Effect of Automation on Jobs

During a period when India is concerned with the lack of satisfactory work, it is only natural that expectations would be raised on technologies that appear to accomplish a task of humans. This is analogous to our previous suspicions of computers taking over workers upon widespread adoption.

Today in every sphere we regard computers and laptops as indispensable goods. In fact, they performed miracles — from helping to control missiles to tracing water under dry soil.

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Because of machines, the latest collection of buzz terms that have entered our lexicon include industrial automation, artificial intelligence (AI), robotisation, virtual help and block chain technology. The Google Assistant can now actually remember your schedules reasonably, search nearest coffee shops and plan for your health check-up with a single command. The Aristotle, Mattel’s configurable computer, can read the children’s bedtime books, and teach the babies foreign vocabulary. A security robot, the Steve, can walk around a spot and detect possible fires. The nanny-robots will track a chicken’s wellbeing. The list continues to widen by the day. By 2025, robotics is forecasted to be a sector of $67 billion. The assertions about the impact of the aforementioned technologies are rather much further-fetched, coming back to the question of jobs.

Let’s look at the employment share of different sectors in India, for starters. According to the report of the Reserve Bank of India, of a total of 48 crore jobs in 2015-16, 42 per cent were in agriculture, 14 per cent were in construction, 12 per cent were in retail, bars and restaurants, another 12 per cent were in manufacturing, 11 per cent were in government, social and personal services and the rest were in other sectors. In agriculture, 27 per cent were farmers, and 15 per cent were farm labourers.

But much of the new jobs that were developed in the past were confined to very few industries. Roughly 1.5 crore new employees joined the workforce around the country between 2010-11 and 2015-16, totalling approximately 70 lakh new jobs per year. Business services absorbed most of these entrants (23 per cent) , followed by engineering (17 per cent), education (12 per cent), commerce (11 per cent) and transportation and storage (11 per cent). It is interesting to notice that about 2, 7 crore employees left agriculture, including growers, throughout these five years. About equivalent in number, about 2.5 crore new jobs have been reported in the construction industry, reflecting the fact that many of the farm workers have now become construction workers.

Instead, moving towards these innovations will open up opportunities for new employment, especially in information and communication technology and data sciences. To unlock talent, we need institutional capacity building to prepare the youth workers for those sectors. There is a huge demand for the building of skills, not only in these emerging technologies but also in existing industries. Only 10 per cent have earned some sort of training today, also in the manufacturing sector. It’s only five per cent in agriculture, construction and commerce, and it’s six per cent in finance. Overall, in India, no more than six per cent of the workers are given training. While there are definite margins for skilled staff, the ongoing effort to deliver skills development could generate substantial employment itself.

Finally, when there is sufficient institutional capacity to train the workforce for future jobs and give skills to the existing force, the threat to job loss could be a lesser threat. Yet job formation for the underemployed could also be a difficult thing to contend with. Bumpy roads to go.