A
recent World Bank (WB) report says that automation and digitization across the
world will lead to significant loss of jobs with the bulk of job losses coming
in the developing countries in Asia, Central America, East Europe and Africa. The
World Economic Forum (WEF) predicts that developments in artificial intelligence
(AI), robotics, nanotechnology, etc. will replace the need for human workforce by
machines with the effects to be seen as early by 2020.
The development of artificial
intelligence has ensured that low end jobs which can be standardization can be
replaced by machines and robots. Jobs like bank tellers, clerks, call centre
employees, blue collared jobs, etc. have seen humans being replaced by
machines. Infact a high end hotel in Japan has got robots to work as ushers and
waiters with a good increase in productivity. Developing nations, which are agriculture based and have
low end manufacturing, will face the brunt unless corrective steps not taken.
Major countries affected are the
developing nations…
Amongst
the top 15 countries identified with the biggest threats, China ranks at no. 4 and
India at no.11. The country at the top is the poor, famine affected Ethiopia
followed by Nepal and Cambodia. Infact even the USA too faces a big threat too
with about 62% of the present jobs in USA expected to be affected by 2020. The
threat is so big that President Obama had to, in one of his speeches to the US
Congress, identifying this loss as one of the biggest threats to the US jobs
outlook.
What should nations do?
Does
that mean that all technological advancements as stated above is detrimental
for human beings? The answer is no! The WEF predicts that this move towards
automation will create newer jobs to the extent of about 40-50% of the lost
numbers. However the new jobs will require different and specialized skill sets
in fields like computing, mathematics, architecture, etc. The key factor is
that the new work force will have to re-skilled and re-trained and the new
workplace will be distinguished by innovation and high degree of value addition
which will require an open and collaborative workforce.
Professor David Deming of Harvard
University argues that in the new workplace social skill sets like sharing,
negotiation, empathy and co-operation will be highly required. As shown in
figure no. 1 Prof. Deming has plotted the shift in the various jobs from the
80`s till early 2010`s which shows that highly skilled jobs like management
consultants, financial managers, computer scientists, etc. have gained while
low end jobs like mechanics, truck drivers, etc. have lost the most which is an
indication for the futuristic work place as well. Google is testing driverless
cars and the world has seen how the advent of shale gas has structurally
changed the oil markets globally affecting a huge number of jobs in the Middle
East.
Fig no. 1: Jobs change trends
Experiments with Basic Income...
Many
countries, to protect their unemployable population, are looking at
implementing a Basic Income which is a type of social security with no strings
attached. However this concept is still at a nascent stage with many pundits questioning
it as a return to socialism which destroyed the Soviet bloc economies. Switzerland
has had a national referendum on its implementation which was rejected by the
people while Finland proposes to start the basic income on an experimental
basis.
India and China will be major losers…
Amongst
the top 15 nations, only India and China are the major growing economies globally
and importantly have a high population, with the other countries in the list
not even crossing the 100mn population mark. The employment ratio in China and India stand
at 58.4% and 38.8% respectively as per International Labour Organization (ILO)
estimates and a quick calculation shows that about 310mn and 110mn jobs will be
lost in China and India if the WB estimates are true. Thus the implications
will be high for India and China. Basic income is not a choice for India and China
given its huge population which will necessitate huge cash outflows with nil
output.
China has built up its economy on
export oriented manufacturing while Indian economy is driven by services and
hence is exposed lesser to job losses. However Chinese economy and reserves are
far more than India`s and hence can withstand the shocks better. Indian
demographic profile is more oriented towards the younger side as compared to
China and many other top nations in the world which requires more jobs to be
created and hence automation job losses is a major threat to India.
Implications for India are high…
The
major structural issues for India are:
1) The
Indian education system emphasizes on individual brilliance with the secondary
and tertiary education system not oriented towards focussing on innovation and
creative thinking.
2) India
cannot afford to look at basic income as a social security against unemployment.
3) Mechanization
can lead to job losses in the rural areas which depends on agriculture.
4) Job
losses in the younger people can also lead to social tensions with one of the
threats being the youth taking up nefarious activities.
India, as one of the fastest growing
economies and with aspirations to become a global superpower, cannot afford to
be left behind by the wave of automation and digitization. Companies,
government organizations, people, etc. need to adopt this wave to compete
globally. However at the same time India is faced with the stark reality of a
huge, young workforce force for whom jobs need to be ensured. The World Bank
report focusses on a wide range of initiatives ranging from re skilling of
workforce, child nutrition, etc.
What are the basic to do`s for India?
a) Basic
overhaul of the education system - The present education system which is
focussed on rote learning and marks based system makes the workforce incapable
for productive employment. The present Indian government has given a big thrust
to skills development focussing on building employment oriented skill sets amongst
the workforce. Vocational education also needs to be given a thrust. Education
curriculum has to orient towards application oriented studies with school
education giving more thrust to practicals, experiments, etc. rather than
theoretical studies. For example, many alternate education systems like
Montessori, Krishnamurthy foundation trusts, etc. have defined education
patterns with lots of focus on practical and social skills development.
b) Human
Development - India still ranks very low on most of the Human Development
Indices as compared to many of its global peers. As the WB report says, malnourishment
amongst children needs to be addressed, as a medically unfit workforce is a big
threat to a country.
c) Role
of private sector - Private industry too can play its part in training and re
skilling the workforce by investing in training and R&D.
India is still a developing country
with a huge young workforce unlike its developed peers. India still requires a
huge amount of investment in basic infrastructure, healthcare, etc. which
theoretically can be done by machines but can be done by humans too. There is a
significant social cost attached too due to automation of jobs and hence the
key lies in productivity and cost of the labour and hence a well trained and
skilled workforce can match upto many jobs which can be mechanized. For example
road laying can be theoretically done by robots but a skilled workforce which
is available in good numbers can do the trick.
Neuroscientist Simon Harris, in his
Ted talk on Artificial Intelligence says that a final question mankind has to
answer is how much of artificial intelligence and automation that it needs to
promote. He says that with rapid strides in AI, computers and machines will take
over more of the tasks and hence the above question to mankind. Do firms and
governments understand the social costs of AI and automation?
AI will be a major disruption in the days
to come but social aspects need to be addressed too to benefit the mankind!!
