By
B. Sivaraman
The
final version of the World Development Report (WDR) 2019 of the World Bank
released at the end of November 2018 landed like a bombshell. It was a powerful
refutation of World Bank’s own 2016 WDR, which declared that the proportion of
jobs threatened by automation was 69 percent in India and 77 percent in China.
With such startling figures, the 2016 WDR figures stunned not only India but
the entire world.
True,
automation based on interrelated processes of robotics, artificial intelligence
(AI), internet of things (IoT — with some secondary processes like 3D printing
in manufacturing and decentralised blockchain management in services thrown in
— have led to claims that we were on the cusp of a Fourth Industrial Revolution
that would dwarf the previous ones in terms of social and economic disruption.
Still, the World Bank figures on potential labour displacement were
mindboggling.
The
World Bank’s prediction triggered publication of a spate of similar reports.
Between December 2017 and May 2018, McKinsey Global Institute (MGI) came out
with more than half a dozen reports on the impact of automation and AI-based
analytics and MGI’s prediction was that about 800 million global workers would
lose their jobs due to automation by 2030. However, World Economic Forum (WEF)
came up with a more modest figure that automation would kill 7.1 million jobs.
The International Federation of Robotics (IFR) predicted job losses worldwide
due to the introduction of robots alone at 3.5 million. Such dire predictions
were repeated by consultancies like PwC, Forrester, Gartner and Metra Martech.
Some
of the countrywide or sectoral predictions were no less ominous. A paper by the
Institute of Public Policy Research, UK put the job losses in UK alone at 13.1
million. A 2013 Oxford study said 47 percent of US jobs were at high risk of
automation in the next few decades. A Forrester study, however, said that
automation would replace 7 percent of the US jobs numbering 89 million by 2025
and an OECD study said that 9 percent of jobs in the organization’s 21 member
countries are automatable.
The
widely diverging findings in these studies make it clear that there is no
common acceptable scientific criterion to assess the impact of automation. So
it is highly likely that they are just hyped-up projections.
Strangely
enough, World Bank’s 2019 WDR doesn’t make a single reference to the WDR 2016
but asserts that “threat to jobs from technology is exaggerated”! Even more
ironically, it concludes that as robots are also contributing to enhance
workers’ productivity and new technology is creating jobs in some sectors,
“economic predictions of technology-induced job losses are basically useless”!
But
even if we leave aside the exaggerated scary predictions, the problem is real
and the job losses would be quite high to cause massive social upheavals. So
what needs to be done? The WDR 2019 talks of managed transition. It proposes
investments in human capital to cope with job losses. The report points to job
polarisation — the expansion of high and low-skill jobs coupled with the
decline of middle-skill jobs. Automation is also reshaping work and the skills
required. This calls for a skill shift and re-skilling at government’s
initiative. Comparing the disparity in payoffs between low-pay low-skill jobs
and high-skilled jobs with higher wages and between informal and formal
sectors, the report proposes measures to enable workers to move over to quality
jobs. It also recommends universal social security through insurance coverage
delinked from specific payroll in view of the massive expansion of work
arrangements outside standard employment contracts like gig economy. It even
proposes more focused tax credits to the salaried instead of generalised tax
waivers or hiking the exemption limits. The report was even toying with the
idea of Universal Basic Income (UBI) to cushion the impact of such massive job
losses.
What
about the automation and job loss scenario in India? A June 2018 ILO report
titled Emerging Technologies and Future of Work in India says that the
“automation potential in India ranges between 52 and 62 per cent based on task
content of various occupations”.
Quoting
a leading Indian business daily, the ILO report says, “In the textile and
apparel sectors, for example, the spinning, auto-comer and auto-splicer
divisions have replaced the job of 20 workers with two workers. Leading textile
house Raymond has announced that it will replace 10,000 of its 33,000
work-force with robots in the next three years”.
The
report says robots are being deployed mainly in the automobile sector. Nearly,
550 robots were at work in the Ford plant, 400 at Hyundai, and another 4,200 in
the factories of Honda and Suzuki in 2015. Thanks to this, in certain
departments of production like weld shops and paint shops doing routine work,
four people can do the work earlier done by 32 people. In the financial sector,
while digital transactions are taking away the job of an ordinary teller,
AI-based software is making even a risk analyst redundant. The impact of
fintech on jobs in India in the next few years would be massive. Thanks to new
technologies, the 4-million IT workforce in India is expected to decline by
14%, according to the ILO report.
The
ILO report also captures the trend of growing gig economy and platform work in
India; “Of particular significance in India is growth in “on demand” digital
platforms targeted at service workers, many of whom fall under the purview of
informal employment. In the last five years, 270 new home-based on- demand
platforms have been set up in India. Babajobs, a job-posting platform, has 8.5
million registered users and over 500,000 customers; Urban Clap, a popular home
services aggregator, has over 650,000 registered service providers; and Uber
has 400,000 registered drivers.
In
such a scenario, Indian policymakers have to hurry with measures similar to
those proposed by WDR 2019. But till date the Ministry of Labour and Employment
has not uttered a word about the impending automation catastrophe or on
providing safeguards to the gig workers. Indian labour policy bears absolutely
no relation to the emerging Indian work realities. (IPA Service)
The post Coping With India’s Automation Assault appeared first on Newspack by India Press Agency.
