Is the automation scare real? It was and has been. Since the followers of the mythical figure Ned Ludd crashed machines in 1811, automation was a nightmare for the workers, but the economists had always predicted the replacement of the old jobs by the new.
The new version of automation in the 21st century may become a harder nut to crack, says Radhicka Kapoor of the Indian Council for Research on International Economic Relations. According to her working paper, during the automation spree in India, the share of total emoluments paid to labour fell from 28.6 per cent to 17.4 per cent of gross value added (GVA) between 2000-01 and 2011-12, while the share of wages to workers in GVA declined from 22.2 per cent to 14.3 per cent. It has increased the inequality too. The share of skilled labour in the wage pie rose from 26.1 per cent to 35.8 per cent, while that of unskilled labour fell from 57.6 per cent to 48.8 per cent of total wage bill. In the case of the US economy, in 1971, a worker at the 90th percentile of the wage distribution earned 266 per cent more than a worker at the 10th percentile. By 1995, this number had risen to 366 per cent.
Indian IT sector, which employs more than 2.5 million people directly and is harnessing the much-needed foreign exchange also, is facing the next generation automation threat of robotics. It may lose 6.4 lakh “low-skilled” jobs to automation by 2021, says HfS Research. For the first time since 2009, campus recruitment for engineering graduates may decline by 20 per cent, fears NASSCOM. Many suspect deindustrialisation due to the application of artificial intelligence. In this scenario, the “creation of millions of jobs” under the Make in India initiative may remain a pipe dream.
Both short-term and long-term methods are to be sought out. Asian giants like India and China can even compete with the developed nations in the creation of high-end robotics though it may not bring as many jobs. The real challenge is to skill the skilled in the state of the art. This can be done in a campaign mode which may be fascinating to the captains of the present regime. The Indian industry must think about this task seriously since only with a highly skilled labour force can it sustain in the competitive world of production. The long-term route may be an uphill task. In future, new automation will end the advantage of Asia’s cheap labour. High-quality education from the bottom level is going to be the cornerstone of the new ‘industrial revolution: number 4’.
The International Commission on Financing Global Education Opportunity is envisaging a ‘learning crisis’ in the developing countries. In 2030, high-income countries will be far ahead with 70 per cent school-aged children with expected learning outcome while the low-income countries will be having a mere 8 per cent.
India falling under the latter category will need a giant leap in education quality, which is an essential pre-requisite to catch up with the developed world in production (which Asian giants are enjoying to an extent now). All the three tiers of governance have their own roles to play, but Government of India should take the call. firstname.lastname@example.org