There is an old and wise saying, “If you do not know where you are going, you will end up somewhere else.” “Achhe Din” will come into the lives of Indians when they have dignified livelihoods with decent incomes. The number one priority of the Indian government must be much faster generation of more, and better jobs. The Indian economy’s growth, in terms of GDP, is the highest in the world at present. However, it is one of the slowest in the world in creating jobs.
The employment elasticity of the Indian economy (the rate of jobs growth in relation to GDP growth) has been less than the global average from 2000 to 2010.
The average employment elasticity of the global economy was 0.3 in this period, while India’s was only 0.2. Even more worrying is the declining trend of employment elasticity of India’s growth. It declined from 0.44 in the five years 1999-00 to 2004-05, to only 0.01 in 2004-05 to 2009-10—close to jobless growth. The government’s sights must be fixed on the generation of more jobs as the principal goal, rather than the growth of GDP. Otherwise the Indian economy will produce more GDP and not jobs.
While the Indian government is pressing on the accelerator to induce more job growth, with its Make in India, Skill India, and Start-Up India campaigns, technological advances may be throwing a spanner in the works. Rapid advances in digital technologies and automation are displacing people from work in all sectors of the economy—in manufacturing, in services, and even in knowledge industries. Studies in the USA and Australia estimate that by 2035, 35% of all work in their economies will be automated and this can impact over 50% of present employment. The International Labor Organization (ILO) says, in its Future of Work Report, “The unfurling technological revolution…is so far-reaching in its labor-replacing potential that it is inherently different from what has been experienced in the past.”
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
The World Bank estimates that automation is a threat to 69% of jobs in India. This must be of great concern to India’s policy-makers who fear that there can be socio-political turmoil if there are not enough jobs for India’s burgeoning youthful population. India’s policy-makers should not lose heart. Because a doomsday projection of a world in which everything is done by machines and computers is unrealistic. To complete the picture, one must also imagine what human beings will be doing in such a world. And consider how they will earn to pay for all the products and services produced for them by machines. A completely robotised world, in which machines will make machines too, will require very few people. Perhaps the only people with incomes will be the capitalists who own the machines, their financial managers, and their lawyers to sort out property disputes amongst them! In this world power will be entirely with owners of capital and machines and it is feared they will keep using their power to throw human beings (who can be troublesome) out of the production system, replacing them with more obedient machines.
Technology is only one force shaping the world. Human aspirations and, propelled by human aspirations, social and political forces shape the world too. These forces will create institutions and arrangements to protect human interests, including opportunities for work and sources of income for people, long before machines (and their owners) can eliminate them. No doubt the shape of production systems will change with technology. But people will not be eliminated. They will perform new tasks in enterprises which will take new forms. Technology will be used to shape these new enterprises. New models of enterprises will be founded on new concepts of production and management. New technologies are disrupting old concepts of manufacturing and old models of enterprises. They can enable new forms of enterprises whose scale can be increased by the aggregation of many dispersed activities rather than the sizes of their own factories and organizations.
Arun Maira, Chairman, HelpAge International and Former Member, Planning Commission writes this piece for FICCI publication “Economy of Jobs”. Post continues on Page 2.