“Technological change is largely inevitable and impossible to stop. Short of closing borders and halting communications, an economy cannot turn its back on progress.” – Ben Horowitz
Advances in technology have historically displaced certain types of work. For example 40% of the population in developed countries was engaged in agriculture 100 years ago. That number is now down to single digits, while at the same time agriculture production volumes has increased manifold. Even though way back in 1930, John Maynard Keynes cautioned against “technological unemployment”- where discovery of means of economizing the use of labor outpacing new uses for labor; in the past, technological advances have always led to a net increase in jobs. Industrialization did not end up eliminating the need for human workers- the bank teller’s job was redefined with the advent of ATMs. Agreed that labor pools had to continuously adjust, but on the whole, it created employment opportunities sufficient to employ 20th century’s burgeoning population.
The Fourth Industrial Revolution-
The first industrial revolution was spurred by use of steam powered machinery, the second replaced steam and water with electricity, and the third was the information technology revolution. Today however, we are at a tipping point- the beginning of a fourth Industrial revolution as some may call, which involves the confluence, at speed, of previously disparate technologies such as artificial intelligence, machine learning, robotics, genetics, biotechnology, and nanotech- all working in unison to solve diverse challenges facing us. Smart systems—homes, factories, farms, grids or entire cities—will help tackle problems ranging from supply chain management to climate change.
On their own, each technology has the power to change business activity the way we know it. In convergence, they have the potential to change the world- economy, society, businesses, and the workforce. Taken together, these technologies can seriously boost efficiency while eliminating many existing jobs, and at the same time, creating new categories of jobs. The skill sets required in both old and new occupations will change in most industries and transform how and where people work. At the same time, it is not only technology that will impact work. Other socioeconomic drivers such as change in work environments (more flexibility, on-demand work, and remote work), a growing middle class, and urbanization in emerging markets, demographic patterns and globalization will have their say as well.
While technological innovation invariably leads to greater productivity and prosperity, the speed of change in the case of the Fourth Industrial revolution, will put extraordinary stress on an evolving labor pool. Without putting in an action plan today to manage the labor shifts and build a future-ready workforce, governments may have to deal with ever-growing unemployment and income inequality, and businesses with lower demand due to reducing consumer base.
Further, these efforts are required not only to handle risks of the pervasive technology and socioeconomic shifts underway but also to make the most of the opportunities presented by the Fourth Industrial Revolution. The talent to manage, shape and lead the changes underway will be in short supply unless we take action today to develop it.
Key Questions for India
- How will the Fourth Industrial Revolution- technology shifts in tandem with socioeconomic trends play out?
- Will automation replace routine, repetitive tasks and allow people to focus on more meaningful, creative work? Will some jobs vanish eg contact centers?
- Will it increase global unemployment? If yes, will it cause business demand to shrink because of lower disposable incomes?
- Are we looking at a dystopian future with hyper income inequality?
- How will it impact different sectors of the Indian economy – agriculture, services, manufacturing, SMBs and resultant impact on existing jobs and new job creation. Given relatively low levels of technology adoption, will some sectors have a longer gestation period.
- How does it impact the Indian citizen – Will it leave to significant improvement in productivity and quality of life?
- With demographic shifts and an ageing population across key markets, can India be the skill partner for the world. What would be key skills in demand and what are the reskilling imperatives?
- How will the skill set requirements for technology jobs change? How will supply pools adapt to changing demand?
The future of jobs is on NASSCOM Research’s agenda for the year. If you would like to share your thoughts on the topic, feel free to reach out to me