if not, more important role in this regard. Our emphasis would however be more on the latter dimension, ie, on qualitative impacts like changes in skill profile, employment contracts, work conditions and scope for meaningful work. As can be seen, the issue of job quality is very much related to the notion of 'decent work' developed by the ILO in an effort to create globally uniform basic labour standards in an era marked by rapid global movement of productive capital.

a) Quantitative Impact on Jobs
There are two distinct processes, but related by deployment of ICTs. One is redundancy of blue-collared workers through automation. In all the four firms studied, there has been considerable reduction in the number of blue-collared workers over time. However, this is a broad category, and conceals as it does, a range of differences within them, like that between the skilled, semi-skilled and the unskilled, and between supervisors/foremen and operators and machine tenders. However, in terms of reductions, it has been more or less uniform. While there are variations across firms, partly due to differing growth prospects and market conditions, the deployment of computer numerically controlled machine tools (CNCs) and robots, has led to reduction in the number of operators required on the one hand, and a shift in job type from one of an operator to that of a machine tender. However, in older plants, ordinary machine tools continue to be used along with CNCs. The reduction in the number of operators is not however due to use of CNCs alone. Respondents relate it to work reorganisations like cellular/modular manufacturing that allows them to tend to 5 to six machines per person unlike the earlier one machine per person.

Given the security of employment enjoyed by workforce in the Indian organised sector, this reduction has been achieved by a freeze in recruitment of operators (ITI trained) and non-replacement of employees retiring or leaving the firm. Also, attractive voluntary retirement schemes (VRS) have been introduced recently in two of the firms studied. In one of these firms, over 1000 employees of the 13,00 odd workforce has opted for this scheme within the past two years. Interestingly, product markets for both these firms have maintained a rather sluggish growth in the last two years rendering such schemes viable to management. On the other hand, in another case firm, catering to the vibrant two-wheeler market, management has been able to redeploy the redundant workforce. As the vice-president of the firm says, "There has been a shift from data processing to management and some jobs have becomes redundant, but the two-wheeler industry is growing so rapidly that it will be possible to re-deploy all the people."(http://www.tvsmotor.co.in/prdetail.asp?pressid=6)

The decline in the requirements of skilled operators in the shopfloor is best exemplified in the case of one of the firms that has a nearly 50 year old medium and heavy vehicle manufacturing plant and a five year old car manufacturing plant. While the former relies heavily on manual labour, the latter engages a large number of robots for most shopfloor operations like assembly, painting, etc. Highly skilled technicians and engineers monitor the functioning of the robots. The HR manager opines that the labour productivity in the car plant is at least four times that of the other plant. Again, secondary sources indicate that the new plants that have been set up by MNCs in the 1990s employ far fewer blue-collared workforce due to adoption of high levels of automation (www.fordindia.com). The ratio of blue collared workforce to white collared workers in the new firms is 1:2 compared to the 1:2.5 ratio that exists in older firms in India.

Among the white-collared work force, use of ICTs in the automobile industry has led to reduced need for jobs in most areas like documentation, inter-departmental communication, data processing and similar clerical work apart from losses due to automation in the shopfloor. In all the firms, in most departments, there has been a reduction in the number of staff. In terms of levels, there has been a marginal decline in middle management level, considerably more in lower management levels and maximum among clerical staff. It must be reiterated that in this case, the redundancy is primarily an outcome of use of ICTs in the organisation. The managerial and clerical staff has declined by 10 to 15 per cent in the last five years in all the firms studied. Department specific information, in two of the firms studied proved to be difficult, as they had undergone considerable restructuring of departments recently rendering collation of such data difficult.

In the other two firms, a number of changes are cited by respondents. For instance, in one firm, in the Goods Received and Despatched division (called GR&D), the number employed has come down from 12 to 4 between 1997-98 and May 2002. The functions here essentially involve ensuring that the ordered quantities of components and supplies have been sent, documentation of bought out components reaching the factory, and its movement to the stores to be taken out during production. With the introduction of online tracking system, this process has been considerably simplified.

Many such data entry and data communications jobs have witnessed reductions in all departments. As for categories, there is a set of employees called 'Monthly Rated' workers or 'chasers', who belong to the unionised segment, but are paid on a monthly basis unlike the rest who are paid on a per-shift basis. They are low-skilled workers employed in data entry, following up on movement of goods and documents from and to various sections, and also ensure transmission of documents containing relevant information within the firm. Thus, essentially, they are involved in ensuring proper transactions within the firm to co-ordinate production. ERP systems and even the earlier legacy systems have undermined their need considerably.

Similarly, a number of employees were engaged in the purchase department to liaison with suppliers, answer their queries, follow up on orders placed, ensure payments, etc. Now with the on-line networking of suppliers, quite a few of these jobs have been made redundant. One of them who continues to work in the purchase division has this to say: "Earlier, there used to be three of us here and all we did was answer calls from suppliers most of the day. But now, I am the only one here and I may attend just 5 to 10 calls a day." Suppliers now can look up the website to check the status of their bill processing and payments. Only under exceptional circumstances do they have the need to call up the purchase department for queries. In the entire division, there used to be 20 to 25 personnel earlier. At present, there are only six employees. The same is true of the 'bill passing' function in the finance department. In one firm, respondents in this division report a decline from 12 to 6 in the last four years, and they attribute it to the new software systems completely. However, this reduced need has not resulted in lay-off of employees due to strong institutional protection to employees in these firms. Excess staff are redeployed elsewhere to improve the efficiency of other processes. Different firms, depending upon their growth, product market conditions and management, rely on different strategies to offset the changing labour requirements.

On the other hand, there are a few functional areas/departments where there has been increased employment in recent years, indicating a possible complementarity of employment with use of ICTs. Systems department is obviously one. Its strength in one firm has increased from 11 to 20 in the last three years and from 20 to nearly 50 in another. Apart from direct employment, firms also get IT professionals from IT firms on a temporary basis for implementation or consultancy in IT related areas. The other departments that have witnessed increased employment are quality, R&D and sales and marketing divisions. This phenomenon is a direct outcome of the imperatives of global competition and not due to use of ICTs. In sum, however, as can be seen, there has been a net reduction in labour absorption, which is likely to continue in the years to come.

b) Changes in Skill Requirements
Here again, we differentiate the technical from administrative and managerial workforce. On the shop floor, with the use of CNCs, there has been a shift from operative skills to machine tending skills. There has thus been more emphasis on cognitive and problem-solving skills and less on technical skills at this level. It has also undermined the need for their technical skills like welding, turning, machining, etc. Instead, it requires them to watch out for faulty work and fix them. While operators are trained to fix standard errors, more complex ones are handled by the machinery suppliers. Interestingly, there are differences in the extent to which use of CNCs imparts new cognitive skills to users. In one case firm, programming was done by a few of the trained operators themselves. They had working knowledge of computers and then they were taught to program these machines. This, as can be seen, is definitely a case of users requiring a shift from technical to cognitive skills as has pointed out by others. On the other hand, in the other firm, a professional from the supplier firm programmes the machines periodically and hence, there is a clear process of deskilling. Even in the former case, not all the erstwhile machine operators are trained in programming, indicating the tendency of ICTs to polarise skills.

Simultaneously, with the introduction of new management techniques, emphasis has been placed on multi-skilling. Multi-tasking has happened in three of the firms studied though it is due to new organisational changes rather than use of ICTs. Thus, the 'organisational imperative' rather than the 'technological imperative' has led to this skill bias. Workers are encouraged through appropriate incentives, and in two firms are compulsorily made to learn new skills other than their current specialisation. There are variations across different segments of workers. Unskilled workers are asked to take up other unskilled tasks in other departments, which in effect means that there is no skill upgradation. As for the skilled and the semi-skilled, they are encouraged to deepen their current skills as well as learn other tasks. For instance, a welder can be trained to operate a computerised welding machine as well as in other skills like painting or machining. It is in the multi-skilling aspect that greater emphasis is given as it is not possible at present for firms to benefit from skill deepening due to increased automation. Also, multi-skilling ensures functional flexibility among the workforce, critical to cater to flexible product market conditions. Workers also participate in cost saving and quality enhancement measures, once again due to competitive pressures. Also, efforts are underway to delegate more supervisory functions to the senior operators themselves. However, the process of skill acquisition in the shop floor, as we shall see later, is not entirely a step towards greater control over work among the blue collared workers.

Among the white-collared workforce, low-level skills like data entry, and clerical skills like bill passing and document preparation have been made redundant. On the other hand, there has been an increase in need for skilled professionals like IT workers and design staff. Managers are also required to move across departments to develop a comprehensive understanding of the business processes in two of the firms studied. Control functions of managers have been made easier while also requiring them to use greater cognitive skills to interpret and take decisions based on information generated through management information systems. The new skill requirements like that required in the systems department are by and large met through employment of a different set of people in most cases, with higher formal qualifications as compared to those whose skills are made redundant. There are thus indications of skill polarisation in the Indian auto industry.

c) Changes in Work content:
We already noted the shifting emphasis on cognitive skills among the technical workers in the shopfloor. Also, given the reduced time required for machine tending, senior operators are also asked to take up a few supervisory functions as well. Inputting of data into the system requires certain amount of data entry work from the operators at the shop floor, which was not welcome initially. It required some negotiation before it could be ensured.

Among the administrative jobs, the most important change brought about by use of ICTs has been the increased speed and hence the reduced time to carry out many tasks. Before the advent of computers, everything had to be tabulated and calculated manually to arrive at final requirements. Further, they needed to go to each of the departments to get the required information. At the shop floor too, chasers were employed to find out how much of material has been processed, how much has been pending, etc. This data has to be then noted down, and then used to arrive at future requirements. With the advent of computers, need for manual calculation has been eliminated, which reduces time enormously. However, inter-departmental coordination still meant sending people with printouts. Then all of the documents have to be related to one another and then requirements planned. With implementation of ERP systems, all these functions have been considerably simplified. Inter-departmental movement of documents has more or less ceased.

Inventory control has been made easier now, and data entry in this department is done much faster than before. A respondent employed in this job for a long time says "Earlier, we used to work as a group. Now I do this all by myself. The others, either they have retired or they have been moved into other departments. For me, there is not much difference in the kind of work that I do. Earlier, I used to do write or note down on paper manually, but now I enter it into the machine and the machine generates whatever documents are required. But now since work gets done faster, I can handle the entire stores. But I can't say that it has benefitted me personally though it is a big advantage for the firm". It has definitely benefited firms, as there has been steady decline in inventory held in all the firms studied. For instance, in one firm, work in progress has come down by almost 50 per cent, from Rs. 180 crores to Rs. 100 crores in three years.

Planning functions too have been made easier. This has enabled firms' managers to engage in more complex planning than what was done earlier. To cite, in all firms except one, production planning has moved from a monthly plan to weekly plan and of late to a daily plan. In other words, the organisation is able to react to demand changes much quickly as compared to the earlier period. As the manager of production planning reported, "To draw up a production plan for one vehicle, it used to take me between 20 to 30 minutes. Now I can do it in 2 seconds"! The main function of the department is one of planning and control. Now because of implementation of ERP, control functions have been taken out of their domain as it enables them to coordinate between various departments without much effort. Similarly, in another firm, a manager in the material planning division said that while earlier, it will take an entire night to get the requirements and plan, later on in the legacy system, it used to take four to six hours. "Now it takes only two to three hours."

The Bill of Materials (BOM) forms the base document for material planning, costing and generation of purchase orders. Preparation of BOM is a complex and very critical task, and given the lack of accurate department specific information, it was very difficult to come up with an accurate figure that reflects actual costs across departments. ERP systems, when used effectively, can sort out this major plan process. In all the firms studied, respondents among senior management opine that the BOM is more accurate and easier to get now, enabling them to work with accurate information for more micro-level planning.

d) Changes in Mobility
Among the blue-collared workers, a traditional career path has been to move into supervisory levels based on time-based mobility. Of late, the number of these positions has come down, as ERP systems reduce the labour requirements for monitoring. As stated earlier, senior operators are trained to take on a supervisory role in addition to their existing operative responsibilities. Definitely, this process has led to development of multiple skills, while at the same time, curtailing career paths, as they were earlier. Thus, what we witness here is a transformation of career paths. Increasingly mobility is tied to acquisition of new skills as opposed to the time-based paths in vogue earlier.

Among the white-collared workforce, time based mobility continues to exist in addition to inter-departmental movement of managerial staff. None of the respondents in this category felt that there have been changes in this regard due to use of ICTs, though all human resource heads agree upon the slight reduction in positions as well as increase in this tendency in the years to come. This is partly due to the rapid turnover among graduate engineers, who are employed at the lowest levels in the managerial category. This turnover is a result of the boom in the software sector and the attendant high salaries. Hence, employees continuing to work in this firm are able to move along traditional career paths. One change has been the movement of some staff to the systems department due to acquisition of IT-related skills as well as to provide domain knowledge to aid systems development. The hollowing-out due to reduced need for middle management has not happened for reasons cited earlier. However, organisations will seek to reduce manpower employed as ERP systems definitely enable removal of many routine functions of management.

Employment contracts have not changed in any of the firms studied. The only change in this regard is the reduction in absorption of trainees (ITI) into permanent employees due to the declining need for blue-collared workforce. There has also been a shift to use of temporary workers for carrying out unskilled maintenance jobs, which of course cannot be attributed to ICTs.

e) Impact on Work Autonomy
ICTs through provision of transparency and easy access to information can enable employees to participate in decision-making and therefore reduce hierarchical authority. On the other hand, it provides management with a powerful tool to exercise greater control over employees' work. We find little evidence of the former possibility among the case firms. Though new management techniques encourage workers' participation in decision-making, this has been confined to areas like cost reductions on the shopfloor or in quality control through formation of quality circles. Empowering them by enabling them to take decisions based on increased information availability has not happened, though once again, HR heads claim to introduce such changes in the future.

ERP systems provide a powerful tool to control the pace of work even in the shopfloor aas well as concentrate power and authority among the top management. In ERP systems, the work process control in the shop floor is designed in such a way that in case of bottlenecks in the flow of production process, it is possible to identify a particular point or person where it has come to a halt. As one production manager said, "Earlier the shop floor used to be a black box. It will take us a day to find out why the scheduled output has not come out of the assembly line. As a result, we hardly ever bothered to find out unless when the delays were excessively long. But now, it is possible to even set a trigger to go off if a particular task is not carried out within a standard time frame. It definitely offers the scope to exercise control on the shopfloor, but we haven't tried it as it may not be welcome among the workers…. Ideally, it should be possible for us to fix an average time for a specific task and introduce disincentives to prevent workers from overshooting the time limit. But we are still in an era when trade unions can stop work if they want to". It goes to show that possibilities that exist technically can be subverted by strong labour organisation, a phenomenon suggested by industrial sociologists who depict the workplace as a site of contestation between labour and capital.

Another important advantage suggested was its usefulness in effective decision-making. Earlier, the manager had to rely on statements made by lower level management staff to arrive at solutions to problems. At present, he feels that he is able to get the information required to troubleshoot from the information system itself. Moreover, his reduced dependence on subordinates for such information means that he has greater control over allocation of tasks during his work-time. More importantly, ERP solutions have introduced transparency in the organisation with more accurate information available to employees at all levels. The extent to which this transparency has improved the effectiveness of processes is yet to be realised. It also goes to show that the possibility of using the ease of information availability to decentralise decision-making has not been attempted in any of the firms. Many manager respondents do not even have such plans as they are of the opinion that subordinates are not capable of taking up such responsibilities.

f) Impact on Firm Size
In India, even before new market conditions can encourage greater outsourcing, the auto industry has been characterised by high levels of outsourcing due to government policy of reservation of production of some of the components for the small-scale sector (SSI) (Okado 2000; Humphrey 1998). While this has reduced the ability of firms to benefit from vertical integration, firms have also been forced to integrate uneconomical segments of the production process due to lack of competence among the supplier firms in India. Nevertheless, the levels of sub-contracting in all the firms studied were as high as 60 to 70 per cent. Use of ICTs has really not led to changes in these levels. While this is partly attributed to lack of adequate diffusion of IT use among the supplier firms especially those in tier 2 and below, the primary factor has been the growing requirements of quality, wrought about by global competition and the need to comply with global standards. Since firms are unsure of the reliability of quality levels among most of its suppliers, they prefer to retain such operations in-house. Even given such a possibility, firms have to reckon with labour redundancy within their firms. Thus, as can be seen, a purely transaction cost based explanation in inadequate to understand the impact of ICTs on firm size and structure.

It must however be stated that management in all the firms studied are keen to move to outsourcing some of the components if quality suppliers are available. While the growing demands on quality has led to working with some of the first tier suppliers to ensure required standards, it has also forced some of the larger, established tier 1 suppliers to get global quality certifications.

g) Changes in Organisational Form
Though three of the firms studied have undertaken considerable business process re-engineering prior to implementation of ERP systems, no dramatic change in organisational structure has been reported so far. Changes have largely been by way of combining functions that were done by separate staff earlier, and less reliance on subordinates for access to information for decision-making. Given the lack of codification of business processes and procedures, in all the firms studied, the possibility of disintermediation, ie, removal or decline in size of middle management in the near future is remote. Employees' resistance to such changes is partly cited as a factor, as any kind of resentment may lead to reduced effectiveness of the firm to take advantage of existing systems. Apart from reduction in numbers employed in certain levels like supervisors and clerical staff, no change is reported by any of the firms. On the shopfloor, even redeployment of workers from one shop floor like the one for vehicles to another for engines was not too welcome in the initial phases. However, management feels that it might be required in future if full benefits are to be reaped. It appears that the ability of ICTs to create flatter organisations has been nullified due to power exercised by the white-collared workforce, including those occupying middle management levels. Respondents in the latter category, in general, are of the strong opinion that given the highly uncertain business environment in India and lack of codification of processes, they will continue to be needed by firms for day to day management.

h) ICTs and Labour Institutions
While labour unions that are relatively strong exist in all the firms, its relationship with management has transformed from a confrontationist one to that of a collaborative one in the last 4-5 years. Increasingly, unions realise that the changed market environment makes tremendous demands, failure to respond to which will negatively impact labour as well. Union officials perceive the pervasive use of ICTs to be an inevitability that would lead to job losses. However, since labour in the organised sector is well protected from lay-offs due to any possible redundancies, unions have invested their energies in getting better terms for employees opting for voluntary retirement schemes that are offered by all the firms studied. Also, performance based incentive schemes that are productivity linked have been allowed by them to enable firms to cope with product market changes.

The evidence undermines the general belief that trade unions are a hindrance to effective use of new technologies. In fact, in many instances, management has used TUs to enlist the cooperation of the workforce in their restructuring attempts. This seems to support the findings of other studies that find a positive relationship between trade union presence and a firm's ability to adopt new technologies effectively. Interestingly, in one firm, installation of computers on the shop floor had some positive externalities according to a senior manager. In September 2001, when there was some unrest among the workers, there was no work for a few days. Usually under such circumstances, workers would damage some machines, and when work resumed maintenance staff would have considerable work to do. However, this time since they were keen to play games on the computer, the machines were hardly damaged! Also, questions about resistance to installation of computers, in all the firms, were met with similar answers that invoke acquaintance with computers as a symbol of elite consumption. To cite one response, "They are happy to have a computer in front of them. Their children learn computers at school and so they are proud to acknowledge that they too know how to use them". ICTs, with their uses of consumption, appear to have reduced resistance to its any perceived negative effects in the realm of production. Management too appears to use that symbolic value of computers to elicit consent to its deployment in the workplace. At least in two firms, respondents do report that they overlook when employees use computers to play games, etc as they felt that it offered them scope to use it for organisational purposes as well.

i. Implications
Firms, by and large, are yet to utilise ICTs optimally in the Indian automobile industry and to that extent, the impacts are yet to be realised. The relatively recent adoption of ICTs is one factor. More importantly, it is only of late that the imperatives of global competition with its reduced time-to-market, flexibility and quality requirements are forcing firms to use ICTs effectively. Certain unambiguous tendencies can however, be observed that have important implications for labour market intervention in traditional manufacturing sectors in India.

An important component of public policy in India with regard to labour market has been the high employment security guaranteed to the formal sector employees. It has been suggested of late that such protection and presence of strong trade unions prevents firms from adopting new technologies and efficient utilisation of human resources. Our observations contradict such positions and in fact indicate the facilitative role played by trade unions in implementation of ICT based technologies. Also, unlike other countries, imperatives of globalisation and new technologies have not led to drastic reduction in employment. While, there is a declining trend as far as employment absorption is concerned, it has not led to lay-off of personnel employed. Instead, it has forced firms to re-deploy a segment of the labour force in redundant jobs involving transaction-processing in jobs where complexities have increased like quality and cost control, not to speak of design and domain support to information systems implementation.

This process has led to skill up gradation among some sections of that redeployed workforce. It can even be tentatively argued that employment protection has aided the firms to move towards quality enhancement rather than cost reduction through retrenchment. The extent to which this re-deployment has taken place varies according to market conditions. It is more observed in firms operating under buoyant market conditions. The skill levels of employees and more importantly on the ability to acquire marketable skills play an important role. Employees with IT-related and cognitive skills are more likely to be re-deployed.

As a result, there is a tendency towards skill polarisation, as only those with an ability to acquire such skills have better growth prospects within a firm. Increasingly, firms will tend to recruit personnel with better managerial and research training than labour with just technical skills. At the macro-level, it therefore appears that there is a steady decline in skills provided by traditional vocational training institutions like Industrial Training Institutes (ITI). Further, with the reduced numbers required for monitoring work, mobility prospects are likely to be reduced. However, in most of the firms studied, appropriate incentive schemes are in place to enable employees to acquire the requisite new IT and managerial skills.

The marginal presence of women employees in the auto industry implies that ICT diffusion in traditional manufacturing may not affect them significantly. Interestingly, in one of the case firms, a senior manager proudly remarked "We are a 100 per cent male company". Nonetheless, with the expansion in systems department, a small but growing number of women professionals are employed in the case firms. The growth in importance of sales and marketing functions has also contributed to this process. Differences in mobility prospects within these departments are not clear, though in none of the firms studied, women professionals are employed in top managerial positions. Also, we find that in some of the new firms, firm-level governance has led them to employ more women workers than the industry norm. Barriers to women's employment appears to be more due to notions of what constitutes women's work. There are nevertheless intra-gender differences in accessing IT-enabled jobs due to differences in skill levels and formal education.

Interestingly, ICTs have not led to greater outsourcing and henc

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