Historically, the industrial revolutions have occurred whenever there have been changes in the energy and the communication technologies. Each of the industrial revolutions have impacted the society and the economy in its own way by creating jobs, occupations and changes in lifestyles.
Today, we are at the brink of a Fourth Industrial Revolution which encompasses a wide spectrum of technological advances across the value-chain such as artificial intelligence, machine learning, 3D printing, robotics, genetics, Internet of Things, nanotech, bio engineering, etc. – all working in unison to solve diverse global and local challenges. All this is due to machines having intelligence added to them, with the ability to self-learn and react to an extraordinary degree. The differentiating factor is the large scale automation of jobs, use of intelligent machines and robots. For a labour surplus young country like India which is in need of massive number of jobs, this is the perfect social disaster.
Industry 4.0, which started off in Germany, is being adopted by countries around the world. Developed nations like USA, France and Japan have already taken the first step in this direction by launching nation-wide programs. FICCI-Roland Berger study on ‘Skill Development for Industry 4.0’ reveals that the adoption of Industry 4.0 by developed nations present significant threat to India and other emerging nations as it will result in reverse job migration to the developed nations further lowering jobs in low cost destinations. Industry 4.0 will bring higher level of automation, interconnectivity and efficiencies in the manufacturing process. Smart machines will coordinate manufacturing processes by themselves, smart service robots will collaborate with workers on assembly lines and smart transport systems will transfer goods from one place to another. Smart devices like sensors, tablets, wearables, etc., will be used to gather and analyze real-time information and machine operations. Artificial intelligence will enable collaboration between humans to machines and machine to machine.
This article is a part of FICCI publication “Economy of Jobs” that was released during our 89th AGM in December 2016. It presents essays from India’s leading business leaders and eminent thought leaders who share views and suggestions on job creation. The articles cover varied issues: demographics, education, skill development, entrepreneurship, impact of technology, labour laws, and as well as specific issues across sectors.
More articles from this series can be viewed here at: Economy of Jobs
With 65% population being in the working age group, India is grappling with the twin challenge of skilling millions of youth and employment generation. As per projections, over 100 million incremental people will be required in India alone, across 24 key sectors by the year 2022 to meet our needs unless automation reduces the need. Yet, only 20% of the Indian population has undergone formal skill training. We have to accommodate the annual 18 million Indian youth entering the workforce for the first time during the next decade and half. Against this need, at present only 5.5 million additional organized sector jobs a year are being created which is certainly not enough. In India, the services sector is the powerhouse of job creation but services industry workforce is expected to shrink in the future due to automation.
According to FICCI-EY analysis, due to the technological disruption, the job pyramid categorized into skill based, rule based and analysis based will be differently impacted. The skill based jobs are impacted by industrial automation and robotics. The routine manual jobs in manufacturing and services sector would be lost but bespoke jobs like installation mechanic, repairman, etc. will remain as there are several manual roles that still remain exceptionally tricky for robots. The role of an office assistant has undergone a big shift in the last 20 years – from manual to electronic typewriters to computers to tablets – they have had to learn new skills to operate new technologies. The process based jobs will be transformed by cloud computing, automation and sensors to complete the task faster and in a more efficient manner with least errors, possibly leading to elimination of many jobs. The impact is visible with slowdown in hiring by large Indian IT companies. However, new jobs are also being created with need for new skills to adapt to the change. The analysis based jobs would be affected by artificial intelligence and augmented reality, however, these jobs are less susceptible to be replaced right now due to cognitive or human judgment element attached to these jobs.
T V Mohandas Pai Chairman, FICCI Skill Development Committee and Chairman, Manipal Global Education Services writes this piece for FICCI publication “Economy of Jobs”. Post continues on Page 2.