Economic anxiety runs high among India’s aspirational youth as the government is yet to optimise on the ‘demographic dividends’ that were expected to catapult the fastest-growing economy into the next league. Two years from now, it is this vote bank that will become the benchmark for Modi Sarkar’s delivery against its promise of creating one crore jobs a year.
While the real economy has slowed down to six per cent temporarily, the GDP does not reflect the woes of under-employment, with job growth at just one per cent annually. However, no economy integrated with the global marketplace can be insulated from the forces of de-globalisation, de-growth, or the new elephant in the room: The Fourth Industrial Revolution (FIR).
The velocity of this revolution is growing ‘exponentially rather than at a linear pace’, as technology replaces labour, creating an ‘on-demand’ digital economy in travel, e-commerce, services and food. Consumers now pay, purchase and consume goods and services in new ways, ceding to newer businesses and business models. Scientific advancements have far outpaced the level at which global economies will adjust to and absorb these innovations, transforming the way we will live, work and earn. It will also herald changes in production, managements and governance. Robotics, Artificial Intelligence, Virtual and Augmented Reality are already upon us besides self-driven cars and online shopping for products, services and entertainment, and on-command virtual assistants such as Siri.
While the FIR will raise productivity and improve the quality of life, displacing labour could increase social unrest temporarily, as automation substitutes low-skill, low-pay jobs. Empirically though, the history of tech revolutions points to each new wave having delivered newer employment opportunities than earlier. So, the fears of displacement might be misplaced, as, for example, using computers to fly did not displace pilots, but only made travel safer. Trainee engineers are now put through ‘design hothouses and innovation sandboxes’; mid-career professionals are learning upskills and cross-skills through e-learning; and government targets to re-train 40 crore professionals.
The largest beneficiaries of the FIR will be ‘providers of intellectual capital’, those innovators who will rake in its windfall gains, as did Google or Facebook that had a first-mover advantage. Which leads me to a sub-question and a debate within the US: when Internet businesses that cater to public utilities grow into oligopolies and become ‘digital colonisers’, should they be nationalised?
Dollar dreams of workers engaged in IT outsourcing services were built on wage arbitrage in the heady years of globalisation. Today, the same workers face an uncertain future in the services sector. Though GST is expected to increase manufacturing’s share of GDP from 17 per cent to 25 per cent by 2025, it is still futuristic and inadequate to employ millions with rising literacy levels who aspire to move up the value-chain from agriculture to manufacturing jobs. While government initiatives such as Digital India, Smart Cities and a `10,000-crore Fund of Funds will unleash job potential and generate micro-entrepreneurship, the success rate of startups is subject to high mortality rates. So, labour-intensive industries will always remain the employment generators.
Though we have come a long way from the global shock of 2008, the glass remains half-empty if we gauge progress by Mark Zuckerberg’s economic metric of achieving a ‘universal basic income’. The FIR could compound existing reasons of joblessness, if institutions are not proactive enough to preempt the risks of automation displacing labour, as labour-protection is still much needed to lift millions out of poverty.gdalmia73@gmail.com