Yesterday I listened Andrew Mcafee on a TED tech about jobs in future. Today morning I read another article about Job emergency by columnist Rahul Jacob in Business standard. These two things have created a stir in my mind, about the impending chaos and inequality that might get created in a society.
India, is undoubtedly is now at centre of world, not only because of its recent elections but also for its huge young population and growing middle class. There is certainly a possibility of reaping demographic dividend but now another possibility has started opening up which might lead us to demographic disaster. There are two distinct trends which are increasing the chances of occurring of later possibility. First, technology & machines are changing the landscape of how we are creating products and providing services. They are replacing humans. Second, there is integration of global economy like never before and it is increasing every day.
Look at the new manufacturing revolution that is taking place in America with robots at helm of production. To see what I mean just see any episode of "how do they do it" on Discovery channel. Mass scale production / Assembly lines are not new in this century. They are there from almost 10 decades. But now equipped with advanced sensory skills like seeing, listening, temperature sensing, touch, etc. the robots / machines have taken over many jobs which earlier required humans. The proportion of wages to total Turnover/profits is at all time low indicating that in the process of creation less and less of human component is required.
Secondly, the world is now more integrated in terms of creation and distribution of resources. The flow of goods, services and importantly capital (money), is much more easy across countries. This helps in mass production / services deliveries at locations which are most cost effective. E.g Garments for developed countries are manufactured in low wage cost countries like Bangladesh, Vietnam etc. Philippines and India are considered are hub for global business process outsourcing. These countries deliver the product and services at a lower wage cost than in developed countries and it takes care of those functions. In the process they also create massive employment in country in that particular sector.
Now just imagine what if machines can start cutting, stitching, folding garments instead of humans. This is not a distant possibility. OR what if some voice processes are automated and it can intelligently reply to the queries of customer. You look at SIRI in iphone. It is exactly doing the same thing. Now just imagine what impact it will have on millions of workers in Bangladesh / India / Phillippines whose job will be lost to machines ? Despite the loss of jobs the quality and volume of product will go up substantially, because machines brings in untiring efficiency at lower costs when they are used for mass production.
So on one hand we are looking towards a time, wherein we can see the massive shift of human jobs taken up by machines, with increase in quantity and quality of product and services. In other words we will move towards greater economic abundance. Return on capital investment will be greater. On the other hand we will see jobs and employment lost, at the bottom of pyramid. In other words it will create inequality by not allowing people to be employed. This will inevitable create tensions between the haves and have nots. India and countries like India which are high on labour and low on capital, might find itself at the receiving end of this phenomenon adversely.
The jobs of future will require fundamentally different skills than which are taught today. The focus has to be on skilling and learning the things which are cannot be substituted by technology. For a country like India which is not so technologically advanced, it can create havoc.We will lose our Indian jobs created for local consumption to machines working in USA or china. This will create transfer of economic value from India to other country and creating a greater divide between developed and developing nations. It will be further aggravated by restricted movement of manpower in comparison to goods and services. (you cannot get visa to go to USA easily but you can buy/sell products with USA with relative ease)
We cannot and should not halt technological advancements but at the same time the policies and ideologies should be such that there is not a disproportionate distribution of economic abundance. This requires massive shift in thinking and philosophies that are followed worldwide. We might need to rethink on globalization policies or we might have to revisit some of the principles of capitalism. Because without intervention or change in the current policies, we are not far from the times when we will have tensions in the society created by advanced technology and economic abundance which in earlier days were considered to be blessings.
In light of above trends and current status, I think it is imperative for India not only to create jobs but also to upskill / Reskill its manpower so that in coming days it does not become obsolete and burden on nation. For a nation which wants to reap demographic dividend of its young and emerging middle class, it is probably a biggest challenge to harness it potential to create economic value and distribute it satisfactorily. We as a nation need to be aware of this trend and have to be at forefront of this change so that we don't lose this demographic opportunity. Because if it is lost once, it will be disaster and that too of massive proportion.
India, is undoubtedly is now at centre of world, not only because of its recent elections but also for its huge young population and growing middle class. There is certainly a possibility of reaping demographic dividend but now another possibility has started opening up which might lead us to demographic disaster. There are two distinct trends which are increasing the chances of occurring of later possibility. First, technology & machines are changing the landscape of how we are creating products and providing services. They are replacing humans. Second, there is integration of global economy like never before and it is increasing every day.
Look at the new manufacturing revolution that is taking place in America with robots at helm of production. To see what I mean just see any episode of "how do they do it" on Discovery channel. Mass scale production / Assembly lines are not new in this century. They are there from almost 10 decades. But now equipped with advanced sensory skills like seeing, listening, temperature sensing, touch, etc. the robots / machines have taken over many jobs which earlier required humans. The proportion of wages to total Turnover/profits is at all time low indicating that in the process of creation less and less of human component is required.
Secondly, the world is now more integrated in terms of creation and distribution of resources. The flow of goods, services and importantly capital (money), is much more easy across countries. This helps in mass production / services deliveries at locations which are most cost effective. E.g Garments for developed countries are manufactured in low wage cost countries like Bangladesh, Vietnam etc. Philippines and India are considered are hub for global business process outsourcing. These countries deliver the product and services at a lower wage cost than in developed countries and it takes care of those functions. In the process they also create massive employment in country in that particular sector.
Now just imagine what if machines can start cutting, stitching, folding garments instead of humans. This is not a distant possibility. OR what if some voice processes are automated and it can intelligently reply to the queries of customer. You look at SIRI in iphone. It is exactly doing the same thing. Now just imagine what impact it will have on millions of workers in Bangladesh / India / Phillippines whose job will be lost to machines ? Despite the loss of jobs the quality and volume of product will go up substantially, because machines brings in untiring efficiency at lower costs when they are used for mass production.
So on one hand we are looking towards a time, wherein we can see the massive shift of human jobs taken up by machines, with increase in quantity and quality of product and services. In other words we will move towards greater economic abundance. Return on capital investment will be greater. On the other hand we will see jobs and employment lost, at the bottom of pyramid. In other words it will create inequality by not allowing people to be employed. This will inevitable create tensions between the haves and have nots. India and countries like India which are high on labour and low on capital, might find itself at the receiving end of this phenomenon adversely.
The jobs of future will require fundamentally different skills than which are taught today. The focus has to be on skilling and learning the things which are cannot be substituted by technology. For a country like India which is not so technologically advanced, it can create havoc.We will lose our Indian jobs created for local consumption to machines working in USA or china. This will create transfer of economic value from India to other country and creating a greater divide between developed and developing nations. It will be further aggravated by restricted movement of manpower in comparison to goods and services. (you cannot get visa to go to USA easily but you can buy/sell products with USA with relative ease)
We cannot and should not halt technological advancements but at the same time the policies and ideologies should be such that there is not a disproportionate distribution of economic abundance. This requires massive shift in thinking and philosophies that are followed worldwide. We might need to rethink on globalization policies or we might have to revisit some of the principles of capitalism. Because without intervention or change in the current policies, we are not far from the times when we will have tensions in the society created by advanced technology and economic abundance which in earlier days were considered to be blessings.
In light of above trends and current status, I think it is imperative for India not only to create jobs but also to upskill / Reskill its manpower so that in coming days it does not become obsolete and burden on nation. For a nation which wants to reap demographic dividend of its young and emerging middle class, it is probably a biggest challenge to harness it potential to create economic value and distribute it satisfactorily. We as a nation need to be aware of this trend and have to be at forefront of this change so that we don't lose this demographic opportunity. Because if it is lost once, it will be disaster and that too of massive proportion.