Pick any country from the list of the world’s fastest growing major economies: India, China, or South Africa – all these countries are growing on the back of their large and young populations, and the cheap labour these populations consequently provide. Countries such as India value this demographic asset so much that their whole vision of the future is based on their large and young population. The Indian Prime Minister, Narendra Modi famously declared that the 21st century is India’s century due to the three ‘D’s’ : Democracy, Demography and Demand.
At the same time, developing countries have been pushing for increased technological innovation and automation, hoping to give rise to a new breed of entrepreneurs: young, educated, ambitious, smart, hardworking and driven. However, we forget to understand the biggest fallacy in play here: Will not increase in automation cause a subsequent increase in unemployment?
How will millions of youth from all over the world get jobs if there are machines which can do the same work more efficiently? Lets explore….
Just take a look at China’s growth story: from an agricultural country to a global manufacturing powerhouse.The rise of China as an economic and trading superpower over the past decade has been striking in its scale and impact, domestically and internationally. Its economy has roughly doubled since 2009 and now challenges the US as the world’s largest economy. How did this happen? It’s simple – Due to its huge young population, which provided cheap labour for foreign companies. Unfortunately, according to many, the era when countries used to grow on the basis of their huge population is ending. Experts warn that increased automation will make human capital irrelevant. The technology and innovation hubs of the world will win in the long run. However I beg to differ.
I have thought about this question many times. And my answer to this question remains the same : Increase in automation does not increase unemployment. The only catch here is that the increase in employment comes in different areas of skill and activities than the jobs eliminated by the automation. Automation requires new machines be built, operated and maintained. Machines need programming and repair. The machines require attention from time to time. Operators need to get involved when complicated problems arise. These jobs require specialized skills to perform.
Jobs are getting generated as well as eliminated at the same time. So essentially, the nature of employment will shift from unskilled labour to skilled labour. Those who can and do learn how to do the more difficult jobs will earn more money and enjoy higher demand which means continued employment and competition between employers to hire them. Essentially, there will be an increase in competition. The world industries will shift from hardware dependent to software dependent. World economies will be based on their technological might and not their manufacturing capabilities. The next 2-3 decades will be a paradise for those who can adapt themselves with time. Automation is an enabler – like any tool, its goal is to make what was once hard easier.
However we also have to realise that humankind’s transition to increased automation will be bittersweet. Many jobs will be created, however at the same time livelihood of millions of families will be destroyed. Just think of the day when self-driving cars will be on the roads at a massive scale – how will the government tackle unemployment of millions of car drivers, and truck drivers? The need of the hour is therefore to debate the advantages and disadvantages of mankind’s increasing transition to automation. We will be able to make our lives convenient, but at what cost? Can that cost be reckoned with or not? We have too less time but have too many decisions to make. With the huge growth in innovation and technology every moment, it certainly is a race against time – and time is not on our side.
Remember that the fittest one survives the race.
Note:- All the opinions stated in the above article are the author’s own.