What will the new jobs look like?
Despite the challenges of automation and a shrinking services sector, there is untapped potential for jobs in areas like fintech and healthcare. India should create new business models and employment opportunities by leveraging its unique economy, rather than relying on manufacturing as a temporary solution.
This article was first published in The Mint. You can read the original at this link.
Last week, I was speaking at a conference on the future of work and I got into a bit of an argument with the rest of the panel as to whether the future will in fact be bleak as they were making it seem. I know that the data doesn’t look good. As much as 65% of the Indian population is of a working age and over the next 15 years, an additional 18 million Indians will enter the workforce every year. But the organized sector will only be able to generate 5.5 million additional jobs a year. The services sector that India relies on to deliver new jobs is witnessing unprecedented contraction due to an adverse global political climate coupled with the rapidly increasing impact of automation.
For the first time in history, technological disruption is likely to impact all the different job types—skill-based, rule-based and analytical—equally and at the same time. Robotics and industrial automation will have an impact on skilled labour in the manufacturing sector. Routine rule-based jobs are likely to be replaced by Internet-of-Things-based sensor technologies. And analytical jobs, so far believed to be the exclusive preserve of human intellect, are for the first time at real risk of being lost to the rapid improvement in artificial intelligence.
By this evidence, the future does seem bleak.
I argued that we’ve been here before. When the industrial revolution destroyed the handicraft sector, everyone claimed that it was the end of the world and that machines would replace humans. But somehow, we survived and the jobs that were lost were replaced with different ones. What makes everyone so sure that this won’t happen again? After all, despite all the automation and intelligent technology we use everyday to make our lives easier, we are busier than we have ever been. It’s as if the only purpose that labour-saving technology seems to serve is to find new ways to fit more work into our day.
But I was told that I was being naive and a Luddite. Never before in history have we witnessed such rapid technological change. During the Industrial Revolution, society had time to adapt. We will have no such luck. The only option, I was told, was to actively incentivize the growth of the local jobs—ideally in the manufacturing sector so that we can, at the same time, boost the economy and reduce our dependence on international trade.
This solution makes little sense to me. If manufacturing jobs elsewhere in the world are being lost to robots, why won’t the new manufacturing jobs created in India be similarly automated? If this is the silver bullet that everyone is hanging their hopes, it is a temporary solution at best.
We need to learn from the mistakes of the West. Rather than create manufacturing jobs just because that was the sector that powered the growth of the US and helped China grow into an economic powerhouse, India needs to find a solution to its jobs problem that leverages the opportunities that its own unique economy offers.
There are still a number of pockets of untapped potential in the Indian economy.
Significant portions of the population live outside urban areas and remain underserved by the financial sector. The Reserve Bank of India’s Committee on Household Finance has recommended that we encourage the growth of that sector—particularly fintech products and services that target sections of society that are currently unbanked and that offer a significant opportunity for financial inclusion. Not only will this help bring those sections of society into the financial system, it will, in addition, have the happy side effect of creating new business models and generating new employment opportunities.
Similar opportunities exist in the healthcare sector. If we can encourage the development of new technologies that are more ideally suited for Indian circumstances, we will be able to create better healthcare outcomes for those sections of our society that are currently marginalized by the system.
Core to all this is developing an integrated system of electronic health records that can be used by all the stakeholders in the healthcare ecosystem so that we can avoid ending up with the large proprietary medical databases that we see in the West that, like a giant medical Tower of Babel, are incapable of talking to each other. If we can do that, investments into the sector will create thriving new industries that will allow the benefits of healthcare to reach deeper into the country than would otherwise have been possible. And in the process generate new jobs and scalable businesses.
So yes, I am not as pessimistic about the future as my other panellists were. Because I can, in fact, see a path out of the minefield in front of us.
It’s just not the one they want us to follow.
